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Health Care Reform Provision Ruled Unconstitutional

Today, the Eleventh Circuit Court of Appeals has ruled that a provision of the Patient Protection and Affordable Care Act (“ACA”), the Obama administration’s health care reform bill, requiring all individuals to purchase at least a minimum amount of health insurance by 2014, is unconstitutional.  This decision is in conflict with the June 29, 2011 decision of the Sixth Circuit Court of Appeals, finding the same provision to be constitutional.

The individual mandate provision has been the subject of several lawsuits throughout the country, with courts split as to the constitutionality of the provision. The cases being heard throughout the country examining the constitutionality of the individual mandate generally contend that Congress has exceeded its powers under the Commerce Clause with the individual mandate.

The Sixth Circuit was the first federal appeals court to decide the issue, and the Eleventh Circuit is now the second circuit to decide.  The Fourth Circuit has also heard arguments regarding the constitutionality of the individual mandate but has not yet issued its decision. 

The plaintiffs bringing the Eleventh Circuit case are two private individuals, the National Federation of Independent Business, and 26 states, namely Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming.

The Eleventh Circuit heard this appeal from the United States District Court for the Northern District of Florida, which found the individual mandate to be an unconstitutional exercise of Congress’s powers under the Commerce Clause.  The district court also found that the independent mandate was not severable from the remainder of the ACA, meaning that the entire Act was invalid.  The plaintiffs in the district court case also argued that the Act’s expansion of Medicaid was unconstitutional, but the district court granted the government summary judgment on that issue and the Eleventh Circuit affirmed the district court’s decision. 

The Eleventh Circuit’s opinion traced the jurisprudence of the Commerce Clause powers with a review of the most influential Supreme Court cases, beginning with the 1942 Wickard v. Filburn decision through the 2005 Gonzalez v. Raich decision.  Ultimately, the court noted that “even assuming that decisions not to buy insurance substantially affect interstate commerce, that fact alone hardly renders them a suitable subject for regulation.”  The opinion continues that the connection between the regulated subject matter and interstate commerce is lacking, and “[t]o connect this conduct to interstate commerce would require a ‘but-for causal chain’ that the Supreme Court has rejected, as it would allow Congress to regulate anything.”

In contrast, the Sixth Circuit concluded that Congress had a “rational basis for concluding that the minimum coverage requirement is essential to the broader reforms to the national markets in health care delivery and health insurance” and that purchasing health insurance is “decidedly economic.”

The Eleventh Circuit opinion found that the individual mandate provision is severable from the remainder of the ACA, and therefore, the unconstitutionality of the individual mandate would not cause the entire Act to be invalidated. 

The Eleventh Circuit’s finding has now created a split among the circuits and it is almost certain that the Supreme Court will decide the constitutionality of the ACA.  

If you have questions regarding the Eleventh Circuit's opinion, please contact any member of Greenebaum's Health and Insurance Team.

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