The 11th Circuit Court of Appeals on Friday ruled that the health care reform law’s requirement that nearly all Americans buy insurance is unconstitutional, a striking blow to the legislation that increases the odds that the Supreme Court will have to review the law.
The suit was brought by 26 states — nearly all led by Republican governors and attorneys general. The Department of Justice is expected to appeal.
The 2-1 ruling marks the first time a judge appointed by a Democrat has voted to strike down the mandate. Judge Frank Hull, who was nominated by former President Bill Clinton, joined Chief Judge Joel Dubina, who was appointed by George H.W. Bush, to strike down the mandate.
The Obama administration’s requirement that most citizens maintain minimum health coverage as part of a broad overhaul of the industry is unconstitutional, a federal judge ruled, striking down the linchpin of the plan.
U.S. District Judge Henry Hudson in Richmond, Virginia, said today that the requirement in President Barack Obama’s health-care legislation goes beyond Congress’s powers to regulate interstate commerce. While severing the coverage mandate, Hudson didn’t address other provisions such as expanding Medicaid.
Hudson, appointed by President George W. Bush found the minimum essential coverage provision of the act “exceeds the constitutional boundaries of congressional power.â€
The decision left intact other provisions of the law and only affects the part that requires most U.S. citizens to maintain minimum health coverage beginning in 2014.
The ruling is the government’s first loss in a series of challenges to the law mounted in federal courts in Virginia, Michigan and Florida, where 20 states have joined an effort to have the statute thrown out. Constitutional scholars said unless Congress changes the law, its fate on appeal will probably hinge on the views of the U.S. Supreme Court’s more conservative members.
Supreme Court
“I am gratified we prevailed,†Virginia Attorney General Ken Cuccinelli said in a statement. “This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution.â€
U.S. health-care stocks extended gains after the ruling. The Standard & Poor’s 500 Health Care Index rose 0.5 percent at 12 p.m. New York time. UnitedHealth Group Inc. and Coventry Health Care Inc. led gains.
Tracy Schmaler, a spokeswoman for the U.S. Justice Department, didn’t immediately reply to voicemail and e-mail messages seeking comment on Hudson’s decision. Reid Cherlin, a White House spokesman, did not immediately reply to an e-mailed request for comment.
‘Prominent Conservatives’
“Some prominent conservative justices will go against it, but there is no serious indication that every single one will go against it,â€, Mark Hall, a professor at Wake Forest University School of Law, who serves on a federal advisory board set up to help implement the law, said ahead of the ruling.
“There’s a lot of activity focused now on alternatives to the mandate,†said Dan Mendelson, chief executive officer of Avalere Health, a Washington-based consulting firm. One option might be to provide access to all people, even ones with pre- existing conditions, to buy insurance, and limit the times they could sign up.
“It’s using a carrot instead of a stick,†Mendelson said in a telephone interview last week.
Robert Zirkelbach, a spokesman for health insurers’ Washington lobby group America’s Health Insurance Plans, declined to comment on the record about whether insurers had discussed such an alternative with the administration or whether there was a way to design such a policy in a way that would be sufficient to replace the effects of the individual mandate. Through the individual mandate and expansions of Medicaid and employer-based coverage, the law is estimated to provide 32 million more people with coverage by 2019, according to the Congressional Budget Office.
The case is Commonwealth of Virginia v. Sebelius, 10-cv- 00188, U.S. District Court, Eastern District of Virginia (Richmond).
Attorneys general from 13 states sued the federal government Tuesday, claiming the landmark health care overhaul is unconstitutional just seven minutes after President Barack Obama signed it into law. The lawsuit was filed in Pensacola after the Democratic president signed the 10-year, $938 billion bill the House passed Sunday night.
“The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty, that all citizens and legal residents have qualifying health care coverage,” the lawsuit says.
Legal experts say it has little chance of succeeding because, under the Constitution, federal laws trump state laws.
Florida Attorney General Bill McCollum is taking the lead and is joined by attorneys general from South Carolina, Nebraska, Texas, Michigan, Utah, Pennsylvania, Alabama, South Dakota, Idaho, Washington, Colorado and Louisiana. All are Republicans except James “Buddy” Caldwell of Louisiana, a Democrat.
Some states are considering separate lawsuits — Virginia filed its own Tuesday — and still others may join the multistate suit. In Michigan, the Thomas More Law Center of Ann Arbor, a Christian legal advocacy group, sued on behalf of itself and four people it says don’t have private health insurance and object to being told they have to purchase it.
McCollum, who is running for governor, argues the bill will cause “substantial harm and financial burden” to the states.
The lawsuit claims the bill violates the 10th Amendment, which says the federal government has no authority beyond the powers granted to it under the Constitution, by forcing the states to carry out its provisions but not reimbursing them for the costs.
It also says the states can’t afford the new law. Using Florida as an example, the lawsuit says the overhaul will add almost 1.3 million people to the state’s Medicaid rolls and cost the state an additional $150 million in 2014, growing to $1 billion a year by 2019.
“We simply cannot afford to do the things in this bill that we’re mandated to do,” McCollum said at a press conference after filing the suit. He said the Medicaid expansion in Florida will cost $1.6 billion.
“That’s not possible or practical to do in our state,” he said. “It’s not realistic, it’s not right, and it’s very, very wrong.”
South Carolina Attorney General Henry McMaster, who is also running for governor, said the lawsuit was necessary to protect his state’s sovereignty.
“A legal challenge by the states appears to be the only hope of protecting the American people from this unprecedented attack on our system of government,” he said.
The 11th Circuit Court of Appeals on Friday ruled that the health care reform law’s requirement that nearly all Americans buy insurance is unconstitutional, a striking blow to the legislation that increases the odds that the Supreme Court will have to review the law.
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