Reform Law's Insurance Mandate Unconstitutional, Court Says

A Virginia district court ruling that a central provision in the new health care reform law is unconstitutional has added steam to political opposition to the law and hastened a showdown over the provision in the U.S. Supreme Court.

Eastern Virginia District Court Judge Henry Hudson ruled last month that the provision within the law requiring individuals to purchase health insurance—known as the Minimum Essential Coverage provision—is unconstitutional. Two other district courts, in Western Virginia and in Michigan, have upheld the provision.

The ruling was hailed by Republicans who vowed to repeal the Patient Protection and Affordable Care Act (PPACA). Then-House Minority Whip Eric Cantor (R-Va.) said in a statement that the ruling is “a clear affirmation that President Obama's health care law is unconstitutional.”

The case was brought against Secretary of Health and Human Services Kathleen Sebelius by Virginia Attorney General Ken Cuccinelli, a former Republican state senator.

“Ultimately, we must ensure that no American will be forced by the federal government to purchase health insurance they may not need, want, or be able to afford,” Cantor said. “To ensure an expedited process moving forward, I call on President Obama and Attorney General Holder to join Attorney General Cuccinelli in requesting that this case be sent directly to the U.S. Supreme Court. In this challenging environment, we must not burden our states, employers, and families with the costs and uncertainty created by this unconstitutional law, and we must take all steps to resolve this issue immediately.”

The White House downplayed the ruling, noting in particular that it applies only to the individual mandate and that Hudson explicitly rejected the contention by Cuccinelli that the entire law should be ruled unconstitutional.

“Today's narrow ruling in Virginia on the constitutionality of a provision of the Affordable Care Act is just one of many recent rulings on similar cases that have come down in recent months,” according to a statement on the White House Web site. “Since the law passed, opponents of reform have filed more than 20 different legal challenges. Judges have already granted the administration's motion to dismiss 12 of these cases. And in two cases, federal judges looked at the merits of the opponents' arguments, determined that the Affordable Care Act is constitutional, and upheld the law.

“We disagree with the ruling issued . . . in Virginia, and the Department of Justice is considering its appeal options,” the White House stated.

Irvin “Sam” Muszynski, J.D., director of APA's Office of Healthcare Systems and Financing, said there was nothing in the ruling that should impede implementation of the new law. “So for now we cannot lose our focus on harnessing the positive developments for psychiatrists and their patients that are embodied in the new law,” he told Psychiatric News.

The ruling focuses on whether the requirement to buy health insurance violates the Constitution's so-called commerce clause, which grants to Congress the right to regulate interstate commerce. Cuccinelli and many other Republican opponents of the law have argued that choosing not to buy health insurance cannot be construed as an “economic activity” subject to regulation by Congress.

Hudson, in his ruling, concurred. “To survive a constitutional challenge, the subject matter must be economic in nature and affect interstate commerce, and, second, it must involve activity,” Hudson wrote. “Every application of commerce clause power found to be constitutionally sound by the Supreme Court involved some form of action, transaction, or deed placed in motion by an individual or legal entity. The constitutional viability of the Minimum Essential Coverage provision in this case turns on whether or not a person's decision to refuse to purchase health care insurance is such an activity. . . .

“Neither the Supreme Court nor any federal court of appeals has extended commerce clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” Hudson wrote. “In doing so, enactment of the minimum essential coverage provision exceeds the commerce clause provisions vested in Congress.”

The Obama administration and proponents of the law, including many health policy experts, argue that the choice to buy health insurance can be constitutionally regulated by Congress because seeking health care without a means to pay for it is an economic activity that negatively affects the entire health care system.

“Make no mistake: individuals who choose to go without health insurance are actively engaged in economic decision making—the decision to pay for health care out of pocket or to seek uncompensated care,” the White House said. “Every year millions of those who have chosen to go without health insurance actively seek medical care, which is evident in the billions of dollars spent on uncompensated care every year.

“The Affordable Care Act came into being precisely because of the interconnectedness of our health care costs. People who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay. Those costs—$43 billion in 2008 alone—are borne by doctors, hospitals, insured individuals, taxpayers, and small businesses throughout the nation.”

Whatever the merits of the arguments, at least one legal expert who spoke with Psychiatric News said that the Virginia ruling flies in the face of judicial precedent regarding the commerce clause.

“Since the New Deal, the courts have taken a very pragmatic approach to the commerce clause, saying that Congress has the power to regulate anything that has a substantial impact on commerce,” Simon Lazarus, senior public policy counsel for the National Senior Citizens Law Center, told Psychiatric News. “Congress can use whatever means are rational to achieve a goal, where the goal is the legitimate regulation of commerce.”

Lazarus said it was noteworthy as well that Hudson rejected the contention by Cuccinelli that the individual mandate provision could not be “severed” from the rest of the law, and that therefore the entire PPACA should be rendered unconstitutional. (Severance in this context is a legal term referring to whether a legal ruling can be applied to one provision of a law without implicating the entire law.) In fact, Hudson ruled that the individual mandate could be severed.

Lazarus added that there was no doubt the issue would wend its way to the Supreme Court. “There are other pending suits, and the issue will work its way through the circuit court of appeals and probably within two years make its way to the Supreme Court,” he said.