The Alan Katz Health Care Reform Blog

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Posts Tagged ‘commerce clause’

Federal Judge Declares PPACA Unconstitutional

Posted by Alan on January 31, 2011

Federal District Court Judge Roger Vinson declared the Patient Protection and Affordable Care Act unconstitutional. The ruling in a suit brought by governors and attorneys general from 26 states is the most sweeping legal decision against President Barack Obama’s health care reform package. 

Specifically, Judge Vinson decision focused on the legislation’s requirement that all Americans obtain health care coverage (the individual mandate). He found the individual mandate violated the Commerce Clause (while in the same decision dismissing plaintiff’s claim the PPACA was unconstitutional because of the changes it makes to the Medicaid program

All of this was expected. What was a bit of suprise is that Judge Vinson went further stating:  “Because the individual mandate is unconstitutional and not severable, the entire act must be declared void.”  Compare this to the December decision by U.S. District Judge Henry Hudson who ruled in a suit brought by the state of Virginia that the individual mandate was unconstitutional. Judge Hudson, however, determined that those provisions of the health care reform law that did not depend on the individual mandate “are legal and can proceed.”

Reuters describes Judge Vinson as struggling with the decision to invalidate the entire law as he recognized the decision “will have indeterminable implications” – which is legalese for “this shakes things up a bit, doesn’t it?” In the end, however, as reported by the New York Times, he determined that the individual mandate “exceeds the regulatory powers granted to Congress under the Commerce Clause of the Constitution. Judge Vinson wrote that the provision could not be rescued by an associated clause in Article I that gives Congress broad authority to make laws ‘necessary and proper’ to carrying out its designated responsibilities.”

Significantly, Judge Vinson decided not to stop implementation of the PPACA from moving forward pending appeals. Nonetheless, one of the the lawyers for the states, David Rivkin, Jr., was quoted as declaring that “With regard to all parties, the statue is dead. The statute is as if it never was.”

Well, not really. If Judge Vinson had suspended or enjoined the law Mr. Rivkin would have something more than enthusiasm to stand upon. But by allowing work on implementing reform to move forward, this decision becomes part of a mix of several cases. With District Judges ruling to strike down part (and now all) of the Patient Protection and Affordable Care Act and others upholding the health care reform law the next step is for Appellate Courts to hear appeals of these decisions.

Eventually the question of whether the PPACA is constitutional or not will be determined by the U.S. Supreme Court. Which will be fascinating to watch. While Justices prize their independence, the fact is that they all have a point of view based on a mix of their understanding of the law and constitution, their personal experience, and their political ideologies – not in equal measure. While there may be surprises, what this could mean is that the fate of President Obama’s signature legislative accomplishment is in the hands of Justice Anthony Kennedy. The reason is that four of the Justices are expected to be skeptical of expanding the Commerce Clause while four are likely to be more comfortable with the idea. Justice Kennedy is viewed as a moderate and the swing vote on the Court as currently comprised.

In the meantime implementation of the PPACA by regulators, carriers and others will continue apace – as will legislative attempts in Congress and state legislatures to modify (or repeal) the law. All of which means that Judge Vinson’s declaration that the PPACA is unconstitutional is an interesting chapter in the history of reforming health care and health care coverage in America, but it’s only a chapter in a very long book.

Here’s a link to the text of Judge Vinson’s ruling striking down the health care reform law as unconstitutional.

For those who prefer to listen to their legal analysis, NPR offers a clear presentation of Judge Vinson’s decision.


Posted in Barack Obama, Health Care Reform, Healthcare Reform, Patient Protection and Affordable Care Act, PPACA | Tagged: , , | 7 Comments »

Federal District Court Declares PPACA’s Individual Mandate Unconstitutional

Posted by Alan on December 13, 2010

A federal district judge in Virginia found the Patient Protection and Affordable Care Act unconstitutional today.

The ruling by Judge Henry Hudson makes the count at the district court level 2-to-1 in favor of the new health care reform law’s constitutionality. Another Judge in Virginia and one in Michigan ruled in favor of the legislation’s requirement that individuals obtain health coverage beginning in 2014. There are nearly two dozen legal challenges to the PPACA and no doubt others will go against the law as well, while others side with the Obama Administration.

In making his decision, Judge Hudson concurred with the arguments put forward by Virginia Attorney General Kenneth Cuccinelli. The core of his this argument is that while the federal government has the power and authority to regulate interstate commerce, whether or not to buy health insurance coverage is a local decision and beyond the reach of the federal government. The Washington Post offers a quote from the 42-page ruling that makes this position clear: “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to enter the stream of commerce by purchasing a commodity in the private market.”

In claiming the individual mandate was unconstitutional, Judge Hudson specifically stated that “portions of the law that do not rest on the requirement that individuals obtain insurance are legal and can proceed,” according to the Washington Post. Officials in the Obama Administration concede that, if the Supreme Court were to find the individual mandate requirement the goal of President Barack Obama’s health care reform law would be crippled., reports that these officials concede “the lack of a mandate would cut the number of uninsured people who would get coverage in half and threaten the ban on denying coverage [to] people with pre-existing conditions.” Medicaid expansion, the creation of state-run insurance exchanges and the medical loss ratio requirements would not be impacted, however.

The ruling by Judge Hudson was not unexpected as he was very skeptical of the law during a hearing in October. Nor did Judge Hudson stay implementation of the law, which means implementation of even those PPACA provisions tied to the individual mandate may continue until a decision on the laws constitutionality is made by the Supreme Court. 

With various judges deciding differently the constitutionality of the law will need to be determined by the Supreme Court. The new Virginia decision, the others in which a federal district court judge has ruled, and a decision yet to come on a suit filed by 20 states against the PPACA in a Florida court, will need to work their way through the judicial system before the issue reaches the Supreme Court. Attorney General Cuccinelli has requested that his suit bypass the Fourth Court of Appeals (which would normally hear an appeal from a Virginia federal court) and go directly to the Supreme Court. To accept this request, the Washington Post notes that the Supreme Court would have to decide that the case “held extreme public importance” and immediate intervention was required.

Whether Attorney General Cuccinelli’s request is accepted or not, the Supreme Court is expected to rule on the constitutionality of the Patient Protection and Affordable Care Act prior to 2014.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Patient Protection and Affordable Care Act, PPACA | Tagged: , , , , | 12 Comments »

Federal Judge Finds Individual Mandate Constitutional

Posted by Alan on October 7, 2010

Challenges to President Barack Obama’s health care reform legislation aren’t coming just from Republicans in Congress. Several law suits are challenging the constitutionality of the Patient Protection and Affordable Care Act, too. While various theories are being used to attack the legislation, most focus on the the individual mandate in the PPACA – a provision that requires all Americans to obtain health care coverage starting in 2014.

While the biggest case, brought by 20 states, is being heard in Florida, a Michigan Federal Court judge is the first to actually issue a decision on the merits of the new health care reform law. Judge George Steeh ruled against the plaintiffs, finding that the individual mandate did not exceed the federal government’s authority under the Constitution’s commerce clause. The plaintiffs in the case, who also claimed, among other complaints, that the penalty to be imposed under the law for failing to obtain health care coverage was an illegal tax, have vowed to appeal Judge Steeh’s ruling. Specifically, Judge Steeh denied the plaintiffs request for a preliminary injunction that would have stopped the reforms.

According to the Los Angeles Times, Judge Steeh cited the impact failing to be insured causes on the health care system as a whole. “Far from “inactivity,” by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants….” He also noted that, in the context of a health care reform bill that requires carriers to accept all applicants regardless of their medical condition, an mandate on individuals to be insured would be undermine the nation’s health care system.

This argument, that forcing carriers to guarantee issue coverage without a balancing requirement for consumers to obtain coverage would lead to adverse selection leading to ever higher premiums, is frequently made by policy makers and others (including me) justifying an individual mandate. What’s different is that the judge defines the failure to obtain medical coverage as an economic action that, while locally made, impacts interstate commerce. “[P]laintiffs in this case are participants in the health care services market. They are not outside the market. While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.”

Judge Steeh’s decision is not binding on other courts, although it will no doubt be cited as precedent by the government in defending against the other law suits filed against the PPACA. Decisions in these cases will be coming relatively soon: a suit brought by the Virginia Attorney General is scheduled for a hearing on October 18th while a hearing on the suit in Florida is scheduled for December 16th.

Ultimately, the Supreme Court will no doubt determine the constitutionality of the Patient Protection and Affordable Care Act. Judge Steeh’s decision is simply the first of many court rulings to come.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Patient Protection and Affordable Care Act, PPACA | Tagged: , | 46 Comments »