Obama Administration Scores a Legal Win on Individual Mandate

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As Adam already noted, a third Clinton-appointed federal judge ruled late yesterday that the Affordable Care Act’s individual mandate passes constitutional muster. Two federal judges appointed by Republican presidents have said the opposite.

Adopting many of the well-worn arguments offered by the Obama Department of Justice, Washington Judge Gladys Kessler wrote yesterday that the decision not to buy health insurance is clearly economic “activity” and therefore the federal government has the power to regulate it under the Commerce Clause. Opponents of the mandate say a decision not to buy a product – like insurance – is passive and therefore not technically “activity. Kessler rejected this, writing in her opinion:

It is pure semantics to argue that an individual who makes a choice to forgo health insurance is not “acting,” especially given the serious economic and health-related consequences to every individual of that choice. Making a choice is an affirmative action, whether one decides to do something or not do something. They are two sides of the same coin. To pretend otherwise is to ignore reality.

Kessler also wrote that the connection between overall insurance premiums and the mandate is obvious and direct, saying the link is “strikingly similar” to a 1942 case called Wickard. In that case, the Supreme Court ruled that the federal government had the authority to prevent a man from growing wheat on the basis that doing so would affect the national market and prices for everyone else. The Obama Administration says if individuals are allowed to forgo insurance and receive uncompensated care as a result, the costs are passed on to Americans who have insurance.

The five plaintiffs in the Washington case – Mead vs. Holder – are all uninsured and said they would pay for care out of pocket or forgo all medical care because of their religious beliefs. Kessler rejected the argument that the individual mandate violated the plaintiffs religious freedoms, pointing out that they were free to pay the individual mandate penalty and still remain outside the health insurance or health care market. On the former argument – that individuals should be able to choose to forgo insurance in favor of paying for their medical care out of pocket – Kessler wrote in a footnote:

To put it less analytically, and less charitably, those who choose–and Plaintiffs have made such a deliberate choice–not to purchase health insurance will benefit greatly when they become ill, as they surely will, from the free health care which must be provided by emergency rooms and hospitals to the sick and dying who show up on their doorstep. In short, those who choose not to purchase health insurance will ultimately get a “free ride” on the backs of those Americans who have made responsible choices to provide for the illness we all must face at some point in our lives.

Kessler’s logic is rooted in the fact that American health care is incredibly expensive. Highlighting a federal law that requires doctors and hospitals to treat patients regardless of their ability to pay, Kessler wrote that she was skeptical an entire class of Americans could afford to pay for medical care without insurance. She noted that the average hospital stay in 2008 lasted four days and cost $29,046 and wrote that some 62% of all personal bankruptcies are due to medical expenses.

Surely disappointing the DOJ lawyers who argued the case in her court, Kessler rejected the Obama Administration’s backup argument that the individual mandate penalty is constitutional because it is a tax. (The federal government has the power to levy taxes.) Relying on arguments made by Florida Judge Roger Vinson, who recently ruled the individual mandate unconstitutional, Kessler said purpose of the individual mandate is to punish uninsured Americans, not to raise revenue.

This case, like the four others decided before it – two in favor of the DOJ and two against it – will be appealed. In addition, a variety of other cases have been dismissed. See here for a full list.

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