• The Sixth, Eleventh and Fourth Circuits Split Over Constitutionality of Health Care Reform
  • September 16, 2011 | Author: Christopher Schneider
  • Law Firm: Miller Johnson - Grand Rapids Office
  • Two federal courts of appeals recently reached completely opposite conclusions about the constitutionality of the federal Health Care Reform law. The two courts, the U.S. Court of Appeals for the Sixth Circuit and the U.S. Court of Appeals for the Eleventh Circuit, disagreed about whether Health Care Reform’s individual mandate is constitutional. A third court, the U.S. Court of Appeals for the Fourth Circuit also decided two Health Care Reform cases, but it did not rule on the constitutionality of the individual mandate. The individual mandate will require nearly every American to have health insurance beginning in 2014.

    The Sixth Circuit's Decision: Health Care Reform is Constitutional

    The Sixth Circuit, whose jurisdiction includes Michigan, was the first federal court of appeals to address Health Care Reform’s constitutionality. The case, Thomas More Law Center, et al. v. Obama, et al., was brought by a public interest law firm and four individuals. They argued that the individual mandate was unconstitutional because Congress lacks the power to force people to purchase health care coverage.

    In a 2-1 decision, the Sixth Circuit disagreed. It held that the individual mandate "falls within Congress's power to regulate activities that substantially affect interstate commerce." The court reasoned that the individual mandate regulates economic activity—self-insuring for health care costs—that Congress could rationally believe substantially affects interstate commerce. The court also reasoned that even if self-insuring for health care costs was not economic activity, the individual mandate was still constitutional because eliminating it would undermine Congress's broader regulation of health care and health care coverage.

    The Eleventh Circuit's Decision: the Individual Mandate is Unconstitutional

    By contrast, in a different 2-1 opinion, the Eleventh Circuit held the individual mandate unconstitutional. The case, Florida v. HHS, was brought by twenty-six states, including Michigan, and a prior Health Care Reform Priority Alert "Florida Judge Finds Entire Health Care Reform Bill Unconstitutional" addressed the lower court's decision.

    The Eleventh Circuit explained that the provision went beyond the Commerce Clause by requiring everyone, including healthy people who do not use health care services, to purchase health insurance. According to the court, "Congress cannot ... 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 court also held that the monetary sanctions for failing to follow the individual mandate are unconstitutional penalties, not legitimate taxes.

    Significantly, the Eleventh Circuit's decision did not invalidate all of Health Care Reform; it only held the individual mandate unconstitutional.

    The Fourth Circuit's decision: standing

    On September 8, 2011, the Fourth Circuit dismissed two challenges to Health Care Reform, because it concluded that the plantiffs lacked legal standing to sue. Although the court did not decide the constitutionality of the individual mandate, two of three judges on the panel acknowledged that they would have upheld Health Care Reform, if they had been able to rule on the substance of the case.

    What's Next?

    These rulings do not end the court battles over Health Care Reform, which will likely continue into 2012. For now, individuals, employers, and health plans should expect Health Care Reform to be implemented largely as planned.

    However, these rulings do mean that the Supreme Court will almost certainly have to decide Health Care Reform's constitutionality. With the first three decisions from the federal courts of appeals in conflict with one another, the nation's highest court will ultimately have to decide the issue once and for all.