Opponents of Obamacare rejoiced Friday after a federal appeals court in Atlanta ruled the individual mandate at the heart of President Barack Obama’s healthcare reform legislation is unconstitutional.
The 2-to-1 verdict in the 11th Circuit court in Atlanta sets up a dramatic, seemingly inevitable election-year showdown in the U.S. Supreme Court over the legality of President Obama’s signature legislative initiative.
Former New York lieutenant governor and healthcare expert Betsy McCaughey said the ruling effectively puts the brakes on cash-strapped states’ implementation of the Patient Protection and Affordable Care Act.
“Many more states now will slow down or entirely halt their current efforts to create state insurance exchanges,” said McCaughey, who hailed the decision as “a very important day for all Americans who care about individual liberty, and a very important day for those who are concerned about the economic growth urgently needed by this nation.”
McCaughey predicted states won’t spend scare resources preparing to implement a law that appears very vulnerable to being thrown out as unconstitutional.
Asked if the decision slams the brakes on implementation efforts at the state level, McCaughey replied: “Oh yes. They will be obligated to make that decision, because that’s the prudent decision in the best interest of their own local taxpayers.”
Friday’s ruling gave ObamaCare opponents a much-needed victory. In June, a Cincinnati court ruled in favor of the law in a case brought by the Thomas More Law Center. That ruling was notable because one of the judges in the majority was a Republican.
So far, federal judges in Florida and Virginia have ruled against the Act, while judges in Michigan and Virginia upheld it. Judges appointed by Democrats have consistently upheld the law, while Republican judges generally ruled against it. But Friday, one Republican judicial appointee and one Democratic judicial appointee concurred that the individual mandate is unconstitutional.
Virginia Attorney General Ken Cuccinelli, who has been leading a separate legal challenge to ObamaCare in the Old Dominion, issued a statement congratulating the 26 state attorneys general who successfully brought the constitutional challenge to the 11th Circuit Court.
"The court determined that the power to force one citizen to purchase a good or service from another is outside the established outer limits of both the Commerce Clause and the Necessary and Proper Clause,” Cuccinelli stated.
“The court also ruled that although the president and Congress want to now call the penalty a tax to make it pass constitutional muster, the penalty cannot be sustained under the federal government's taxing authority because the penalty is clearly not a tax,” he said.
In May, the separate suit brought by Cuccinelli was heard by Fourth Circuit Court of Appeals in Richmond, which has yet to issue a ruling.
The setback on its legislative centerpiece put an exclamation point on another tough political week for the administration. The White House issued a statement Friday that it “strongly” disagrees with the 11th Circuit’s decision, and predicted its ruling will be overturned.
Considering the decisive language used in the 11th Circuit’s majority opinion, however, that could prove difficult.
“The individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and is therefore unconstitutional,” wrote Chief Judge Joel Dubina. “This economic mandate represents a wholly novel and potential unbounded assertion of congressional authority: The ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”
McCaughey’s reaction: “That’s very accurate. If Congress can force individuals to buy health insurance, Congress can force individuals to buy stocks and bonds to prop up Wall Street, or American-made automobiles to prop up Detroit.”
In one setback to ObamaCare opponents, the 11th Circuit Court also ruled that the individual mandate is “severable” from the rest of the 2,700-page law. That means the other provisions can remain in effect.
Legal experts say it is almost inevitable now that the Supreme Court will hear the challenge to ObamaCare prior to the election.
“There are a few minor procedural tools the solicitor general might try to use to delay things,” McCaughey said. “But I think the Supreme Court will understand that this is very much in the nation’s interest, not simply because of the presidential election. A reasonably timely decision is needed because of the timetable within in the law itself, states are expending huge amounts of money preparing for a law that might never go into effect.
“States are crippled with uncertainty over the future impact of this law. So it is very important for the welfare of the nation that this decision be made,” she said.
Robert Alt, senior legal fellow and deputy director of the Center for Legal and Judicial Studies at The Heritage Foundation, estimates an 85 percent chance the Supreme Court will rule on the various appeals in June 2012.
“It was sharply worded,” Alt said of the 11th Circuit ruling. “But I think it was sharply worded in part because of the very serious constitutional problems that are inherent in the statute.”
Alt said the 11th Circuit rejected the constitutionality of the individual mandate based what he called the administration’s “broccoli problem.”
In January, U.S. District Judge Roger Vinson of Florida issued a sweeping ruling tossing out the entire law. If the federal government could mandate a health-insurance purchase because it somehow affects interstate commerce, he asked, what purchase couldn’t it require? Vinson said by that logic the federal government could require citizens to purchase broccoli -- a point widely mocked by the left but one the administration has yet to overcome legally.
McCaughey said the 11th Circuit ruling could have major implications for the looming Congressional “supercommittee” debate over deficits and entitlements. Obamacare drastically expanded Medicaid to cover an estimated 85 million people by 2018, and counted on billions in projected revenue from individual-mandate penalties to help defray that cost, she said.
“And now the question is, what is the administration going to do about that? They’ve been ardently, vocally calling for entitlement reform and cuts in entitlements. But they’re only talking about Medicare,” said McCaughey.
“The new deal that was passed on Aug. 2nd bars this supercommittee from cutting Medicaid,” she said. “But Medicaid is the big elephant in the room. Medicaid is the huge entitlement just created.
“So it’s going to be very interesting to see how the Obama administration handles this,” she said, adding: “The best way to reform entitlements is not to put newly created ones into effect.”
McCaughey said the economically viable portions of the new law many consumers find desirable, such as allowing children to stay on their parents’ policies until age 26, and altering the lifetime caps on reimbursements to patients, “could be retained in a 20-page bill in plain English, if consumers want these features.”
Alt predicted that if the Supreme Court invalidates the individual mandate but leaves intact other provisions of the bill such as the stipulation that consumers must be covered for pre-existing conditions, Congress would have no choice but to act to keep insurance firms in business.
“The Obama administration has argued that if you strike down the mandate and require everything else, it will lead to what they call ‘the ineluctable failure’ of the healthcare market in the United States,” he said.
“Essentially, the health insurers couldn’t continue to operate like that. That’s an example of why Judge Vinson got it right in the lower court. … The statute just doesn’t operate without the mandate. You can’t really carve that out and make it work.”
Alt predicted a mixed Supreme Court verdict along the lines of the 11th Circuit ruling would lead to “pretty heavy lifting right away by Congress. Otherwise the insurance industry would get gutted by this.”