in addition to the earlier ruling in Virginia that found the individidual mandate unconstitutional. The judge in this case goes further, however, declaring the entire law void.
Justice Roger Vinson of the U.S. District Court in Pensacola ruled today that the primary mechanism used by the health reform legislation to achieve universal insurance coverage—the individual mandate—is illegal. If his ruling stands it would void the 2,700 page, $938 billion health reform bill passed last year.
“Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void. This has been a difficult decision to reach, and I am aware that it will have indeterminable implications,” Vinson writes.
With this ruling, and a similar one in December by Judge Henry Hudson in Virginia, it’s likely that the U.S. Supreme Court will be the final arbiter of whether ObamaCare stands.
Two other lawsuits—one in Michigan and one in Virginia—were thrown out by other federal district judges last year who ruled the constitutional challenge lacked merit.
Most analysts were expecting a ruling in favor of the 26 states hoping to overturn the bill. Vinson, in an earlier ruling, suggested that the federal fine for not buying insurance is more of a penalty than a tax. If it’s a penalty, the legislation relies on a broad interpretation of federal regulatory powers. If it’s a tax, as the Department of Justice’s lawyers argued, it’s much more difficult to make a constitutional objection.
In today’s ruling Vinson considered two arguments made by Florida Attorney General Bill McCollum, the lead plaintiff on the lawsuit. The first was the legislation forces states to expand Medicaid in a way that’s unaffordable. Vinson quickly dispatches that legal theory, pointing out that Medicaid is and always has been a voluntary program.
The second argument revolves around the individual mandate. The health reform legislation makes it illegal for insurers to discriminate against patients regardless of their health. With that change there’s a risk that only sick people would buy insurance and healthy people would wait or be priced out of the market. To address that problem, the bill forces everyone who does not have insurance to buy it. The combination of “guaranteed issue” and the “individual mandate” is the beating heart of the health bill.
While the new rules banning medical underwriting are popular, the individual mandate has bred resentment. The bill’s authors never anticipated the mandate would become a ripe target for legal challenges.
The argument that’s had the most traction is based on the limitations of the Commerce Clause of the Constitution. The Commerce Clause explicitly allows the federal government regulate interstate commerce. But it also has been used to justify federal laws that affect other kinds of economic activity. The question raised by the lawsuit against the health reform bill is whether refusing to buy insurance constitutes interstate commerce. In his ruling Vinson says that in the past the Commerce Clause has been used to regulate activities like growing marijuana or navigating a waterway, but not used to force someone to do something they weren’t already doing. “It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause,” he writes.
Vinson rejects the administration’s argument that the health care market is unique since nobody can truly opt out—and that not buying insurance is in itself an economic activity since the cost of care then falls on others. Vinson mocks this argument, writing: “Everyone must participate in the food market … under this logic, Congress could [mandate] that every adult purchase and consume wheat bread daily.” If they didn’t buy wheat bread they might have a bad diet which would put a strain on the health care system, he writes.
Later he offers another analogy: “Congress could require that everyone above a certain income threshold buy a General Motors automobile—now partially government-owned—because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business.” Vinson concludes: “The individual mandate exceeds Congress’ commerce power, as it is understood, defined, and applied in the existing Supreme Court case law.”
The next step is likely for the case to be heard in front of the Supreme Court. That would likely put the onus for keeping or voiding the bill on Justice Anthony Kennedy, the current court’s swing vote. It’s unlikely that the case would move quickly enough that it would be heard this year. Yet since the bill’s main elements—the mandate, the new insurance regulations, and the exchanges—don’t kick in until 2014, there’s plenty of time for a high court review to seriously impact the implementation of the new laws.