Employee Benefits Compliance

Federal Court in Florida Declares Individual Mandate Unconstitutional and Voids Entire HCR Act

US District Court Judge Vinson in Florida held that PPACA’s “individual mandate is unconstitutional and not severable [from the rest of the Act, and] the entire Act must be declared void.”  (The case is State of Florida et al v US Dept of HHS, and the ruling was issued January 31, 2011.)
This does not mean health care reform is dead, however.  The Justice Department responded immediately, announcing its intention to appeal the decision to the US (11th Circuit) Court of Appeals in Atlanta.

It is generally expected that the Obama administration will continue to issue regulations and guidance to implement the current HCR Act, since Judge Vinson did not grant plaintiffs’ request to suspend the law pending further appeals.  Vinson also rejected plaintiffs’ other claim against the Act, that it violates state sovereignty because it expands the Medicaid program in 2014 and mandates states to pay part of the expanded cost, to provide health care to low-income individuals.

This case is the best-known and most closely-followed of the numerous cases challenging the HCR Act, since the plaintiffs are the state of Florida and 25 other states.

As Kaiser Health News and several other prominent news sources noted, in the court decisions issued so far on the HCR Act, two Democrat-appointed judges have upheld the Act, and two Republican-appointed judges have held it unconstitutional.  The case ultimately will be decided by the US Supreme Court, (many analysts believe that will be in 2012), unless it is repealed by Congress before it reaches the US Supreme Court.   The US Supreme Court is currently comprised of 5 Republican-appointed judges and 4 Democrat-appointed judges, so if the case goes to the US Supreme Court, it’s sure to be a close decision.

Additional Details on the Case

Today’s ruling held the individual mandate unconstitutional under the Commerce Clause of the US Constitution, which allows Congress to regulate activities that substantially affect interstate commerce.  Plaintiffs (Florida plus 25 other states) argued that the individual mandate exceeds Congressional power under the Commerce Clause because it attempts to regulate the absence of commercial activity by individuals – i.e., the failure to purchase health insurance.  Plaintiffs argued that Congress does not have the power to regulate inactivity merely because it affects interstate commerce.  Government attorneys argued in favor of the individual mandate on the grounds that in the aggregate, individuals who fail to purchase health insurance actually do consume tens of billions of dollars of health care each year, which significantly affects interstate commerce because society as a whole pays the cost of this uncompensated care.

The 26 states that are plaintiffs in the case are:  Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.