VOL. 17 ISSUE NO. 33   |   AUGUST 17 - 23, 2011


Stage set for Obamacare to head to U.S. Supreme Court

11th Circuit Court of Appeals finds individual mandate to purchase insurance unconstitutional in split opinion

ATLANTA – On Friday, Aug. 12, an 11th Circuit Court of Appeals panel issued a split ruling in a challenge filed by 26 states against the Patient Protection and Affordable Care Act, otherwise known as Obamacare, finding the individual mandate unconstitutional.

In their 207-page opinion, Chief Judge Joel F. Dubina, a President George H.W. Bush appointee, joined by Judge Frank M. Hull, a President Bill Clinton appointee, while finding the Act’s Medicaid expansion to be constitutional, found the individual mandate exceeded Congress’ enumerated commerce power and declared it unconstitutional.

The majority noted the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, as was argued by the government, and could not be sustained as an exercise of Congress’ power under the Taxing and Spending Clause.

They stated, “The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this meaning.”

The court noted the economic mandate represented a “wholly novel and potentially unbounded assertion of congressional authority” by compelling “Americans to purchase an expensive health insurance product they have elected not to buy, and make them repurchase that insurance product every month for their entire lives.”

The majority concluded it had not found any generally applicable, judicially enforceable limiting principle permitting them to uphold the mandate without obliterating the boundaries of enumerated congressional powers, citing “uniqueness” is not a constitutional principle.

And, in determining whether a statutory provision is “integral” or “essential” to other provisions for Commerce Clause analytical purposes, the court said it was a question distinct from severability, citing the “touchstone of severability analysis is legislative intent, not arguments made during litigation.”

Concluding the individual mandate was severable from “the remainder of the Act’s myriad reforms,” the court stated the mandate “finds no refuge in the aggregation of doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce.”

Declaring the Act’s other provisions legally operative after the mandate’s “excision,” the court found “the high burden needed under Supreme Court precedent to rebut the presumption of severability had not been met.”

Judge Stanley Marcus, also a Clinton appointee, wrote a 97-page dissenting opinion stating, “[T]he individual mandate was designed and intended to regulate quintessentially economic conduct in order to ameliorate two large, national problems: first, the substantial cost shifting that occurs when uninsured individuals consume health care services – as virtually all of them will, and many doe each year – for which they cannot pay; and, second, the unavailability of health insurance for those who need it most – those with pre-existing conditions and lengthy medical histories.”

Marcus said the majority ignored the broad power of Congress and many years of Commerce Clause doctrine developed by the Supreme Court and stated, “It has ignored the undeniable fact that Congress’ commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy.”

Marcus went so far as to state, “Creating an artificial doctrinal distinction between activity and inactivity is thus novel and unprecedented, resembling the categorical limits on Congress’ commerce power the Supreme Court swept away long ago.”

He said, “The plaintiffs and the majority would have Congress wait at the water’s edge until the uninsured literally enter the emergency room. In other words, they say, Congress may not legislate prophylactically, but instead must wait until the cost-shifting problem has boiled over, causing huge increases in costs for those who have health care insurance … and for those who provide health care services.”

This case is now expected to move forward to the Supreme Court for a final word on whether Congress has the authority to regulate commerce by mandating individuals purchase any array of goods and services they may neither want nor need.

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