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Oct 15 2010

Challenges to the Constitutionality of the Federal Health Reform Law

Michigan - Judge George Caram Steeh of the Eastern District of Michigan rejected the challenges to the law put forth by the Thomas More Law Center, a nonprofit public interest law firm in Ann Arbor and three individuals who objected to being compelled to either buy health insurance coverage that they do not want or pay a  penalty.   They challenge that the Constitution does not grant Congress to regulate inactivity (the decision not to buy insurance).  Rather, they argue, the Commerce Clause grants Congress the power to regulate interstate commerce which requires activity.  Judge Steeh, on October 7, 2010, ruled that by forgoing insurance, the plaintiffs’ decision not to purchase insurance could shift the cost of their health care onto other market participants.  Judge Steeh determined that “because the 'penalty' is incidental to these purposes, plaintiffs’ challenge to the constitutionality of the penalty as an improperly apportioned direct tax is without merit."

The plaintiffs are expected to appeal Judge Steeh’s decision.

Florida - U.S. District Court Judge for the Northern District of Florida Roger Vinson issued a 63-page opinion on October 14, 2010, allowing a constitutional challenge to the Federal Health Reform law to proceed. The Florida challenge involves twenty states (Florida, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia, and Alaska) and the National Federation of Independent Business and focuses on the individual mandate and Medicaid expansion.  Judge Vinson’s decision discusses at length whether the individual mandate is a tax or penalty.   If it is not, then the authority that Congress has to impose the mandate comes from the Commerce Clause.  Judge Vinson determined that the mandate is not a tax and thus, must find support in the Commerce Clause.  He further stated that the mandate for individuals to purchase insurance is without precedent, but may ultimately be upheld.  “Of course, to say that something is ‘novel’ and ‘unprecedented’ does not necessarily mean that it is ‘unconstitutional’ and ‘improper.’ There may be a first time for anything. But, at this stage of the case the plaintiffs have most definitely stated a plausible claim with respect to this cause of action,” Vinson ruled.

Judge Vinson dismissed challenges to the employer mandate and the state-based insurance exchanges finding that no constitutional issues existed with these provisions of the law.

A hearing is scheduled for December 16, 2010.

Virginia – On October 18, 2010, Virginia and the Justice Department will conduct a hearing in Richmond on Virginia’s challenge to the health reform law.  Virginia’s challenge, similar to Florida’s, is whether the federal health care law exceeds the powers granted to Congress.

If the federal circuit courts are not in agreement on the constitutionality of the federal health reform law,  we may not have resolution on these until the Supreme Court rules.