By Jennifer Tsao -
This morning, a federal district judge in Virginia ruled that a key provision of the new health care reform law — the “Minimum Essential Coverage Provision,” otherwise known as the “individual mandate” – is unconstitutional. U.S. District Judge Henry E. Hudson held that Congress exceeded its constitutional powers under the Commerce Clause, or associated Necessary and Proper Clause, by requiring each citizen to arrange for the purchase of health insurance. (Virginia v. Sebelius, E.D. of VA Case No. 3:10-cv-188-HEH, court opinion linked here)
Judge Hudson, who was appointed by George W. Bush, is the first judge in the country to invalidate any part of the new health care reform law, the Patient Protection and Affordable Care Act (PPACA). In siding with Virginia Attorney General Kenneth T Cuccinelli, II, the judge observed that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.” In other words, an individual’s personal decision to purchase — or not to purcase —health insurance from a private provider is beyond the historical reach of the U.S. Constitution.
It is the White House’s view, however, that Congress was well within its authority under the Commerce Clause because the costs of the uninsured translate to interstate economic activity. In court briefs, the Secretary of the Department Health and Human Services argued that because the Act regulates health care financing, it is “quintessentially economic activity.” The Secretary pointed out that in 2009 alone 45 million people—an estimated 15% of the population—went without health insurance. “The uninsured shift $43 billion in the cost of their care annually to other market participants, including providers, patients (in the form of higher costs) insurers, and the insured population (in the form of higher premiums).”
Judge Hudson also rejected the Secretary’s argument that the individual mandate provision is a product of Congress’s taxing power. Referring to earlier versions of the bill, the judge found that Congress did not intend the mandate to be a bona fide revenue raising measure under the General Welfare Clause, but rather as a penalty. This somewhat subjective finding undoubtedly will form a basis of the government’s appeal.
The Court granted Virginia’s summary judgment as to the individual mandate, PPACA Section 1501, severing it from the rest of the Act. It denied Virginia’s request to enjoin the law pending further determinations by the appellate levels. Presumably, the appellate courts will have ruled on this provision prior to the effective date of 2014. As Judge Hudson acknowledged when it denied the Secretary’s motion to dismiss in August, “While this court’s decision may set the initial judicial course of this case, it will certainly not be the final word.”
News reports covering the Virginia court’s ruling have all noted within the first couple lines that Judge Hudson was appointed by President George W. Bush, highlighting how the health care reform debate continues to be a highly-politicized process. Currently before the federal court in Pensacola, Florida is a similar challenge brought by 20 state attorney generals. Except for Louisiana, each of the states is represented by Republican attorneys general or governors. The National Federation of Independent Business, a leading conservative small-business group, has also joined the suit. Newly elected GOP governors in several more states have indicated they will join the suit when they take office.
Interestingly, Virginia filed its lawsuit separately. It is not clear why Cuccinelli did not join the other states. Cuccinelli has stated that he did not join the suit because Virginia had already passed a law — the Virginia Health Freedom Act which states that residents cannot be ordered to buy insurance – and, therefore, Virginia had a better chance filing on its own. Others have speculated, however, that Cuccinelli did it to further his political aspiration and therefore did not want to share the spotlight.
Two courts, one in Virginia and one in Michigan, have already dismissed lawsuits challenging the constitutionality of PPACA.