Saturday, August 13, 2011

Appeals Court Rules Health Insurance Mandate Unconstitutional

A three-judge panel of the Eleventh Circuit ruled on Friday in State of Florida v. HHS that the individual health insurance mandate in the Affordable Care Act exceeded Congress's Commerce Clause authority.  The panel also ruled unanimously that the mandate exceeded Congress's taxing authority, but (contrary to the lower court) that it was severable from the rest of the ACA.  (This means that the mandate's unconstitutonality doesn't render the entire ACA unconstitutional.)  The panel also agreed that the ACA's expansion of Medicaid--an expansion that's conditioned upon the receipt of federal funds under the Act--did not unduly coerce the states and therefore did not violate Congress's spending power. 

The ruling comes within weeks of a Sixth Circuit ruling in Thomas More Law Center v. Obama upholding the individual mandate under Congress's Commerce Clause authority and a Third Circuit ruling in New Jersey Physicians, Inc. v. President of the United States dismissing a challenge to the ACA for lack of standing.  We're still waiting for a ruling from the Fourth Circuit in Virginia v. Seblius and Liberty University v. Geithner.

Chief Judge Dubina wrote the massive opinion, joined by Judge Hull; Judge Marcus wrote a lengthy dissent.  Despite the size of the opinions, however, there's not much new: The arguments and analysis turned on familiar themes related to a propounded activity/non-activity distinction under the Commerce Clause, the time of regulation (before, not when, the regulated individual actually seeks medical services), limiting principles for congressional authority, the scope of the Necessary and Proper Clause, and the proper role of the courts in reviewing congressional action.

There are a couple things to note:

  • All the judges seemed to agree that the formal activity/non-activity distinction did not alone answer the question.  Thus Chief Judge Dubina's decision looked to this distinction, but also looked to the "unprecedented" nature of the mandate, the broad scope of the regulation and the lack of limiting principles offered by the government, congressional findings, areas of traditional state concern, and the larger regulatory scheme in concluding that the mandate exceeds Commerce Clause authority.  Each of these, he said--and not the activity/non-activity distinction alone--matters in the analysis.  (He also wrote that each of these cut against the government's authority.)
  • Chief Judge Dubina's decision went to great lengths to describe congressional findings supporting a link between self-insuring and the interstate economy.  He wrote that while Congress, indeed, found a link, the ACA itself undermined that link.  In particular, he wrote that the ACA itself provides for coverage for so many uninsured (through the expansion of Medicaid, among other things) and provides exceptions for others that the mandate itself simply didn't do enough to achieve Congress's goal of reducing and eliminating cost-shifting by the uninsured.  Those left who are required to purchase insurance, he wrote, are healthy individuals who aren't currently consuming medical services. 
  • Chief Judge Dubina wrote about judicial deference throughout but applied it most obviously in concluding that the individual mandate is severable from the rest of the ACA, and therefore the rest of the Act could stand.  (Recall that Judge Vinson previously ruled that the mandate was not severable, at least in part because the government made the argument that it was essential to the overall regulatory scheme under the ACA.  In other words, Judge Vinson ruled that the government's effort to shoehorn the mandate into the Commerce Clause by way of Gonzales v. Raich backfired.  Chief Judge Dubina rejected this approach.)

Now with a clear split between the Eleventh Circuit and the Sixth Circuit--unless an en banc Eleventh Circuit overturns Chief Judge Dubina--these cases are inexorably headed for the Supreme Court (if there were ever any doubt that they'd end up there).  (Indeed, the plaintiffs in Thomas More already filed for cert.)  But we're still waiting for the Fourth Circuit to weigh in.

SDS

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