Recent Updates on Challenges to the Health Care Reform

By on February 4, 2011

by Amy M. Gordon and Michael T. Graham

On January 31, 2011, another Federal district court judge opined on the constitutionality of the controversial Health Care Reform legislation.  In Florida v. U.S. Department of Health and Human Services, Judge Vinson of the U.S. District Court for the Northern District of Florida, in a case brought by governors and attorneys general from 26 states, held that the individual insurance mandate provisions in the legislation that require all persons to purchase health care insurance were unconstitutional.

In his opinion, Judge Vinson found that the individual insurance mandate exceeded the regulatory powers granted to Congress under the U.S. Constitution’s Commerce Clause. Judge Vinson held that the penalties associated with not purchasing health care insurance went beyond Congress’ broad authority to make laws that are “necessary and proper” to carrying out its designated responsibilities.  He found that if Congress could regulate an individual’s inactivity through the Commerce Clause, then Congress could regulate virtually any kind of activity or inactivity with almost unlimited power.  He concluded that if Congress could penalize an individual for deciding not to engage in certain commerce, the enumeration of individual rights in the Constitution would have been made in vain.  In ruling on a second claim, Judge Vinson dismissed a claim that the legislation violated state sovereignty rights by requiring states to pay for a fractional share of the planned expansion of Medicaid.

Judge Vinson’s decision updates the federal judicial scoreboard on whether Health Care Reform is or is not unconstitutional at 2 and 2.  However, unlike the Virginia federal court that also ruled against the individual mandate provision but upheld the rest of the legislation, Judge Vinson went further, concluding that the individual mandate was so inextricably connected to the other provisions in the legislation that its unconstitutionality required that the entire legislation be invalidated.  Ultimately, while this ruling comes in what may be the most prominent challenge to Health Care Reform given that the case was filed by many states’ governors and attorneys general, it will merely become one of many opinions on the individual mandate’s constitutionality given that there are over 20 pending cases challenging the legislation. 

On the Legislative front, on February 2, 2011, Senate Republicans were defeated by a vote of 51-47 in their effort to repeal Health Care Reform. 

As of now, these two events will have little impact on employers and their group health plans.  We recommend a wait and see approach.  Senate Republican leaders expressed that they were not surprised that this effort was defeated and that votes were cast generally along party lines.  As for the Florida court decision, Judge Vinson declined to require enforcement of his ruling pending an expected appeal by the Obama administration. 

Because the individual mandate provision does not take effect until 2014, it is likely that the Federal courts will continue to provide differing opinions until the issues is settled by the Supreme Court.  In fact after the Senate defeat, Democratic Senator Bill Nelson of Florida announced he would file legislation urging the justices to act quickly.  McDermott Will & Emery will continue to monitor this important issue as it develops.  If you have any questions, please contact us.




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