The Eleventh Circuit Court of Appeals today affirmed a lower court ruling that the requirement in the federal health care reform law that individuals buy health insurance or face penalties is unconstitutional. It also upheld the lower court’s rejection of an argument by Florida and 25 other states that the law’s expansion of Medicaid is “coercive” to the states.

Today’s ruling holds that the rest of the law can be allowed to stand; the lower court held that the mandate was so integral that the rest of the law should be struck down. Ezra Klein of The Washington Post takes a look at what might happen if, when all the rulings shake out, the mandate is struck down, but the rest of the law is upheld.

The ultimate decision on the constitutionality of the health care reform law will likely come from the Supreme Court. A guide to all the constitutional challenges to the law can be found here.

Fundamentally, the ruling on the so-called individual mandate was about the scope of the federal government’s power, which is bound by the Constitution. The Constitution gives Congress the power to regulate commerce between the states, and one of the central questions is whether that power extends to a decision not to buy insurance.

The full ruling is below. On page 107, the court notes how the mandate stretches the constitutional limits of Congress’ power to regulate commerce:

The plaintiffs point out that by choosing not to purchase insurance, the uninsured are outside the stream of commerce. Indeed, the nature of the conduct is marked by the absence of a commercial transaction. Since they are not engaged in commerce, or activities associated with commerce, they cannot be regulated pursuant to the Commerce Clause. The plaintiffs emphasize that, in 220 years of constitutional history, Congress has never exercised its commerce power in this manner.

The court concludes, on page 171:

The federal government’s assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.

The court also held that the states are not “coerced” to accept the law’s expansion of Medicaid, in part because “the federal government will bear nearly all of the costs associated with the expansion”:

The states will only have to pay incidental administrative costs associated with the expansion until 2016; after which, they will bear an increasing percentage of the cost, capping at 10% in 2020. If states bear little of the cost of expansion, the idea that states are being coerced into spending money in an ever-growing program seems to us to be “more rhetoric than fact.”

Finally, we note that while the state plaintiffs vociferously argue that states who choose not to participate in the expansion will lose all of their Medicaid funding, nothing in the Medicaid Act states that this is a foregone conclusion. Indeed, the Medicaid Act provides [the Department of Health and Human Services] with the discretion to withhold all or merely a portion of funding from a noncompliant state.

Elevent Circuit HCR Ruling

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