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Appeals court rejects health law mandate

Onus now shifts to Supreme Court

Senator John F. Kerry said the ruling 'flies in the face of recent precedent and longstanding jurisprudence.' Senator John F. Kerry said the ruling "flies in the face of recent precedent and longstanding jurisprudence."
By Donovan Slack
Globe Staff / August 13, 2011

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WASHINGTON - An Appeals Court panel yesterday struck down as unconstitutional the national health care law mandate that nearly every American buy insurance, the most prominent rejection yet of the key element of President Obama’s signature achievement.

A panel of the Court of Appeals for the 11th Circuit, based in Atlanta, ruled 2 to 1 that Congress does not have the authority to force people to buy “an expensive product from the time they are born until the time they die.’’

The decision conflicts with the Court of Appeals for the Sixth Circuit in Cincinnati, which ruled in June that the requirement is constitutional because health care is an economic activity that Congress has the authority to regulate under the Constitution’s Commerce Clause.

The stark disagreement between the two courts means the legality of the law’s centerpiece, the individual mandate, will almost certainly be determined by the US Supreme Court, scholars said.

“Especially now that you’ve got a split in the circuits, the Supreme Court almost has to take it,’’ said Douglas Laycock, a law professor at the University of Virginia.

The Supreme Court could take up the issue as soon as its next session, which begins in the fall.

The 11th Circuit ruling has no immediate bearing on the health care overhaul, which is being implemented in stages. The insurance mandate is not set to take effect until 2014. Also, government lawyers are expected to appeal the divided decision to the full appeals court.

The decision was not a complete loss for the Obama administration. It had appealed a district court decision in Florida, where Judge Roger Vinson ruled that the entire overhaul was unconstitutional, in a suit brought by 26 states to prevent implementation of the law. But the appeals court panel said the rest of the law would be constitutional if the mandate was stricken.

The judges said Vinson, who ruled that the mandate was inextricably tied to the rest of the law, had overreached and that the “lion’s share of the act has nothing to do with private insurance, much less the mandate that individuals buy insurance.’’

It is unclear how the overhaul would fare with no mandate. Without a requirement that healthy Americans buy insurance, the law’s supporters say, a crucial funding mechanism is lost and people would game the system by waiting until they are sick to get insurance. The law requires insurers to accept them even with preexisting conditions.

More than two dozen legal challenges have been filed against the law since Obama signed the measure in March 2010. Many were dismissed based on technical reasons. Three district court judges sided with the Obama administration. Two others objected to at least the insurance mandate.

Some half-dozen cases have reached the appellate courts. One key appeal in Richmond, Va., is still pending.

In yesterday’s decision, Chief Judge Joel Dubina and Circuit Judge Frank M. Hull wrote that the mandate to buy insurance exceeds Congress’s constitutional power to regulate commerce “by requiring an individual to enter into a compulsory contract with a private company.’’

“The individual mandate is breathtaking in its expansive scope,’’ the ruling read.

Circuit Judge Stanley Marcus disagreed in a dissent, writing that “the majority has ignored many years of Commerce Clause doctrine developed by the Supreme Court.’’

“It is clear that Congress’s rule-making power extends to both the health insurance and health care markets, areas of commerce that Congress has long regulated and regulated heavily,’’ he wrote.

The Cincinnati court had found that the mandate was constitutional because it covers economic activity that “Congress had a rational basis to believe has substantial effects on interstate commerce’’ and because Congress had a similar basis to believe that the provision was essential to reforming the interstate health care and insurance markets.

White House officials sought to tamp down speculation that major components of the law could be struck down before it is even fully implemented.

“Today’s ruling is one of many decisions on the Affordable Care Act that we will see in the weeks and months ahead,’’ said Stephanie Cutter, assistant to the president, said in a statement. “In the end, we are confident the Act will ultimately be upheld as constitutional.’’

For the 26 states suing the government, the ruling was welcome. “This is a huge victory in the fight to protect the freedom of American citizens from the long arm of the federal government,’’ Bill Schuette, attorney general in Michigan, said in a statement.

Foes of the overhaul got another victory yesterday in Ohio, where the state Supreme Court unanimously rejected a challenge to a proposal that will allow voters there to decide whether to pass a amendment to their state’s constitution that would reject the individual mandate, the Associated Press reported.

The legislative battle over the health care overhaul in 2009 and 2010 was one of the most contentious in the past century, with the insurance mandate the main target of conservatives. Obama’s success in its passage fanned Tea Party fervor, which swept scores of new Republicans into Congress and gave them control of the House.

Although the flagging economy and dizzying markets are expected to be key issues in the 2012 presidential elections, the health care overhaul - what Republicans have dubbed “Obamacare’’ - will play a central role.

Robert J. Blendon, a professor of health policy and political analysis at the Harvard School of Public Health, said that until the Supreme Court decides its constitutionality, the law will continue to give grist to Republican presidential candidates to criticize Obama and to motivate grassroots activists angered by the belief that the law infringes on individual rights.

“It allows the Republicans to challenge the president, to keep that alive as an issue,’’ Blendon said.

The appellate court’s rejection of the individual mandate could provide more ammunition to rivals of Mitt Romney, the early front-runner for the Republican nomination. As governor of Massachusetts, Romney backed such a mandate in the state’s health care overhaul, which Congress used as a model for the national law.

Romney has attempted to deflect criticism of his support of the state mandate by declaring changes to the problematic health care system a state’s-rights issue, not one that should be decided by the federal government.

A spokeswoman for Massachusetts Republican Senator Scott Brown, who won election last year partially because of his opposition to the law, reiterated his belief yesterday that Congress had no business requiring citizens to buy insurance.

“The senator believes a one-size-fits-all health care plan for the entire nation, with its higher taxes and increased spending, is wrong,’’ Marcie Kinzel said.

Senator John F. Kerry, a stalwart advocate for the law’s passage, called the ruling “curious’’ and said it “flies in the face of recent precedent and longstanding jurisprudence.’’

“As a practical matter, when you get right down to it, when people choose to go without health care, they’re shifting their costs onto average taxpayers and people who pay for insurance. That’s wrong and more practically, it’s awful economics,’’ Kerry said. “Health care reform [has] . . . worked here in Massachusetts, and it’s one of the reasons almost all of our citizens are protected by quality health insurance today.’’

Theo Emery of the Globe staff contributed to this report. Donovan Slack can be reached at dslack@globe.com. Follow her on Twitter @DonovanSlack.

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