(This post has been updated to include comments from Ken Cuccinelli.)
Casting a shadow of doubt over the future of the Affordable Care Act, a federal judge in Virginia ruled this afternoon that a major tenet of the new health reform violates the Constitution.
The decision, from George W. Bush-appointed Judge Henry Hudson, says that the federal government does not have the authority to require Americans to have health insurance. This so-called “individual mandate” is a critical companion to law’s requirement that insurers sell coverage to everyone without charging sick people more. The mandate allows insurers to spread risk through the entire population. Without it, health policy experts say many Americans will buy insurance only when they are ill or injured, creating what’s known as an insurance “death spiral,” with costs continually rising for everyone.
Virginia Attorney General Ken Cuccinelli, who spearheaded the case, argued that because the Affordable Care Act did not expressly write the law to make the individual mandate a stand-alone provision, voiding the mandate amounted to voiding the entire law. Judge Henry Hudson rejected this argument and stayed his ruling, meaning implementation of the law will continue while the decision is appealed by the Obama Administration. The Supreme Court will likely make the final decision on whether the individual mandate is constitutional.
Cuccinelli, at a press conference today, said, “It’s a great day for the Constitution,” arguing that, “This lawsuit is not about health care. It’s about liberty.”
Administration officials had an inkling they might not prevail in the Virginia case, telling reporters in a recent briefing that other major tenets of the law could proceed even with the individual mandate. State exchanges, online regulatory marketplaces for health insurance set to begin by 2014, would be unaffected, they said. A massive expansion of Medicaid, as well as hundreds of billions of dollars in subsidies to help low- and middle-income Americans buy coverage, would also proceed apace.
Asked last week if opponents of the Affordable Care Act would be emboldened by a ruling in their favor in Virginia, one Administration official said, “I don’t think it will empower many people more because they already feel empowered.”
Still, today’s decision could have far-reaching ripple effects. Because President Obama can wield his veto pen and Democrats held onto their Senate majority in the recent mid-term elections, congressional repeal of the health reform law is highly unlikely in the next two years. This fact means legal challenges to the law provide the greatest hope Republicans have of scrapping Democratic health reform in one swoop.
The Obama Department of Justice will appeal today’s decision, which counts as an outlier. Every other ruling on similar constitutional challenges has been batted down by a federal judge. Yet the Virginia case, along with a still undecided suit in Florida, have attracted the most attention.
More than 20 GOP state attorneys general and governors have signed the Florida lawsuit, which also says the individual mandate is unconstitutional. Republicans in Congress and in state legislatures have scrambled to support that lawsuit, hoping that, even if the lawsuit is not ultimately successful, its very existence could cast a shadow of doubt over the Affordable Care Act in the short term. Today’s ruling in Virginia may have the effect of slowing implementation, with some states and hospitals hesitant to move forward while the law is in legal limbo.
The heart of the challenge in Virginia, spearheaded by state Attorney General Ken Cuccinelli, hinged on the argument that the Constitution does not give the federal government the power to compel Americans to buy health insurance. If the government could regulate inactivity – choosing to forgo health coverage – it could require Americans to do practically anything, argued the suit.
The Department of Justice countered that it has the authority thanks to a clause in the Constitutional giving the federal government power to regulate commerce. The Administration further said the individual mandate is lawful because Americans who don’t have coverage will be charged a tax, which the government has the power to impose. (Notably, during the health reform debate, the president and congressional Democrats avoided calling the individual mandate penalty, a “tax.”) Judge Hudson disagreed, saying the penalty imposed on Americans who don’t have health insurance is just that – a penalty, not a tax. The tax argument was “a good example of the kinds of leaps in logic the fed government needed to prevail,” Cuccinelli said today.
In October, a Bill Clinton-appointed federal judge in Michigan agreed with the Administration’s commerce clause argument, writing that an individual’s decision to buy or not buy health insurance impacts others since federal law requires hospitals, for instance, to care for people regardless of their ability to pay. These costs, if left unpaid, are indirectly borne by the government and therefore the public, meaning interstate commerce is affected and therefore the federal government can enforce the individual mandate. Hudson, in today’s ruling, said the Obama Administration had “the weaker hand” in its argument that “requiring advance purchase of insurance based on a future contingency in an activity that will inevitably affect interstate commerce.”
“…the same reasoning could apply to transportation, housing, or nutritional decisions,” Hudson wrote. In other words, the Affordable Care Act is an over-reach.
Cuccinelli’s Virginia lawsuit was a battle cry for Tea Partiers who see the Affordable Care Act as a perfect example of how the federal government’s powers have grown far beyond what the Founding Fathers intended when they wrote the Constitution. The Virginia suit cited case law from 1798 and Cuccinelli was fond of noting that President Obama signed the PPACA on the anniversary of the day Patrick Henry famously declared, “Give me liberty or give me death!”