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RICHMOND, VA - A federal court ruled Monday that a central plank of the health law violates the Constitution, dealing the biggest setback yet to the Obama administration's signature legislative accomplishment.
A federal judge ruled today that Congress exceeded its "constitutional boundaries" when it required most Americans to carry health insurance or pay a fine. The Journal's Peter Landers and Simon Constable discuss the potential fallout.
In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law's requirement that most Americans carry insurance or pay a penalty "exceeds the constitutional boundaries of congressional power."
The individual mandate "would invite unbridled exercise of federal police powers," wrote Judge Hudson, of the Eastern District of Virginia. "At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it's about an individual's right to choose to participate."
The lawsuit, brought by Virginia Attorney General Ken Cuccinelli, is the first court ruling against the law since President Barack Obama signed it in March. More than 20 federal lawsuits have been filed against the overhaul, and judges in two of those cases ruled in favor of the Obama administration.
While the ruling creates a headache for the law's supporters, it doesn't mean states or the federal government must stop implementing the law.
Judge Hudson didn't grant the plaintiffs' request for an immediate nationwide injunction against the entire law or against the requirement that most Americans carry insurance. That requirement, known as the individual mandate, begins in 2014. The judge also said his ruling only applies to the individual mandate and the provisions of the law that are directly dependent on it.
"At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health coverage -- it's about an individual's right to choose to participate."
The Supreme Court is expected ultimately to settle the issue after the Virginia case and similar challenges wind their way through the courts.
Administration officials say the ruling amounts to an attack on one of the law's most popular provisions, the ban on insurers denying coverage to people with pre-existing health conditions. That piece of the law can't work unless coupled with a requirement that nearly all Americans carry insurance, they say.
"We are disappointed in today's ruling but continue to believe—as other federal courts in Virginia and Michigan have found—that the Affordable Care Act is constitutional," said Justice Department spokeswoman Tracy Schmaler. "There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law, and we are confident that we will ultimately prevail."
The administration has downplayed the outcome of the challenge by Mr. Cuccinelli, a Republican, saying it received outsize attention because of his visibility.
For opponents of the law, Monday's ruling is the first victory in a multifaceted attack designed to help Republicans take back the White House in 2012. Republicans see the court battle as one way to express their opposition to the law.
The Obama administration argues that since all Americans at some point get health-care services, a requirement to carry health insurance is simply a way of regulating how consumers pay for their care. The Constitution gives Congress the power to regulate interstate commerce.
In his ruling, Judge Hudson wrote that the Interstate Commerce Clause wasn't sufficient for Congress to establish the individual mandate. He said Congress lacked precedent for "regulation of a person's decision not to purchase a product, notwithstanding its effect on interstate commerce or role in a global regulatory scheme."
Judge Hudson took some jabs at the law. In discussing whether Congress intended the law to stand if the mandate weren't included, he wrote that it was difficult to assess "given the haste with which the final version of the 2,700-page bill was rushed to the floor for a Christmas Eve vote."
He said the court was finding invalid only the part of the law that establishes the individual mandate, and any directly dependent provisions that refer to that part.
Exactly what that applies to is unclear.
The Obama administration says that without the individual mandate, it could no longer require insurers to provide coverage to people with pre-existing conditions because that would create an unhealthy pool of consumers and drive up insurance prices for everyone.
But the administration argues that, should the mandate ultimately be struck down, courts should uphold most of the rest of the law. That would include the expansion of Medicaid to 16 million Americans, tax subsidies to help lower earners buy insurance and the creation of new exchanges where consumers can comparison shop for policies.
The health overhaul is designed to expand insurance to 32 million Americans. Without the requirement to carry insurance, the Obama administration predicts, the law would leave an additional 16 million Americans uninsured.
States and companies in the health industry say they are forging ahead with responding to the law, and Monday's decision is unlikely to change those plans.
"We don't anticipate an adverse ruling at the district-court level in Virginia or in any other case to materially impede implementation of the act across the full range of its many provisions," an Obama administration official said.
A federal judge ruled today that Congress exceeded its "constitutional boundaries" when it required most Americans to carry health insurance or pay a fine. The Journal's Peter Landers and Simon Constable discuss the potential fallout.
In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law's requirement that most Americans carry insurance or pay a penalty "exceeds the constitutional boundaries of congressional power."
The individual mandate "would invite unbridled exercise of federal police powers," wrote Judge Hudson, of the Eastern District of Virginia. "At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it's about an individual's right to choose to participate."
The lawsuit, brought by Virginia Attorney General Ken Cuccinelli, is the first court ruling against the law since President Barack Obama signed it in March. More than 20 federal lawsuits have been filed against the overhaul, and judges in two of those cases ruled in favor of the Obama administration.
While the ruling creates a headache for the law's supporters, it doesn't mean states or the federal government must stop implementing the law.
Judge Hudson didn't grant the plaintiffs' request for an immediate nationwide injunction against the entire law or against the requirement that most Americans carry insurance. That requirement, known as the individual mandate, begins in 2014. The judge also said his ruling only applies to the individual mandate and the provisions of the law that are directly dependent on it.
"At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health coverage -- it's about an individual's right to choose to participate."
The Supreme Court is expected ultimately to settle the issue after the Virginia case and similar challenges wind their way through the courts.
Administration officials say the ruling amounts to an attack on one of the law's most popular provisions, the ban on insurers denying coverage to people with pre-existing health conditions. That piece of the law can't work unless coupled with a requirement that nearly all Americans carry insurance, they say.
"We are disappointed in today's ruling but continue to believe—as other federal courts in Virginia and Michigan have found—that the Affordable Care Act is constitutional," said Justice Department spokeswoman Tracy Schmaler. "There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law, and we are confident that we will ultimately prevail."
The administration has downplayed the outcome of the challenge by Mr. Cuccinelli, a Republican, saying it received outsize attention because of his visibility.
For opponents of the law, Monday's ruling is the first victory in a multifaceted attack designed to help Republicans take back the White House in 2012. Republicans see the court battle as one way to express their opposition to the law.
The Obama administration argues that since all Americans at some point get health-care services, a requirement to carry health insurance is simply a way of regulating how consumers pay for their care. The Constitution gives Congress the power to regulate interstate commerce.
In his ruling, Judge Hudson wrote that the Interstate Commerce Clause wasn't sufficient for Congress to establish the individual mandate. He said Congress lacked precedent for "regulation of a person's decision not to purchase a product, notwithstanding its effect on interstate commerce or role in a global regulatory scheme."
Judge Hudson took some jabs at the law. In discussing whether Congress intended the law to stand if the mandate weren't included, he wrote that it was difficult to assess "given the haste with which the final version of the 2,700-page bill was rushed to the floor for a Christmas Eve vote."
He said the court was finding invalid only the part of the law that establishes the individual mandate, and any directly dependent provisions that refer to that part.
Exactly what that applies to is unclear.
The Obama administration says that without the individual mandate, it could no longer require insurers to provide coverage to people with pre-existing conditions because that would create an unhealthy pool of consumers and drive up insurance prices for everyone.
But the administration argues that, should the mandate ultimately be struck down, courts should uphold most of the rest of the law. That would include the expansion of Medicaid to 16 million Americans, tax subsidies to help lower earners buy insurance and the creation of new exchanges where consumers can comparison shop for policies.
The health overhaul is designed to expand insurance to 32 million Americans. Without the requirement to carry insurance, the Obama administration predicts, the law would leave an additional 16 million Americans uninsured.
States and companies in the health industry say they are forging ahead with responding to the law, and Monday's decision is unlikely to change those plans.
"We don't anticipate an adverse ruling at the district-court level in Virginia or in any other case to materially impede implementation of the act across the full range of its many provisions," an Obama administration official said.
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