Federal Appeals Court OKs Individual Mandate

In a legal victory for the Obama administration, a federal appellate court has upheld a lower court finding that Congress has the power to require that individuals purchase healthcare insurance.

The United States Court of Appeals for the Sixth Circuit in Cincinnati has affirmed the ruling by the U.S District Court for the Eastern District of Michigan in Detroit that "the minimum coverage provision is a valid exercise of legislative power by Congress under the Commerce Clause."

The court case stems from a Michigan lawsuit challenging the individual mandate section of the federal Patient Protection and Affordable Care Act. The challenge was filed by four Michigan residents and the Thomas More Law Center, a conservative public interest law firm based in Ann Arbor.

The plaintiffs had asked the district court to declare that Congress lacked authority to pass the minimum coverage provision and that the penalty for not purchasing healthcare coverage be declared an unconstitutional tax. The district denied plaintiffs' motion for a preliminary injunction and they appealed.

The appeal was argued on June 1, 2011. In the 64-page ruling released Wednesday the Appeals Court rules that Congress has the authority to require health insurance and with that ruling it declines to address whether the penalty is a permissible tax.

• "Thomas More argues that the minimum coverage provision exceeds Congress's power under the Commerce Clause because it regulates inactivity. However, the text of the Commerce Clause does not acknowledge a constitutional distinction between activity and inactivity, and neither does the Supreme Court. Furthermore, far from regulating inactivity, the provision regulates active participation in the healthcare market."
•  "Congress had a rational basis for concluding that leaving those individuals who self-insure for the cost of healthcare outside federal control would undercut its overlying economic regulatory scheme. Congress found that without the minimum coverage provision, the guaranteed issue and community rating provisions would increase existing incentives for individuals to delay purchasing health insurance until they need care."
• "Congress had a rational basis for concluding that the minimum coverage requirement is essential to its broader reforms to the national markets in healthcare delivery and health insurance. Therefore the minimum coverage provision is a valid exercise of Commerce Clause power.

According to the New York Times, the ruling "is the first of three opinions to be delivered by separate courts of appeal that heard arguments in the healthcare litigation in May and June. Opinions are expected soon from panels in both the Fourth Circuit in Richmond, Va. And the Eleventh Circuit in Atlanta."

At least one of the cases is expected to be heard by the U.S. Supreme Court during its next term, which begins in October.

The ruling is viewed as an important win for the Obama administration especially since the three-judge panel was comprised of two Republican appointees and one Democratic appointee.

A statement posted on the website of the Department of Justice, which is defending the law says: "We welcome the Sixth Circuit's ruling today dismissing this challenge to the Affordable Care Act and its finding that Congress acted within its authority in passing this landmark health care reform law. We will continue to vigorously defend the health care reform statute in any litigation challenging it. Throughout history, there have been similar challenges to other landmark legislation such as the Social Security Act, the Civil Rights Act, and the Voting Rights Act, and all of those challenges failed. We believe these challenges to health reform will also fail."

See Also:
Federal Judge Rules Individual Mandate Unconstitutional
Behind the Waning Support for ACA's Individual Mandate
Federal Judge Strikes Down Key Healthcare Law Provision