A Constitutional challenge was brought forward by a number of states
shortly after the passage of the
Patient Protection and Affordable Care Act. It was prompted
by the Congressional mandate requiring all citizens to purchase health care
insurance or be fined. According to the
Obama administration and other backers, the newly passed
legislation is justified by Congress’ power to regulate commerce. Those
challenging the law feel this mandate is testing the outer limits of
Congressional usage of the power under the commerce clause. This mandate
establishes a unique fine — one that is assessed for not doing something
(inactivity) — and is felt to be is without precedence in U.S.
Attorneys David Rivkin and Lee Casey filed a lawsuit in Florida on
behalf of 20 other state attorneys general. They argue that the Constitution
grants Congress the power to tax and to regulate commerce between the states.
However, they assert, it does not give Congress the power to require
individuals to buy health insurance and impose a fine if they do not as this
impairs personal liberty without precedence.
In addition, the National Federation of Independent Business (NFIB) has
joined the states in the allegations and strongly objecting to this form of
taxation. They have stated that this mandate will increase health care costs
for small businesses.
Some of those defending this legislation as constitutional have claimed
the lawsuits that have been filed are frivolous and hypocritical. Even the U.S.
Department of Health and Human Services filed a motion to dismiss these
In August, U.S. District Court Judge Henry E. Hudson ruled in a case
involving the state of Virginia’s challenge to the constitutionality of
the law. In his 32-page opinion he wrote, “Never before has the commerce
clause and associated necessary and proper clause been extended this far.”
Similarly, Florida Federal District Judge Roger Vinson ruled recently to
allow Rivkin and Lee’s 20-state-backed challenges to continue in the
courts by overruling the arguments presented by the Department of Justice for
dismissal. In his 65-page ruling, he wrote that “the power that the
individual mandate seeks to harness is simply without prior precedent.”
By denying dismissal, it appears after the sure-to-be-filed appeals
occur that this will most likely be decided by the U.S. Supreme Court. This
introduces further indecision and uncertainty into health care reform based on
the possible legal outcomes.
Outcomes could nullify the reform
This litigation by no means is a sure victory for those raising these
challenges. Some legal scholars feel any challenges will be readily defeated as
the Supreme Court has tended to not want to limit Congressional power in this
However, if the requirement for mandatory insurance is declared
unconstitutional, the entire health reform package could unwind. The
administration and critics of the plan know it will not work without mandatory
insurance. The financing of this package is dependent on spreading the risk
pool and the resources from having premiums paid by all Americans. This is
necessary in part to help fund the additional costs to cover more people, those
with pre-existing conditions, allow for insurance portability and for the
mandated services including preventive-care initiatives included in the
The insurance-for-all mandate is so important to the
administration’s plan, they did not include the usual legislative
provision that if one part of the law is legally struck down, that the
remainder of the bill remains in place.
When interviewed by ABC News’ George Stephanopoulos, Obama denied
that the penalty for not buying insurance was an
excise tax. He was repeatedly asked to defend that position
by the interviewer and “absolutely” rejected the argument that the
penalty is a tax. Ironically, it appears the administration may have difficulty
defending their legal challenge under the commerce clause. Supporters are now
suggesting they might argue that the mandate is permissible under the broader
taxing powers for the general welfare, despite never describing the penalty as
a tax before the bill passed or in Obama’s nationally televised arguments
The voters speak
This summer, Missouri voters sent a strong message to Washington
regarding public concerns about this particular mandate in the legislation: 71%
of the voters cast their ballots against penalizing people who do not buy
insurance. This similar issue will be on the ballot for voters in Oklahoma,
Arizona and Florida this month. While this type of protest and state referenda
will not change federal rulings, they do send a message that there are fairly
strong objections to this aspect of the legislation.
Speaker of the House Nancy Pelosi (D-Calif.) was asked directly if it
was constitutional for Congress to require Americans to buy health insurance
and pay a fine if they did not comply. Her response: “Are you
serious?” Speaker Pelosi should realize now that many Americans are
serious in demanding an answer to the question and Judges Hughes and
Vinson’s rulings support that the public is entitled to a better answer.
What is this excise tax?
Is the fine for not buying health care insurance an excise tax? This
type of mandatory fine for not purchasing a product or service has not been
seen before on this scale in this country. However, this issue becomes fuzzier.
The actual legislation lists and defines the excise taxes to be used to help
pay for the plan. These excise taxes are on businesses such as tanning salons
and medical device companies and, as the bill was written, does not define the
penalty for not having insurance as one of those excise taxes. It appears the
administration will have to defend the use of the commerce clause as the basis
for this mandate and not the power to tax the citizens.
All government will be tested
Many feel the Supreme Court will be reluctant to limit Congressional
power in this type of legislation. However, before you write it off as entirely
not justified; consider this individual mandate further and some of its
potential consequences on your practice of medicine.
- All Americans will be required to purchase health insurance or pay a
fine, the types of policy and coverage will be determined by the
- Beginning in 2014, a new federal agency will have the power to
standardize insurance benefits, restrict how insurance companies manage their
finances (medical loss ratios) and they will need permission to raise premiums;
- The same legislation has mandates forcing insurers to cover more
expensive primary-care and some new preventive services in full while the
insurers may be blocked from raising premiums.
Physicians should pay attention as the insurance companies will have to
reduce their costs to remain profitable. If they cannot raise premiums, it
seems we will see further reductions in reimbursements.
What can we expect?
The next 3 years will see this legislation challenged in the courts as
the Department of Justice lawyers defend the constitutionality of the
individual mandate under the commerce clause is constitutional. In addition to
this challenge in the courts, there will be challenges to the health care
reform at the ballot box. The outcomes of these challenges will ultimately
determine the extent we see governmental control over the entire health care
It is difficult to predict what the final reform package will be and if
it will be fully implemented in 2014 as scheduled. One thing that is for
certain, during this next 3 years we will see ongoing controversy and
clarifications to this legislation.
Douglas W. Jackson, MD, is Chief Medical Editor of
Orthopedics Today. He can be reached at Orthopedics
Today, 6900 Grove Road, Thorofare, NJ 08086; e-mail:
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