What the Sixth Circuit Ruling Means for the Future of Health Reform

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Wednesday’s appeals court ruling on the constitutionality of the Affordable Care Act was undoubtedly a win for the Obama Administration. The Sixth Circuit, based in Cincinnati, agreed with a previous district court ruling that the law’s individual mandate does not violate the Constitution. Challengers argued in this case, as they have in others across the country, that the federal government’s legal right to regulate commerce should not apply to “inactivity,” i.e. a decision not to purchase health insurance. (The ACA will, beginning in 2014, require nearly all Americans to maintain health insurance coverage at all times or pay a penalty.)

Aside from being a victory for the Obama Administration, the Sixth Circuit decision can give us some clues about the strengths and weaknesses of both sides’ arguments. It shows that the government’s defense of the individual mandate is not purely partisan. One of the judges on the three-judge panel in the Sixth Circuit, Jeffrey S. Sutton, was appointed by George W. Bush and is the first Republican to agree with the Obama Department of Justice that the federal government has the power to enforce the individual mandate thanks to the Commerce Clause of the Constitution. In Wednesday’s decision, Sutton, who previously clerked for Supreme Court Justice Antonin Scalia, wrote:

“No one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk. Each requires affirmative choices; one is no less active than the other; and both affect commerce.”

Boyce F. Martin, a judge on the Sixth Circuit panel appointed by Jimmy Carter, said that challengers’ argument about “inactivity” doesn’t hold water. He wrote:

“Although there is no firm, constitutional bar that prohibits Congress from placing regulations on what could be described as inactivity, even if there were it would not impact this case due to the unique aspects of health care that make all individuals active in this market.”

The third judge, James L. Graham, was appointed by Ronald Reagan. He disagreed with Sutton and Martin on the Commerce Clause argument and issued a partial dissent. Graham, like other Republican-appointed district judges that have already ruled against the mandate, said allowing it to stand would essentially give the federal government limitless power. He wrote:

“If the exercise of power is allowed and the mandate upheld, it is difficult to see what the limits on Congress’s Commerce Clause authority would be. What aspect of human activity would escape federal power? The ultimate issue in this case is this: Does the notion of federalism still have vitality?”

Wednesday’s decision was not all positive for the Obama Administration, however. Its backup argument that the individual mandate penalty for not having insurance qualifies as a tax and can therefore be levied by the federal government regardless of the Commerce Clause was rejected. Sutton wrote:

“The individual mandate is a regulatory penalty, not a revenue-raising tax, for several reasons. First, that is what Congress said. It called the sanction for failing to obtain medical insurance a “penalty,” not a tax. Words matter, and it is fair to assume that Congress knows the difference between a tax and a penalty, between its taxing and commerce powers, making it appropriate to take Congress at its word. That is all the more true in an era when elected officials are not known for casually discussing, much less casually increasing, taxes. When was the last time a candidate for elective office promised not to raise “penalties”?…At the end of the day, this penalty is not a “Tax[]” under Article I of the Constitution, and Congress’s taxing power thus cannot sustain it.”

Though it’s certainly noteworthy, the 6th Circuit’s ruling is but one of many opinions that will shape the legal battle over the constitutionality of the individual mandate and the Affordable Care Act. The Supreme Court will likely decide the final outcome sometime in 2012.

With Massimo Calabresi