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August 12 2011

Keeping Score on Obamacare's Individual Mandate

Anna Rittgers

In a blistering opinion, the U.S. Court of Appeals for the Eleventh Circuit (Alabama, Florida, and Georgia) has ruled in Florida v. Dept. of  Health and Human Services that the individual mandate in the 2010 Affordable Care Act (commonly known as "Obamacare") unconstitutional.  

This decision moves Obamacare one step closer to the Supreme Court, setting the stage for an inevitable showdown over the scope of the federal government's powers.  If the law is ultimately overturned, the Founders' vision of a federal government of limited and enumerated powers will remain in effect.  If Obamacare is upheld by the high court, no constitutional bar will remain to prevent progressive transformation of the national economy into a European-style social democracy, with individual liberty as the price.

The government argued that Congress' power to mandate Americans purchase private health insurance was granted by the Constitution's Commerce Clause ("to regulate Commerce . . .among the several States") and in its power "[t]o lay and collect Taxes." 

The plaintiffs (26 states, two individuals, and the National Federation of Independent Business) challenged the constitutionality of the individual mandate.  The majority upheld the district court's finding that the individual mandate was unconstitutional: "The government's position amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life."

The court stated that though the decision not to buy a good or a service may affect commerce, it is a "facile conclusion" that Congress may therefore regulate the decision not to buy something as part of its Commerce Power.

"The federal government's assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.. . That an economic mandate to purchase insurance from a private company is an expedient solution to pressing public needs is not sufficient."

The majority also dismissed the government's argument that the individual mandate is a tax, and therefore constitutional:

"It is not surprising to us that all of the federal courts, which have otherwise reached sharply divergent conclusions on the constitutionality of the individual mandate, have spoken on this issue with clarion uniformity. Beginning with the district court in this case, all have found, without exception, that the individual mandate operates as a regulatory penalty, not a tax."

However, the circuit court reversed the district judge's ruling that the lack of a severability clause meant that since one component of the law was unconstitutional, it poisoned the entire law and made it unconstitutional.  The court held that most of the new law's provisions had nothing to do with the individual mandate.  The court effectively severed the individual mandate provisions from the rest of Obamacare, allowing the rest of the Affordable Care Act to stand.

The question of the individual mandate's constitutionality is currently on appeal in one additional circuit. The Fourth Circuit (Maryland, North Carolina, South Carolina, Virginia and West Virginia) heard oral arguments earlier this year in Virginia v. Sebelius on the constitutionality of the individual mandate, but has not yet issued a ruling.

The government will probably seek an en banc review, which means 12 judges in the Eleventh Circuit will decide whether to the review the panel's decision.  If the government fails to get a rehearing or a reversal, we will have a circuit split because of the opposite conclusion in another federal circuit. 

In June, the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee) decided in Thomas More Legal Center v. Obama that Congress' individual health insurance mandate is a constitutional exercise of its powers under the Commerce Clause.  The Sixth Circuit's decision has already been challenged, and the Supreme Court has yet to determine whether it will hear an appeal in this particular case.

When different federal circuit courts reach different outcomes on the same federal issue, the "law of the land" is different depending on which jurisdiction you are in.  It is up to the Supreme Court to resolve the discrepancy.

The individual mandate provision is set to take effect in 2014.   The question now is:  when will the Supreme Court act to stop Congress from its unconstitutional power grab?    

Let's hope that the Supreme Court will weigh in on the matter as soon as possible, so that the country will not be forced to wait until after the 2012 elections to start undoing this unconstitutional law.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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