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  • Health Reform – The Fighting Continues!

    Health Reform – The Fighting Continues!

     Republicans, with their newly won control of the House of Reprsentatives,  would seem to pose the greatest threat to the health reform law.  They’ve already passed a repeal bill, threatened to defund implementation, and begun holding hostile hearings. Despite these  moves, the biggest threat to the law may come from the judiciary. Two weeks ago, a Florida federal district court ruled the entire law invalid. While the decision is unlikely to have any immediate impact, it represents the second judicial ruling against health reform and makes an eventual Supreme Court decision striking down the law seem more plausible than most would have thought when President Obama signed the bill last year.

    Four district courts have now heard challenges to the law, with two upholding the law and two ruling against it. Naturally, the judges deciding in favor of the law were both appointed by Democrats and the two ruling against it were appointed by Republicans. In all of the cases the central issue is the constitutionality of the individual mandate. Although the mandate’s infringement of personal liberty is what most upsets mandate opponents, the question the courts have focused on is the more mundane one of whether the mandate falls within the scope of the federal government’s power to regulate interstate commerce.

    Under the Constitution, the federal government has only those powers specifically granted to it in that document, one of which is the power to regulate interstate commerce – known as the “Commerce Clause.” This authority has in the past provided the legal basis for a wide range of federal legislation. A key argument of the plaintiffs in the health reform legal challenges is that declining to purchase health insurance, which the federal government would penalize under the law, can’t be considered commerce because it doesn’t constitute activity of any kind. Someone who chooses not to buy health coverage is not engaging in commercial activity, they argue, and so is beyond the reach of the government’s regulatory powers under the Commerce Clause. In defense of the law, the government has argued that an individual’s failure to purchase coverage is economic activity because it’s a unique commodity.  Not buying coverage, they say, results in other Americans picking up the cost of their health expenses when they receive uncompensated care at an emergency room. Thus, failure to purchase coverage disrupts insurance pooling arrangements, causing higher costs for others, and so does represent commercial activity. 

    A secondary, but hugely consequential, issue in these cases is what should happen to the rest of the law in the event that the mandate is deemed unconstitutional. On this point, the two courts ruling against the law parted company. Prior to the Florida court ruling, a Virginia District court found the mandate unconstitutional but also ruled that the rest of the law, including guarantee-issue and the other market reform provisions, should stand. Going way beyond his Virginia colleague, the Florida judge ruled the entire law invalid since it did not contain a severability clause – specific language stating that its provisions were severable and that if one should be stricken the others should nevertheless take effect.

    The cases decided so far and others yet to come are all just a run-up to the final action, which will likely come within one to two years when the Supreme Court has its say on the matter. Unless and until the Supreme Court overturns any of its provisions, health reform will remain law.

    We will keep you informed of any new developments.

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