Affordable Care Act (ACA) - Obamacare

Discussion in 'Political Discourse' started by Michael Scally MD, Jan 14, 2010.

  1. #1
    Michael Scally MD

    Michael Scally MD Doctor of Medicine

    The Constitutionality of the Individual Mandate for Health Insurance

    Posted by NEJM January 13th, 2010

    Jack M. Balkin, J.D., Ph.D.

    Once President Barack Obama and Democrats in Congress have passed a health care reform bill, conservative groups are likely to challenge parts of it as unconstitutional, arguing that it oversteps Congress's powers. A key target will be the individual mandate, which is designed to coax uninsured persons into purchasing insurance.

    The term "individual mandate" is misleading for two reasons. First, the law would not actually require all individuals to purchase insurance. The mandate would not apply to dependents,persons receiving Medicare or Medicaid, military families, persons living overseas, persons with religious objections, or persons who already get health insurance from their employers under a qualified plan.

    Second, it is not actually a mandate. It is a tax, which people would not have to pay if they purchased health insurance. The House bill imposes a tax of 2.5% on adjusted gross income if a taxpayer is not part of a qualified health insurance program. The Senate bill imposes what is called an "excise tax," a tax on transactions or events, or a "penalty tax," a tax for failing to do something (e.g., filing your tax return promptly). The tax is levied for each month that an individual fails to pay premiums into a qualified health plan.

    Congress has the power to pass legislation that falls within any of its powers enumerated in the Constitution. There are two obvious sources of congressional power. The first, describedin the General Welfare Clause, is the power "to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States." The second, laid out in the Commerce Clause, is the power "to regulate commerce . . . among the several states."

    The individual mandate is a tax. Does it serve the general welfare? The constitutional test is whether Congress could reasonably conclude that its taxing and spending programs promote the general welfare of the country.1 This test is easily satisfied. The new health care reform bill insures more people and prevents them from being denied insurance coverage because of preexisting conditions. Successful reform requires that uninsured persons, most of whom are younger and healthier than average, join the national risk pool; this will help to lower the costs of health insurance premiums nationally.

    Taxing uninsured people helps to pay for the costs of the new regulations. The tax gives uninsured people a choice. If they stay out of the risk pool, they effectively raise other people's insurance costs, and Congress taxes them to recoup some of the costs. If they join the risk pool, they do not have to pay the tax. A good analogy would be a tax on polluters who fail toinstall pollution-control equipment: they can pay the tax or install the equipment.

    Because the textual argument for Congress's authority under the General Welfare Clause is obvious and powerful, opponents have tried to argue that the tax is unconstitutional because it is a "direct" tax. Under the Constitution, "direct" taxes must be apportioned to state population. That is, if State A has twice as many people as State B, the amount of revenue collectedfrom State A must be twice that collected from State B. Like most federal taxes, the individual mandate is not apportioned to state population.

    The classic examples of direct taxes are taxes on real estate and capitation or "head" taxes on the general population, under which people are taxed no matter what they do. In one of theSupreme Court's first cases, Hylton v. United States, Justice William Paterson held that if there is any doubt, taxes should be classified as indirect rather than direct.2

    The individual mandate is not a direct tax. The House's version is a tax on income. Under the Sixteenth Amendment, income taxes do not have to be apportioned, regardless of the source of the income. The Senate's version is an excise or penalty tax. It is neither a tax on real estate nor a general tax on individuals. It is a tax on events: individuals who are not exempted aretaxed for each month they do not pay premiums to a qualified plan.

    If the individual mandate falls within Congress's power to tax and spend, no other constitutional authority is necessary. However, Congress also has the power to impose the tax under the Commerce Clause. The test in this case is whether Congress could reasonably conclude that the economic activity it regulates has a substantial effect on interstate commerce when all individual instances of the regulated activity are added together. The Supreme Court says that economic activities include buying and selling, borrowing money, agriculture, services, manufacturing, and consumption.

    Even if an activity is local and not economic, Congress can regulate it if it reasonably believes that doing so is necessary to make its regulation of commerce effective.3 (Under the Constitution, Congress has the power to make all regulations that are "necessary and proper" for carrying out its enumerated powers.)

    In 1942, the Supreme Court held that Congress could regulate wheat grown for home consumption as part of a general regulation of farm production.4 People who grew wheat at home substituted it for wheat products they would otherwise purchase in the market; cumulatively, this practice had a substantial effect on interstate farm prices. Similarly, in 2005, in Gonzales v. Raich, the Court held that Congress could regulate marijuana grown for home consumption as part of a general ban on controlled substances, because Congress reasonably concluded that people would substitute homegrown marijuana for other marijuana purchased in black markets.3

    The individual mandate taxes people who do not buy health insurance. Critics charge that these people are not engaged in any activity that Congress might regulate; they are simply doing nothing. This is not the case. Such people actually self-insure through various means. When uninsured people get sick, they rely on their families for financial support, go to emergency rooms (often passing costs on to others), or purchase over-the-counter remedies. They substitute these activities for paying premiums to health insurance companies. All these activities are economic, and they have a cumulative effect on interstate commerce. Moreover, like people who substitute homegrown marijuana or wheat for purchased crops, the cumulative effect of uninsured people's behavior undermines Congress's regulation, in this case, its regulation of health insurance markets. Because Congress believes that national health care reform won't succeed unless these people are brought into national risk pools, it can regulate their activities in order to make its general regulation of health insurance effective.

    One final argument against the individual mandate is that it violates the Fifth Amendment by allowing the government to take property without just compensation. "Takings" occur when the government seizes property from particular individuals; a familiar example is a local government's taking of land by eminent domain. Ordinary income taxes and excise taxes that are levied on a large population and that regulate people's behavior by taxing their income or consumption choices are not considered takings under the Constitution. The individual mandate is just such a tax, not a taking.

    Although opponents will challenge the individual mandate in court, constitutional challenges are unlikely to succeed. The Supreme Court will probably not even consider the issue unless a federal court of appeals strikes the tax down. In that unlikely event, the Supreme Court will almost certainly uphold the tax, at least if it follows existing law. To strike down the individualmandate, it would have to reject decades of precedents. It is very unlikely that there are five votes on the current Court for staging such a constitutional revolution.

    Financial and other disclosures provided by the author are available with the full text of this article at

    Source Information
    From Yale Law School, New Haven, CT.

    This article (10.1056/NEJMp1000087) was published on January 13, 2010, at

    1. Helvering v. Davis, 301 U.S. 619 (1937).
    2. Hylton v. United States, 3 U.S. 171 (1796).
    3. Gonzales v. Raich, 545 U.S. 1 (2005).
    4. Wickard v. Filburn, 317 U.S. 111 (1942).

    The Constitutionality of the Individual Mandate for Health Insurance | Health Care Reform Center
    Last edited: Sep 13, 2013
  2. #2

    HeadDoc Psychologist; Super Moderator

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    does anyone really believe that healthcare reform was going to happen without finding a way to create the resources necessary to pay for it? If you make a decent living, have adequate insurance, and pay taxes, you of course will not want to have a pay a higher tax. The type of tax is perhaps secondary to the basic need to pay a higher amount of taxes to achieve something closer to universal coverage. In Scandinavia, for instance, the tax rates are much higher. Health care is a part of what is purchased. There are other features of their social "safety net" that are covered also. The impact of the current global recession was felt less in these countries than here because of this network.
  3. #3

    BarbellBeast Junior Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    The United States Government doesn't uphold the Constitution anymore. We're led by agendas.
  4. #4
    Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    The New York Times (5/20) editorializes, "The number of states jointly suing to overturn the new health care reform law on constitutional grounds swelled to 20 last week. It is the latest example of conservatives' determination to thwart reforms that will do enormous good." The suit, "filed by state attorneys general and governors, all but one a Republican, seeks to overturn two central elements of the law: a mandate that virtually everyone obtain insurance or pay a penalty; and a big expansion of Medicaid." The Times adds, "Congress has long required states to cover specified groups of people up to specified levels of income. Extending those requirements is consistent, and is in no way an 'unprecedented' encroachment on state affairs." The paper concludes, "We believe the reform law has been carefully framed to stay within constitutional bounds."

    Editorial - Health Care Reform and the Courts -
  5. #5

    unfedpuppy Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    You can always count on the New York Times for great bullshit.
  6. #6

    Jeton Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    i'm very glad to see that the 2nd Amendment got Incorporated to the States today, but it really should have been done via the Privileges and Immunities clause...a part of the 14th Amendment that was hideously mangled by the SCOTUS in the Slaughterhouse cases a century+ ago.

    a reinvigorated P&I-based Incorporation of the 2nd would not only have established stronger protections against unconstitutional gun infringements, but it would also have energized human rights in the USA in general, including "The Constitutionality of the Individual Mandate for Health Insurance"...THAT is why many conservatives fought against that approach, including the NRA.
  7. #7

    james2012 Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Five of the SCOTUS judges have already disagreed in previous cases about allowing this type of power for Congress. This is a penalty no matter how one tries to hide it. If it quacks like a duck, looks like a duck....

    And a penalty no less for not buying something.

    Read: Health insurance mandate – Obama administration now arguing it is a tax | Questions and Observations to see the smoke and mirrors here.

    Read: The Volokh Conspiracy Health insurance mandate as a privacy right violation

    And I just love the usual car insurance argument which is rebuffed in so many places I could hardly list them. It is best described thus:

    Car insurance is mandated by most states, not by Washington. Car insurance is avoidable; health insurance will not be. Car insurance is for the protection of other people, not the driver. Car insurance is mandated in exchange for the privilege of driving. ObamaCare will be required for the privilege of breathing.

    If Congress is allowed to pass this mandate then there will be NO LIMIT to what they can legislate in your life. Think about that for awhile.

    Of course, states like Oklahoma that already lead the nullification of the Real ID act will lead the nullification of ObamaCare regardless of what the SCOTUS says. Nullification is making an historical comeback, already being used for medicinal marijuana and against the REAL ID act. The federal government would rather you and I not know about this tool for the states to check federal power. Boo Hoo for them. As the experts attempt to quell the tide of nullification, Tom Woods fights back with a very effective: Interview with a Zombie — Mises Economics Blog
  8. #8
    Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Health Insurance Politics in Federal Court
    Health Insurance Politics in Federal Court | Health Policy and Reform

    NEJM | August 25, 2010 | Topics: Health Law, Insurance Coverage
    Wendy K. Mariner, J.D., M.P.H., and George J. Annas, J.D., M.P.H.

    Having been outmaneuvered in Congress with the passage of the Patient Protection and Affordable Care Act (“Affordable Care Act,” or ACA), Republicans have taken their case to federal court, arguing that the law’s key provision, the individual mandate to purchase health insurance, is unconstitutional. This argument has been made most prominently by attorneys general from 20 states in a Florida federal court and by the Commonwealth of Virginia in a Virginia federal court. In early August, federal district court judge Henry Hudson decided that the Virginia challenge deserves a hearing,1 thereby giving the constitutional argument an aura of respectability and ensuring that we’ll hear more about the meaning of states’ rights in the context of the Constitution’s Commerce Clause (which grants Congress the authority to regulate interstate commerce), both in court and on the campaign trail.

    Although, as Judge Hudson noted, the case “has a distinctive political undercurrent,”1 the controversy will be argued in the courts in constitutional terms, and Hudson finds the constitutional questions “novel.” Virginia claims that Congress does not have authority under the Commerce Clause to require individuals to obtain health insurance coverage, does not have the power under the Taxing and Spending Clause (which gives the federal government the power of taxation) to impose a tax or penalty on individuals who fail to obtain coverage, and consequently violates Virginia’s sovereign power, protected by the Tenth Amendment, to enact a state law prohibiting Virginia residents from being required to obtain health insurance (a law that Virginia adopted primarily to gain standing to challenge the ACA).

    Hudson uses imagery that is strikingly uncomplimentary toward federal power to frame the core issue: “The Commonwealth defies the Secretary [of health and human services] to point to any Commerce Clause jurisprudence extending its tentacles to an individual’s decision not to engage in economic activity.” The federal government has broad power to regulate economic activities affecting interstate commerce,2 but no court has explicitly ruled that the federal government can regulate what Virginia suggests is an absence of activity, such as not purchasing health insurance.

    The federal government argues that the individual mandate is necessary to support “the financial foundation” of the health care system. The ACA aims to make affordable health insurance available to everyone, regardless of health status. It requires insurers to sell policies covering virtually all health conditions, including preexisting ones, to everyone who wants them. However, such coverage would be prohibitively expensive if people waited until they were sick to buy a policy and would “drive that market into extinction.” Unless everyone buys into the market, with or without a government subsidy, unaffordable health insurance will render health care out of reach.

    Although the decision of any single individual to forgo buying health insurance would not bring down the system, the aggregation of many such individuals would have that effect — just as the aggregation of many wheat farmers growing wheat for their own consumption and state-authorized medical marijuana users growing their own marijuana would affect the wheat and marijuana markets.2 Therefore, since Congress can regulate the insurance industry under the Commerce Clause, it can regulate participation in the health insurance market under the Necessary and Proper Clause (which gives it power to make all laws that are necessary and proper for executing its enumerated powers) in order to carry out the overall regulatory scheme. As the Supreme Court said in the medical marijuana case Gonzales v. Raich, “When Congress decides that the `total incidence’ of a practice poses a threat to a national market, it may regulate the entire class.”3

    Virginia argues that the wheat and marijuana cases both involve “a voluntary decision to perform an act” (growing a crop), whereas the ACA’s individual mandate “requires a person to perform an involuntary act.”1 Hudson summarizes Virginia’s “economic inactivity” argument as follows: “A decision not to purchase a product . . . is not an economic activity. It is a virtual state of repose — or idleness — the converse of activity. At best, [it] regulates future activity in anticipation of need.”1

    If, as the late Chief Justice William Rehnquist put it, the key to the federal government’s authority under the Commerce Clause is defining “an economic activity that might, through repetition elsewhere, substantially affect any sort of interstate commerce,” then the activity of deciding whether to purchase health insurance could well qualify.4 Economists accept, for example, that some forms of “inactivity” affect economic health as much as activity does: for example, our economy remains flat because Americans refuse to consume, and our economic bubble burst partially because Americans failed to save. Similarly, not buying health insurance seems to qualify as an economic activity; it entails making decisions about whether to buy coverage and about how to pay (or not pay) for health care when it is needed. Indeed, one could argue that individuals who do not buy health coverage but use their own resources to get medical care are like farmers and medical marijuana patients who do not buy wheat or marijuana in the regular markets but instead grow their own. Economists easily conclude that not buying health insurance is economic conduct.5 But this controversy will be decided not by how economists view economic activity but by how judges view the reach of the Commerce Clause.

    The states have inherent (police) powers authorizing them to regulate residents’ inactivity — to require residents, for example, to get vaccinations and even to purchase health insurance, as Massachusetts does. The federal government’s powers are limited to those listed in the Constitution, but the reach of the Commerce Clause has necessarily expanded with the national economy. Virginia argues that if Congress can regulate inactivity that affects interstate commerce like insurance and health care, then there is no practical limit to federal regulation and Congress will usurp the state’s police powers.

    The fundamental legal problem is whether, if the federal government can penalize individuals for refusing to purchase health insurance, there is any principle that would limit the power of the federal government to penalize the failure to purchase other products, such as a daily newspaper to save the newspaper business from extinction. The federal government’s answer is that people simply cannot choose “to avoid participation in the health care market.”1 Rather, “it is inevitable . . . that every person — today or in the future — healthy or otherwise — will require medical care,” and the ACA provides a dependable, affordable mechanism to pay for such care.1

    This answer may offer a limiting principle that distinguishes the ACA from a hypothetical penalty for not buying newspapers. There are few nondiscretionary national markets in which virtually all Americans inevitably participate. Congress could not require all Americans to buy cars from Detroit in order to shore up the automobile industry; not everyone needs a car. On the other hand, perhaps the federal government could justify penalizing individuals for not buying an apple a day or for not buying a gym membership or multivitamins, at least if these purchases are seen as integral parts of containing costs in a national health insurance market, because people who don’t make these purchases increase health care costs for all of us.

    We think that the federal government has the more realistic view of how the national economy functions and how the Constitution should function today. Nonetheless, the outcome in the federal courts is far from certain and will ultimately be decided by a Supreme Court that is just as ideologically fractured as the Congress that passed this law. Other clearly constitutional approaches were available, including Medicare for All, or simply raising the income or payroll tax to pay for health benefits, but these would have been even more objectionable to those who are raising Commerce Clause problems with the ACA.

    Judge Hudson’s next decision, this fall, will be on the merits of the case, and as he recognizes, his decision will be appealed no matter how he rules. But health care politics will not be put on hold while we await judicial resolution, which could take years. Without mentioning the Commerce Clause or health care, many politicians will campaign on the argument that the federal government is too big, is too intrusive into our individual lives, and spends too much money. In this debate, the ACA will be exhibit number one.

    Source Information

    From the Department of Health Law, Bioethics, and Human Rights, Boston University School of Public Health, Boston.


    1. Virginia v. Sebelius, 2010 U.S. Dist. LEXIS 77678 (Aug. 2, 2010).

    2. Annas GJ. Jumping frogs, endangered toads, and California’s medical-marijuana law. N Engl J Med 2005;353:2291-2296

    3. Gonzales v. Raich, 545 U.S. 1 (2005).

    4. United States v. Lopez, 514 U.S. 549 (1995).

    5. Rosenbaum S, Gruber J. Buying health care, the individual mandate, and the Constitution. N Engl J Med2010;363:401-403
  9. #9

    james2012 Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Four words: Greece, Spain, Portugal, Iceland. More words: austerity packages. Another word: riots. These programs are unsustainable. The EU chief warned that democracy may disappear in some of these countries: EU chief warns ‘democracy could disappear’ in Greece, Spain and Portugal | Wolves of Liberty

    Thomas Jefferson once stated the obvious - that the more power government has the less liberty you have. In Greece, Spain, and Portugal the riots are occurring because if you suck on the government teat long enough you become dependent on it. Socialism is a recipe for long-term fiscal disaster. The U.S. is suffering from the recession more because we started it. It was Fannie and Freddie along with predatory lending practices forced upon unwitting banks by the likes of ACORN that kicked off and then burst the housing bubble. Look at the history. It is far more complicated that it appears and the answer is not more government involvement but less. You thing TRT is hard now, wait until a huge bureaucracy sits between you and your doctor. Have you seen the chart yet? If not, get ready: GOP Charts Healthcare Bureaucracy

    Nope, this is going to make things a lot worse for many people - including those on TRT.
    Last edited: Sep 29, 2010
  10. #10
    Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Judge Rejects Challenge To Health Care Law
    Judge Rejects Challenge To Health Care Law : NPR

    October 7, 2010

    A federal judge on Thursday rejected an attempt to stop some key provisions of the new national health care law, saying Congress has the authority to require people to get insurance by 2014.

    The ruling — the first in a challenge to the Obama administration's health care overhaul — came in a lawsuit filed in Michigan by a Christian legal group, the Thomas More Law Center, and four people who claimed lawmakers exceeded their power under the Constitution's commerce clause.

    But U.S. District Judge George Caram Steeh in Detroit said the insurance mandate, and the financial penalty if someone skips coverage, are not illegal. He said Congress was trying to lower the overall cost of insurance by requiring participation.

    "Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times," the judge said.

    "As a result, the most costly individuals would be in the insurance system and the least costly would be outside it," Steeh said. "In turn, this would aggravate current problems with cost-shifting and lead to even higher premiums."

    U.S. Justice Department spokeswoman Tracy Schmaler noted the ruling "marks the first time a court has considered the merits of any challenge to this law."

    "The court found that the minimum coverage provision of the statute was a reasonable means for Congress to take in reforming our health care system," Schmaler said. "The department will continue to vigorously defend this law in ongoing litigation."

    Robert Muise of the Thomas More Law Center in Ann Arbor, Mich., said he would take the case to a federal appeals court in Cincinnati.

    The four individual plaintiffs said they do not have private insurance and object to being compelled to buy it. They also fear that any financial penalty paid to the government if they don't get insurance by 2014 would be used to pay for abortions.

    In Florida, a federal judge is overseeing a lawsuit filed by 20 states. They, too, say the law is unconstitutional and claim it would force states to absorb higher Medicaid costs. A decision on whether to dismiss the case is expected by Oct. 14, though the judge said last month that he likely would dismiss only parts while letting others go to trial.

    There is also a lawsuit pending in Virginia.
  11. #11

    james2012 Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Thankfully five SCOTUS judges don't see it that way and know that allowing this power under the Commerce Clause grants unlimited power to the federal government and would negate the need to even have enumerated powers listed in the Constitution, thereby negating one of the main reasons the 13 states ratified to begin with - they were guaranteed limited federal powers.

    Also, thankfully, OK and AZ are starting a blitz of passing on the concept of nullification which correctly states the SCOTUS is not the final arbiter of the constitution when a dispute exists between the federal government and the states. Jefferson and Madison defined it in the principles of '98 and it has been used quite often in the past. It was best explained this way. Assume you and I have a dispute and I ask that the dispute be settled by my mother as the arbitrator. How screwed up is that? Relying of a federal branch to settle a dispute between a federal power and a state power is not how the constitution was envisioned when written. Read the federalist and anti-federalist papers.

    Nullification is picking up steam. I attended a seminar Labor Day weekend held by the Tenth Amendment Center in Fort Worth at the Scott's theater. The theater was filled to capacity - on Labor Day weekend. State legislators from OK and TX were there as well as Thomas E. Woods, author of Nullification - How to Resist Federal Tyranny in the 21st Century. Texas is already started this with the EPA (the letter from our AG was stunning in its "in your face" and shove it attitude. Sheriffs are finally figuring out they are the top LE in any country and can arrest federal officials who violate the constitution.

    And let's not forget - this thing will be de-funded in the House. For those who love Socialized medicine, as a Canadian citizen and my wife being a British citizen, you don't even want to go there - it sucks, period. When Clinton and Kennedy needed healthcare you did not find them running north of the border. To save money, only 30% of stents in Canada are drug-eluting, leading to more deaths as bare-metal stents experience re-stenosis over 30% if the time. NICE and NHS in GB had to be sued to allow the breast cancer treatment Herceptin - a very effective drug. Sue to get life saving medication?! And the current head of medicare and medicaid services under Obama is a known rationing nutjob who has stated how much he loves the British system: Health Care Groups to Congress: Restrict Funding of Office of Medicare Chief Who Advocated Rationing |

    And if you really want to know about the British system, read: For ObamaCare’s Impact Look To Canada And Great Britain | Wolves of Liberty

    Check out Physicans for Reform and see the nightmare we are in for. Hippocrates is replaced by Plato and do no harm is thrown out the window. When government controls something as large as 1/6 of our economy, harm is the only thing that it can do.

    This thing is unconstitutional period.
  12. #12

    james2012 Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    These guys get it right pretty much every time, so I tend to ignore the rulings of activist liberal judges and go to the real experts: David B. Rivkin Jr. and Lee A. Casey - Constitutionality of Health Insurance Mandate Questioned -

    But two important facts remain. One, Justice Kennedy - the swing vote - has said he will not leave until Obama is gone. Add to this the disrespect that Obama showed Alito and the SCOTUS during the SOTU and I think this thing is toast. Not that I really care what the SCOTUS thinks.
  13. #13
    Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Re: The Constitutionality of the Individual Mandate for Health Insurance


    Case No. 10-CV-11156

    BARACK HUSSEIN OBAMA, in his official capacity as President of the United States, et al.,Defendants

    For the reasons given above, plaintiffs’ motion for preliminary injunction is DENIED and the court finds for defendants on plaintiffs’ first and second claims for relief; those claims are DISMISSED.

    Health insurance mandate upheld

    Lyle Denniston Reporter
    Posted Thursday, October 7th, 2010

    A federal judge in Detroit, in a broad ruling upholding Congress’s power to require all Americans to buy health insurance or pay a penalty, decided Thursday that the mandate is necessary to prevent the “extinction” of the nation’s entire health care insurance market. U.S. District Judge George Caram Steeh said the requirement was well within Congress’s power to regulate commerce among the states. The decision is the first by a federal court to rule directly on the constitutionality of the buy-or-be-penalized provision of the sweeping new health care reform law.

    The Obama Administration lost on two arguments it had made to Judge Steeh — that the challengers in the Michigan case had no legal right to sue to stop the insurance mandate, and that their lawsuit in any event was premature. But, after finding that the challengers were properly in court and that a decision was appropriate now, the judge went on to rule that the requirement satisfies the Constitution and dismissed the claims targeting that specific provision of the new law. Thus, the result was a major victory for the Administration.

    The ruling came in the case of Thomas More Law Center, et al., v. Obama, et al. (District Court docket 10-11156) in the Eastern District of Michigan. That lawsuit is one of a lengthy list of court challenges across the Nation to several parts of the new health care law. But the provision requiring everyone to have a health insurance policy by the year 2014 was clearly the most visible part of the package for most Americans, and it has been subjected to the most energetic challenge. The key to most of the challenges is the argument that refusing to buy health insurance is not activity, but inactivity, and Congress has never had the power to order people to engage in economic activity when they choose not to do so.

    But Judge Steeh refused to accept that view of what the insurance mandate is. “Far from ‘inactivity,’” the judge wrote, “by choosing to forgo insurance [the challengers] are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants.”

    This “cost-shifting,” the opinion added, “is exactly what the Health Care Reform Act was enacted to address.” Thus, he rejected the argument of the challengers that he would have to go through “metaphysical gymnastics” in order to find a link between a failure to buy insurance and
    Congress’s power to regulate the interstate market for health insurance.

    “There is a rational basis to conclude,” the judge said, “that, in the aggregate, decisions to forego insurance coverage in preference to attempting to pay for health care out of pocket drive up the cost of insurance….The decision whether to purchase insurance or to attempt to pay for health care out of pocket, is plainly economic. These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance.” Those are the economic effects Congress had in mind, the judge found.

    He also concluded that the health care market “is unlike other markets,” since “no one can guarantee his or her health, or ensure that he or she will never participate in the health care market. Indeed, the opposite is nearly always true. …Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times. As a result, the most costly individuals would be in the insurance system and the least costly would be outside it.”

    That would result, Judge Steeh found, in added cost-shifting and even higher insurance premiums for medical coverage. “The prospect of driving the insurance market into extinction led Congress to find that the minimum coverage provision was essential to the larger regulatory scheme of the Act,” the opinion said.

    At this stage of the Michigan challenge, Judge Steeh ruled only on the plea by the challengers to stop the insurance-purchase requirement and the penalty that would be assessed for failure to have insurance by 2014. The same lawsuit also raises other issues, contending that the new Act intrudes on states’ rights under the Tenth Amendment, violates religious rights, and violates guarantees of legal equality and due process. Those other challenges remain pending before Judge Steeh.

    The Obama Administration, in reacting to the string of court challenges to the new law, has been making essentially the same arguments in court after court: that those who were suing lacked “standing” to challenge the mandate and the penalty, that any legal challenges were not “ripe” at this point because the mandate does not go into effect until 2014, and that, in any event, the mandate was within Congress’s powers to regulate the health insurance market among the states. It thus has asked federal judges to dismiss the challenges.

    A federal judge in Richmond, VA., District Judge Henry Hudson, was the first to rule on a challenge to the new insurance mandate, in a decision on August 2. However, he denied the Administration request to dismiss that case, and is now moving on toward a ruling on the merits. Another significant challenge, by a group of states, is moving forward in federal District Court in Florida.

    Judge Steeh went further than Judge Hudson, finding that the Michigan challengers would face possible legal injury from the mandate, even though it does not take effect for four more years. While the challengers might suffer harm in the future, the judge concluded, they actually are experiencing harm from the provision right now: in order to plan ahead to spend the large sums that they contend will be necessary to pay for health insurance later, they will have to start saving money now, and that will affect their current spending choices. That present financial pressure, the judge said, is enough to give the challengers “standing” to sue.

    Thus, the judge rejected that part of the Administration opposition. The judge also turned aside the Administration claim that such challenges are premature. While the Internal Revenue Service has yet to take any steps to impose the penalty, Judge Steeh said, that is not the issue at this stage. In fact, he said, the challengers in this particular case have indicated that they will not risk the penalty but will buy health insurance if the mandate is upheld in court.

    Moreover, the judge declared, the collection of the penalty at some future point has nothing to do with the central issue he was now confronting: whether the insurance-purchase mandate itself was beyond Congress’s constitutional powers. The challengers, the judge concluded, “have a right to a court determination of the constitutional authority of Congress to enact the statute in the first place.”

    Thus, the judge wound up dismissing the two challenges at issue at this stage: the first claim in the lawsuit, that Congress lacks authority under the Commerce Clause to require everyone to buy health insurance, and the second claim in the lawsuit, that Congress lacks authority to impose a direct tax on individuals when that is not distributed among the states on the basis of population.

    Since the dismissal of those claims, and the denial of the injunction request based on them, are final actions by Judge Steeh, the challengers presumably would be free now to appeal those holdings to the Sixth Circuit Court. It seems unlikely, at present, that the case could make it to the Supreme Court in time for action this Term — unless the challengers were to seek to bypass the Sixth Circuit and make an attempt to go directly to the Supreme Court now.

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    Last edited: Oct 8, 2010
  14. #14

    james2012 Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    It does not matter when or how it will go down. It only matters that it will fail and be repealed outright, or de-funded, or found unconstitutional, or nullified. What courts say matter little anyway. Nullification is probably the way this thing is going down.
  15. #15
    Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Repeal and being found unconstitutional are possible avenues of redress, BUT not nullification. Nullification is a legal theory that a U.S. State has the right to nullify, or invalidate, any federal law which that state has deemed unconstitutional. The theory is based on a view that the sovereign States formed the Union, and as creators of the compact hold final authority regarding the limits of the power of the central government. Under this, the compact theory, the States and not the Federal Bench are the ultimate interpreters of the extent of the national Government's power.

    In the 1950s, Nullification resurfaced in response to the Supreme Court's decision in Brown v. Board of Education, which decided that segregated schools were illegal. At least ten southern states passed various measures preserving segregated schools and refusing to follow the Brown decision. The advocates of these measures argued that the Brown decision was unconstitutional and that the states had the inherent power to prevent that decision from being enforced within their borders.

    The Supreme Court rejected this idea in the case of Cooper v. Aaron, finding that the state governments had no power to nullify the Brown decision. The Supreme Court held that the Brown decision "can neither be nullified openly and directly by state legislators or state executive or judicial officers nor nullified indirectly by them through evasive schemes for segregation." Thus, Cooper v. Aaron held that state attempts to nullify federal law are ineffective.

    In Cooper v. Aaron, Arkansas argued that it was not bound by the Court's decision, since it had not been a party to the original suit; beyond that, Arkansas claimed that a governor of a state had the same power to interpret the Constitution as did the Supreme Court. The Court not only reaffirmed the ruling in Brown that segregation was unconstitutional, but in an unusual step issued an opinion signed by all nine justices. In the decision, the Court reasserted its authority as the ultimate interpreter of the Constitution, and it reminded Arkansas and the nation that ever since 1803 it had been, in Chief Justice John Marshall's phrase, "the province and duty of the judicial department to say what the law is."

    The U.S. Supreme Court in COOPER v. AARON, 358 U.S. 1 (1958) ruled 9-0--a unanimous decision--that there is no such thing as "nullification." Nowhere does the word "nullify" or "nullification" appear in the U.S. Constitution or any of its amendments, including the 10th Amendment. Simply put: there is no such thing as "nullification." It is a legal fantasy. Following is the relevant text from that decision.

    358 U.S. 1 (1958)
    FindLaw | Cases and Codes

    Opinion of the Court by the Chief Justice and Justices Black, Frankfurter, Douglas, Burton, Clark, Harlan, Brennan, and Whittaker.


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    Last edited: Oct 9, 2010
  16. #16

    wannapitchabettertent Junior Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Good for us, our government would never use national health care as a way to control personal
    behavior and liberty........We are so lucky that we have honest and humble politicians.
  17. #17

    james2012 Member

    Re: The Constitutionality of the Individual Mandate for Health Insurance

    Jefferson and Madison are laughing their arses off right now. The use of nullification for the fugitive slave act never happened - it's all made up. The principles of '98 - a child's tale. The use of the principles of '98 by SC also never happened: United States History - Nullification Crisis

    Thomas Woods whose excellent exposure of the arguments above as being without merit has never lost a debate on the subject. I love Interview with a Zombie | Tom Woods. It takes the cake.

    The irony that the SCOTUS does not believe in nullification seems to be lost on some here. Nullification - which strips the SCOTUS of the power to lord over the states and thereby takes us back to the principle that government derives is power from the people and not the other way around - is not liked by the SCOTUS. I'm shocked - SHOCKED I say! What is also forgot is that in every single use of nullification the opinion of the SCOTUS did not matter. Which is WHAT NULLIFICATION IS. It is saying no to ALL federal powers. So what the SCOTUS thinks about nullification DOES NOT MATTER. This is lost on so many people. What Congress and the President think of nullification also does not matter. The tool is constitutionally valid check against federal tyranny so by definition the opinion of the federal government - which is the target of nullification DOES NOT MATTER. Does anyone seriously believe the use of nullification in the past was done by people that cared what the federal powers believed? NO! The tool itself is a way of telling the federal government to go blow themselves. Check out Tenth Amendment Center. You'll get the picture.

    ObamaCare will die either by the SCOTUS or by the House defunding aspects of the bill as to neuter it completely - which to me is not really a victory - or by nullification such as OK and AZ will be attempting by putting it on the ballot for a state constitutional amendment this November. Get enough states to join in and the feds will be licking our boots and not the other way around.

    Using an argument from a federal branch that a tool used SUCCESSFULLY in the past to negate that branches power is an exercise in desperation. Read Thomas Woods Nullification - How to Resist Federal Tyranny in the 21st Century. Argue against those points. Convince me that a constitution that was ratified not by popular referendum but by 13 state conventions leads one to believe that federal power was meant to be supreme. Convince me that all the arguments Dr. Woods uses to prove outright abuse by the SCOTUS of the Commerce, General Welfare, and Supremacy clause are made up. His history and facts can be checked - the bibliography is huge. Convince me that our founders thought it would be just peachy to copy the form of government in Britain where the sovereignty of the government resided in the hands of parliament - making it much easier to abuse power to the point that a war was unleashed against tyranny. The goal of our founders was not to replace a small island off the coast of France with a city in DC.

    The false meme of federal supremacy is a myth. People are beginning to figure this out. Change - real change - is coming.
  18. #18

    james2012 Member

    How to Do Nullification Right

    Don't Tread On Virginia: If SCOTUS Rules ObamaCare Constitutional, States Must Nullify It

    This is what is needed and where many in the Tea Parties are beginning to pivot. They are finally figuring out that Washington is only part of the problem. State Legislators and governors - which many states allow to be recalled- must stand up to protect their citizens against unconstitutional acts by the federal government where an act's constitutionality is not gauged upon what the SCOTUS says about the constitution but by what the Founder's and the original document said. Even the most dense among us cannot deny the facts as laid out in Dr. Woods Nullification - How to Resist Federal Tyranny in the 21st Century.

    Very few know that this tool has been used in the past. Most have never heard of it. Soon, everyone will know about it. I don't care if Congress goes Republican and the President is a Republican in 2012. Republicans grow government as well - just at a smaller pace. Government grew even under Ronald Reagan. It's time to take the reins back.
  19. #19

    Jeton Member

    Re: How to Do Nullification Right

    it's nice to see we've finally got an all-out Tea Party wingnut on deck at Meso...i love circular references to two books n a handful of position papers.

    ironically, Big Money flows into the Tea Parties now, and Big Money has never been prone to financing Liberty. expect the Nullification craze to become a tool solidifying Federal power, with some irony involved. :popcorn:
  20. #20

    james2012 Member

    Re: How to Do Nullification Right

    Seeing as I was banned from Red State and Tea Party Patriots I would hardly qualify as a Tea Party Wingnut. The Tenth Amendment Center is associated with the Tea Parties, but they are also associated with all groups for fiscally sound small government per the constitution.

    On my Facebook page I take it as a point of pride that I was banned by Redstate. Having worked with Dr. Hunter I was able to see firsthand how both parties don't give a rat's ass about you or me. We already know the Democrats stuck it too us, but did anyone know the GOP required that I and others expose their duplicity?

    Read: Healthcare, Senator Jim DeMint And The Establishment GOP | Wolves of Liberty

    Also read: Social Security Institute | Memorandum To The Grass Roots. This was why I was banned from TPP. They were strategic neophytes and still are, but they are gaining in power and strength and are close to getting ready for primetime.

    Other data here: Party Foul! Tea Partiers Eat Their Own In Bitter Internal Feud | TPMMuckraker where I am mentioned tearing into TPP for their stupid lawsuit against Kremer.

    More here: Rush Limbaugh & Michael Steele Join Tea Party Support & Social Security Institute-Demand GOP Senate Stop ObamaCare by Any Means Possible where I am mentioned as a Tea Party Organizer, which I am not. I was associated with the now defunct Tea Party Support which had the goal of creating a communication database and a voter roll project to expose dead voters on voter rolls. In this press release, how our little band of misfits got Rush Limbaugh involved in exposing the GOP duplicity is discussed.

    So wingnut? Nah. That's just a name ignorant people throw out thinking that it is somehow a stroke of genius that a name will discredit powerful forces beyond their own ability to comprehend or control. It never works and never will.

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