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The New ObamaCare Decision Is Good

The insurance mandate is unconstitutional and we don't have to eat peas.

by
Dan Miller

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August 15, 2011 - 2:40 pm
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The U.S. Court of Appeals for the Eleventh Circuit issued its 301 page decision on ObamaCare on August 11. The majority (Chief Judge Dubina and Judge Hull) opinion consists of 207 pages, the dissent (Judge Marcus) of 94. The majority affirmed the decision of Judge Vinson holding the medical insurance mandate unconstitutional as beyond the limits of the Commerce Clause. However, it overruled his holding that ObamaCare must therefore fall in its entirety. Judge Marcus’ dissent opined that the individual mandate was within the power of Congress under the Commerce Clause. The three judges had been designated to hear the case on May 3 and I provided a bit of information about them here. The White House of course expressed displeasure with the ruling.

The majority opinion is rather less acerbic than was Judge Vinson’s. If the Supreme Court agrees with it, there might be enough wiggle room to permit Congress to enact major amendments to get around some of the problems. The court noted in its conclusion,

The power that Congress has wielded via the Commerce Clause for the life of this country remains undiminished. Congress may regulate commercial actors. It may forbid certain commercial activity. It may enact hundreds of new laws and federally-funded programs, as it has elected to do in this massive 975-page Act. But 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 present Congress is unlikely to try to patch ObamaCare and, for now at least, it seems that the next Congress will be even less likely.

The court tried to analyze whether the failure to purchase insurance constitutes “economic activity.”  It said that while a decision not to buy “insurance and to self-insure for health care is a financial decision” whether it amounts to economic activity is less than clear.

Nor do we find this sort of categorical thinking particularly helpful in assessing the constitutionality of such an unprecedented congressional action. After all, in choosing not to purchase health insurance, the individuals regulated by the individual mandate are hardly involved in the “production, distribution, and consumption of commodities” . . . .  Rather, to the extent the uninsured can be said to be “active,” their activity consists of the absence of such behavior, at least with respect to health insurance. Simply put, the individual mandate cannot be neatly classified under either the “economic activity” or “noneconomic activity” headings. (Except as noted, cases, footnotes and internal citations omitted, emphasis in original)

The court then examined three basic factors: (1) the unprecedented nature of the mandate, (2) whether there were any limits to what the Congress could do and (3) the “far-reaching” implications for our federalist structure.

Finding no precedent supporting the individual mandate because there is none, the court also found the scope of the mandate too broad:

the individual mandate’s attempt to reduce the number of the uninsured and correct the cost-shifting problem is woefully overinclusive. The language of the mandate is not tied to those who do not pay for a portion of their health care (i.e., the cost-shifters). It is not even tied to those who consume health care. Rather, the language of the mandate is unlimited, and covers even those who do not enter the health care market at all. . . .

. . . .

The individual mandate sweeps too broadly in another way. Because the Supreme Court’s prior Commerce Clause cases all deal with already-existing activity—not the mere possibility of activity (in this case, health care consumption) that could implicate interstate commerce—the Court never had to address any temporal aspects of congressional regulation. However, the premise of the government’s position—that most people will, at some point in the future consume health care—reveals that the individual mandate is even further removed from traditional exercises of Congress’s commerce power.

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Don’t want to buy peas, a Chevy Volt or an I Love Obama t-shirt? The feds can’t force you — even if some day you might need to do it anyway.

The plaintiffs acknowledged, “when the uninsured actually enter the stream of commerce and consume health care, Congress may regulate their activity at the point of consumption.”  However, that’s not what the mandate does.

Indeed, the language of the individual mandate does not truly regulate “how and when health care is paid for.” . . . It does not even require those who consume health care to pay for it with insurance when doing so. Instead, the language of the individual mandate in fact regulates a related, but different, subject matter: “when health insurance is purchased.” If an individual’s participation in the health care market is uncertain, their participation in the insurance market is even more so. In sum, the individual mandate is breathtaking in its expansive scope. It regulates those who have not entered the health care market at all. It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future. The government’s position 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. This theory affords no limiting principles in which to confine Congress’s enumerated power. (emphasis added)

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