On Friday, a federal appeals court ruled that the Obama health law’s requirement that every American buy health insurance is unconstitutional — bringing the legal challenge to Obama-Care much closer to the US Supreme Court.
This is the highest profile of the several cases winding their way through the courts, filed by 26 states as well as several private parties soon after the Affordable Care Act was enacted in March 2010.
The ruling was “bipartisan.” Judge Frank Hull, appointed by President Bill Clinton, joined Judge Joel Dubina, appointed by George H.W. Bush, in a thunderous denunciation of the administration’s claims. The opinion gutted core legal and policy arguments for the law.
ObamaCare’s defenders claim that all Americans consume health care, so Congress can use its power under the Commerce Clause of the Constitution to compel everyone to pay for their care via insurance. The purpose of that individual mandate, they insist, is to prevent “free riders” from shifting their health-care costs on to others.
Nonsense, said the judges: The administration’s arguments are a “convenient sleight of hand,” obscuring what the law truly does. In reality, they concluded, it forces healthy people to buy “fully loaded” health plans to subsidize insurance companies — which in turn are compelled to provide unlimited coverage to people with chronic illnesses and pre-existing conditions.
In short, the law converts insurers into private tax collectors, collecting mandatory premiums from the healthy to pay for politically popular changes in the insurance laws.
Drawing on copious statistics, the judges show that today’s health-care “free riders” are largely illegal immigrants (who are exempt from the mandate) and low-income Americans (who will get coverage under the law’s vast expansion of Medicaid). In other words, the mandate doesn’t prevent free riding — it enforces it.
In imposing the mandate, wrote the judges, “the Congress sought to mitigate” the costs of popular reforms like covering pre-existing conditions and removing lifetime caps on payouts “by compelling healthy Americans outside the insurance market to enter the private insurance market and buy insurers’ products.”
That is, it forces people to enter the insurance market — and forcing people to enter into commerce is different from regulating them once they voluntarily engage in it. Only the latter is constitutional.
When people forego insurance, that is “inactivity,” argued Judge Roger Vinson, who ruled for the 26 states and against the Obama administration in a lower court. Vinson said that if Congress “has the power to compel an otherwise passive individual into a commercial transaction,” there is no practical limit on Congress’ power.
Judges Hull and Dubina agreed with Vinson. But they made a further argument that may be decisive before the Supreme Court — namely, that the Obama administration contrived its Commerce Clause argument on a falsehood.
The Obama lawyers argue that health-care consumption is “universal” and “inevitable,” that there is no such thing as being “inactive” in health-care commerce, that people without insurance are actively deciding to be “free riders.”
That’s a whopper. Half the population consumes little or no health care, the federal Agency for Healthcare Research and Quality reports. Yet the law would subject them to the same insurance mandate as those who consume health care.
“The government’s position,” said the judges, “amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life.” That, the judges conclude, is too much power. Indeed.
Betsy McCaughey, a former New York lieutenant governor, is author of “The Obama Health Law: What It Says and How to Overturn It.”