This past Friday, August 12, 2011, the 11th Circuit Court of Appeals ruled the individual mandate in the Obama Health Care Law unconstitutional. It did not, however, strike down the entire law. (The opinion can be found here.) In January, a federal district court in Florida had found the mandate, which requires citizens to buy health insurance, was unconstitutional and struck down the entire law because it did not have a savings clause. The 11th Circuit affirmed part of that decision—i.e., that the mandate is unconstitutional.
A divided three-judge panel of the 11th Circuit sided with 26 states that filed a lawsuit to block President Obama’s signature domestic initiative. The panel said that Congress exceeded its constitutional authority by requiring Americans to buy insurance or face penalties. In particular, it stated the mandate to be “a wholly novel and potentially unbounded assertion of congressional authority.”
The panel further stated, “[T]he individual mandate contained in the Act exceeds Congress’s enumerated commerce power. . . . The power that Congress has wielded via the Commerce Clause for the life of this country remains undiminished. Congress may regulate commercial actors. It may forbid certain commercial activity. It may enact hundreds of new laws and federally-funded programs, as it has elected to do in this massive 975- page Act. But what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”
The panel also concluded, “It cannot be denied that the individual mandate is an unprecedented exercise of congressional power. As the CBO observed, Congress ‘has never required people to buy any good or service as a condition of lawful residence in the United States.’ . . . . “Never before has Congress sought to regulate commerce by compelling non-market participants to enter into commerce so that Congress may regulate them. The statutory language of the mandate is not tied to health care consumption—past, present, or in the future. Rather, the mandate is to buy insurance now and forever. The individual mandate does not wait for market entry.”
The decision is a major setback for President Obama. The federal government had appealed the ruling by the federal district judge who struck down the entire law in January. The case, however, is clearly headed to the U.S. Supreme Court, which will have the final say. In fact, it is now more likely that the Supreme Court will hear the case. The fact the 11th Circuit and 6th Circuit are at odds with each other in their respective rulings increases the likelihood that the Court will decide this issue.
What is particularly notable about this decision is that it overturned the district court’s severability ruling—i.e., it held that, regardless whether the mandate is unconstitutional, the rest of the law remains intact. If the Supreme Court rules that way too, it will mean the rest of ObamaCare will remain intact and good law even after the mandate is stricken. This outcome, however, will not have been intended. As news reports indicated last year, the whole reason the mandate exists in the first place is so that insurers have a large new pool of premiums flowing in to help offset the costs they will incur from now having to cover people with preexisting conditions, etc. If that pool disappears, the whole arrangement theoretically becomes financially unsustainable.
As stated above, the Supreme Court will likely combine this decision and the Sixth Circuit’s decision from just two months ago and ultimately resolve once and for all the issue of whether the individual mandate in the Obama health care law is constitutional and, perhaps, whether the rest of the law itself can remain in effect without a savings clause.
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