Individual Mandate in Healthcare Reform Law Ruled Unconstitutional by Federal Judge

December 13, 2010

December 13, 2010 — The requirement in the Affordable Care Act (ACA) for individuals to obtain health insurance coverage is unconstitutional because it oversteps the government's authority to regulate interstate commerce, a federal judge in Virginia ruled today.

The ruling from US District Judge Henry Hudson in Richmond, Virginia, turns up the heat on the embattled healthcare reform law, which faces challenges in other federal courts as well as repeal efforts led by resurgent Congressional Republicans. The last word on the law eventually could come from the US Supreme Court.

US District Judge Henry Hudson. Bob Brown/Richmond Times-Dispatch, via AP

"Despite the laudable intentions of Congress in enacting a comprehensive and transformative health care regime, the legislative process must still operate within constitutional bounds," Hudson wrote.

"The unchecked expansion of congressional powers to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it's about an individual's right to choose to participate."

While declaring the individual mandate unconstitutional, Hudson did not issue an injunction against implementing it, as its opponents had sought. "The award of declaratory relief is sufficient to stay the hand of the Executive branch pending appellate review," he wrote. Neither did he invalidate the entire law.

Hudson's ruling in a suit filed by Virginia Attorney General Kenneth Cuccinelli II, a Republican, is enormously important because the Obama administration considers the individual mandate to be the ACA's linchpin. Without it, other key reforms in the law will not work as intended.

Appointed by President George W. Bush, Hudson is the first federal judge to rule that a portion of the new law violates the US constitution. Federal judges in Detroit, Michigan, and Lynchburg, Virginia — both appointees of President Bill Clinton — have upheld the soundness of the law, particularly as it relates to the Commerce clause of the constitution that allows the federal government to regulate interstate commerce. The 2 judges have agreed with the Obama administration's argument that people who forgo healthcare coverage seriously disrupt the interstate healthcare marketplace by shrinking the insurance risk pool, which in turn drives up premiums for the insured. In addition, the cost of free care for the uninsured gets shifted to healthcare providers and, ultimately, insured individuals and taxpayers. The individual mandate corrects these problems, according to the federal government.

To opponents of the law such as Cuccinelli, the ACA takes the unprecedented step of commanding individuals to purchase goods and services on threat of penalty, which amounts to regulating commercial "inactivity." As such, the individual mandate is "beyond the outer limits of the Commerce Clause," Cuccinelli said in a court filing.

At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it's about an individual's right to choose to participate.

Today's decision by Hudson, as well as those by his counterparts in Detroit, Michigan, and Lynchburg, Virginia, have been based on the merits of the opposing parties' arguments. In addition, 12 other federal suits against the law have been dismissed before proceedings reached this weightier phase. The latest such suit — filed by a physicians' group, an individual physician, and an unnamed patient — was thrown out by a federal judge in Newark, New Jersey, last week because, in her opinion, the plaintiffs had not suffered specific injuries that were either actual or imminent.

In the column of pending decisions, federal judges in northern Florida and northern Ohio — both appointees of President Ronald Reagan — have denied motions by the Obama administration to dismiss anti-ACA lawsuits. The case in northern Florida is the most prominent of them all, because the plaintiffs consist of 16 state attorneys general and 4 governors, and all but one are Republicans. The judge in that case is expected to issue a decision later this month or in January after hearing oral arguments this Thursday.

Legal experts predict that the checkerboard legal dispute will eventually end up before the Supreme Court, especially as losers and winners on the federal district court level take their cause to various federal appellate courts. If those appellate courts issue conflicting decisions on the ACA, the nation's highest court then is likely to intervene and settle the matter. However, it is also possible that the Supreme Court could take up the issue of the law's constitutionality without waiting for appellate decisions, given the huge scope of the controversy.

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