National Consumers League

Mandated health insurance ruled unconstitutional


On Monday, a federal judge in Virginia ruled that a central provision of the new Affordable Care Act that mandates that most Americans obtain health insurance is unconstitutional. Since the law passed earlier this year, there have been more than 14 challenges to the law; this is the first instance where the case was not dismissed or the law was not upheld. History tells us that major new laws often face legal challenges. The Civil Rights Act, Social Security Act, and Voting Rights Act all withstood legal challenges. Proponents of the health reform act argue that the new law falls well within Congress’s power to regulate economic activity under the Commerce Clause, the Necessary and Proper Clause, and the General Welfare Clause. The mandate for most Americans to obtain health insurance is one of the key provisions of the Affordable Care Act that will help extend coverage to more than 30 million people currently uninsured.  Paired with rate regulation, the addition of healthy people to the insurance rolls should make it more affordable for the system – payors, providers, and patients – to treat more expensive and chronic conditions. The Virginia court found that the mandate that all Americans carry a minimum level insurance by 2014 – exceeds Congress’ power to regulate interstate commerce since it compels individuals without health insurance to involuntary enter the stream of commerce to purchase health insurance. However, individuals who choose to go without health insurance are “voluntarily” deciding to pay for health care out-of-pocket or to seek uncompensated care. Every year millions of those who have chosen to go without health insurance actively seek medical care. Thus, people who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay. The judge in the Virginia case, Judge Hudson, agreed that the implementation of the health care reform law should continue uninterrupted. In the nine months since the health reform law was passed, there has been progress to strengthen our health care system, including implementing a new patient’s bill of rights to end some of the worst insurance company abuses, such as banning insurance companies from discriminating against people with preexisting conditions. The Justice Department is considering whether to appeal the ruling to the 4th Circuit. As this case and others make it through the appeals process, ultimately the Supreme Court will likely decide the constitutionality of the health reform act, and the reach of Congress’ power to regulate interstate commerce.