Ap­peals court blasts man­date

11th Cir­cuit rul­ing sets up high court show­down

Modern Healthcare - - Late News - Joe Carl­son

In an opin­ion stretch­ing more than 300 pages, the 11th U.S. Cir­cuit Court of Ap­peals in Atlanta on Fri­day struck down the in­di­vid­ual in­surance man­date in the Pa­tient Pro­tec­tion and Affordable Care Act but al­lowed the rest of the sweep­ing law to stand.

A di­vided three-judge panel of the fed­eral ap­peals court ruled in fa­vor of the 26 states that had joined a law­suit in Pen­sacola, Fla., ar­gu­ing that the re­form law re­lies on an un­con­sti­tu­tional ex­pan­sion of con­gres­sional power.

Fri­day’s rul­ing means the U.S. Supreme Court now has be­fore it a split in the cir­cuit courts. The 6th U.S. Cir­cuit Court of Ap­peals in Cincin­nati up­held the law in June, and the losers in that case filed for per­mis­sion last month to have their case heard by the Supreme Court.

The 11th Cir­cuit judges ruled that Congress’ abil­ity to reg­u­late in­ter­state com­merce can­not be ex­panded to in­clude a power to com­pel pri­vate in­di­vid­u­als to buy health in­surance.

Un­der the law, nearly all unin­sured Amer­i­cans would face a penalty on their in­come taxes start­ing in 2014 for not hav­ing health in­surance. The court ruled that Congress es­sen­tially or­dered cit­i­zens to buy in­surance so it could then reg­u­late that pur­chase as a form of com­merce.

“What Congress can­not do un­der the Com­merce Clause is man­date that in­di­vid­u­als en­ter into con­tracts with pri­vate in­surance com­pa­nies for the pur­chase of an ex­pen­sive prod­uct from the time they are born un­til the time they die,” the judges wrote.

Sen. Or­rin Hatch (R-Utah) ap­plauded the

Hatch, who in­tro­duced leg­is­la­tion to re­peal the in­di­vid­ual man­date, ap­plauded the de­ci­sion.

rul­ing as a vic­tory for per­sonal lib­erty. “Never be­fore has the fed­eral gov­ern­ment forced the Amer­i­can peo­ple to pur­chase some­thing they do not want,” he said in a writ­ten state­ment.

Hatch—the rank­ing mem­ber of the Se­nate Fi­nance Com­mit­tee, which pro­duced much of the health­care law—has in­tro­duced leg­is­la­tion to re­peal the in­di­vid­ual in­surance man­date.

Fri­day’s 11th Cir­cuit opin­ion also in­cluded a dis­sent from U.S. Cir­cuit Judge Stan­ley Mar­cus, who wrote that the ma­jor­ity opin­ion ig­nored decades of Supreme Court prece­dents that ex­pand and de­fine the scope of Congress’ Com­merce Clause pow­ers to in­clude over­ar­ch­ing reg­u­la­tory schemes.

“The in­di­vid­ual man­date was de­signed and in­tended to reg­u­late quintessen­tially eco­nomic con­duct in or­der to ame­lio­rate two large na­tional prob­lems,” Mar­cus wrote. “First, the sub­stan­tial cost-shift­ing that oc­curs when unin­sured in­di­vid­u­als con­sume health­care ser­vices—as vir­tu­ally all of them will, and many do each year—for which they can­not pay; and, sec­ond, the un­avail­abil­ity of health in­surance for those who need it most—those with pre-ex­ist­ing con­di­tions and lengthy med­i­cal his­to­ries.”

The rul­ing struck down the in­di­vid­ual in­surance man­date but left in­tact the rest of the law, in­clud­ing a pro­vi­sion that would ex­pand states’ Med­i­caid rolls by at least 14 mil­lion peo­ple. The ap­peals court re­jected ar­gu­ments by the lit­i­gant-states that the law should also be thrown out be­cause it forced state lawmakers into costly Med­i­caid ex­pan­sions.

How­ever, it’s not clear whether the re­form law is fi­nan­cially ten­able with­out the in­di­vid­ual man­date.

Pro­po­nents of the law say the man­date was cen­tral to re­form as a way to off­set in­sur­ers’ costs, since it also took away their right to turn away sick ben­e­fi­cia­ries.

“This rul­ing would put the ban on dis­crim­i­na­tion against peo­ple with pre-ex­ist­ing con­di­tions at risk,” House Mi­nor­ity Leader Nancy Pelosi (D-Calif.) said in a state­ment. “There have been and will con­tinue to be a wide range of at­tempts to roll back the law, but as in pre­vi­ous court rul­ings across the coun­try, I am con­fi­dent that the Affordable Care Act will ul­ti­mately be sus­tained.”

But Rep. Joe Pitts (R-Pa.), chair­man of the House En­ergy and Com­merce Health Sub­com­mit­tee, said the rul­ing brought the nation “one step closer to the elim­i­na­tion of the un­con­sti­tu­tional man­date to pur­chase health in­surance” and urged Congress to con­tinue ef­forts to re­peal the en­tire law.

“The Affordable Care Act will not re­duce health­care costs,” he said in a writ­ten state­ment. “We still need real re­form.”

Still out­stand­ing are rul­ings from the 4th Cir­cuit Court of Ap­peals in Rich­mond, Va., which heard oral ar­gu­ments in May on two dif­fer­ent law­suits chal­leng­ing the re­form law. The judges have not yet ruled on those cases.

Sen. Tom Harkin (D-Iowa), chair­man of the Health, Ed­u­ca­tion, La­bor and Pen­sions Com­mit­tee, de­scribed Fri­day’s ma­jor­ity opin­ion as “wrong.”

“For­tu­nately, the 11th Cir­cuit’s will not be the fi­nal word on this is­sue—I am con­fi­dent that the Supreme Court will find the Affordable Care Act con­sti­tu­tional, en­sur­ing that Amer­i­cans keep cru­cial new pro­tec­tions against the un­fair prac­tices of in­surance com­pa­nies,” Harkin said.

Rep. Fred Up­ton (R-Mich.), chair­man of the pow­er­ful En­ergy and Com­merce Com­mit­tee, said the law will push pre­mi­ums higher.

“The sooner the courts make a fi­nal rul­ing on this un­con­sti­tu­tional law, the sooner we can be­gin to pick up the pieces and make the kinds of com­mon-sense, bi­par­ti­san re­forms that should have been at the heart of health­care re­form all along,” Up­ton said in a writ­ten state­ment.

—with Rich Daly and Jessica Zig­mond

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