A number of legal challenges have been filed in various federal courts since the health care reform law was passed in March 2010. While some of the challenges have been decided based on procedural grounds, the main substantive controversy has been whether Congress had the constitutional authority to pass the individual mandate under health care reform. Beginning in 2014, the individual mandate generally requires individuals to purchase health insurance or pay a penalty. The individual mandate is a key component of the health care reform law. Health care policy experts have suggested that, without the individual mandate, health care reform’s other insurance market reforms would be difficult to implement.
So far, there have been at least 30 lawsuits filed by state governments, private citizens and others seeking to overturn the health care reform law. The court rulings, to date, are split. Some courts have upheld the law as constitutional, while others have concluded that a portion of the law, or the entire law, is unconstitutional. For example, one federal district court in Virginia ruled that the individual mandate portion of the law is unconstitutional. Other federal district courts, including one in Michigan and another Virginia court, found that the law is constitutional.
In January 2011, a federal district court in Florida ruled that Congress does not have the authority to require individuals to buy insurance. The Florida district court went further than others that have reviewed the law, holding that the individual mandate cannot be separated from the rest of the law, so the entire statute is invalid. The Florida court issued a stay of its decision while the case proceeds through the appeals process.
The 4th, 6th and 11th U.S. Circuit Courts of Appeal have heard appeals of health care reform challenges, and challenges are currently pending before other U.S. Courts of Appeals. In June 2011, the 6th Circuit Court of Appeals upheld the constitutionality of the individual mandate. The 4thCircuit Court of Appeals is expected to issue its decision soon. The 11th Circuit appeal has received the most attention because it involves the controversial Florida decision invalidating the entire law and includes Republican attorneys general and governors from 26 states.
On Aug. 12, 2011, the 11th Circuit Court of Appeals ruled that the health care reform law’s individual mandate is unconstitutional, upholding the Florida district court decision. However, the Court of Appeals overturned Florida’s decision to invalidate the entire law, preferring to strike only the individual mandate. The Court of Appeals stated that Congress violated the U.S. Constitution by passing legislation that would force all Americans to buy a product or pay a penalty. The opinion said Congress has broad power to deal with the problems of the uninsured, "but what Congress cannot do...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."
Now that two federal appeals courts have reached differing conclusions on the constitutionality of the health care reform law, the issue may proceed to the U.S. Supreme Court. The Justice Department will have 90 days to appeal to the Supreme Court or ask the entire 11th Circuit to review the ruling. The decision of the 6th Circuit Court of Appeals, which upheld the individual mandate as constitutional, has already been appealed to the Supreme Court. It is likely that the constitutionality of the health care reform law will ultimately be settled by the Supreme Court.
As your Health Insurance Experts, GDI Insurance Agency, Inc. will continue to monitor the status of the health care reform law and its impact on you and your employees.
If you find your Health Insurance a Challenge, please call in to Ask The Experts at GDI Insurance in Turlock, CA at 888-991-2929.
Matthew Davis MBA, AAI