Eleventh Circuit Court of Appeals Strikes Down Obamacare’s Individual Mandate

by Jonathan Ingram Illinois cannot afford Obamacare. The Medicaid expansion in Obamacare is expected to increase Illinois’s Medicaid spending to $10.2 billion by 2030. This represents a 77 percent increase over 2008 spending. Illinois already faces a spending crisis, particularly within Medicaid, and the Comptroller reports even longer delays for payments to doctors and hospitals treating Medicaid patients are...

by Jonathan Ingram

Illinois cannot afford Obamacare. The Medicaid expansion in Obamacare is expected to increase Illinois’s Medicaid spending to $10.2 billion by 2030. This represents a 77 percent increase over 2008 spending. Illinois already faces a spending crisis, particularly within Medicaid, and the Comptroller reports even longer delays for payments to doctors and hospitals treating Medicaid patients are expected.

But Obamacare is up against significant legal challenges.

Earlier today, the Eleventh Circuit Court of Appeals struck down the requirement in the Patient Protection and Affordable Care Act, commonly known as Obamacare, that required individuals to purchase health insurance or face paying a penalty to the IRS. Those challenging the law’s constitutionality in this case include attorneys general and governors from 26 states, the National Federation of Independent Business, and private citizens; the case is widely considered the largest legal threat to the mandate.

The court ruled that the individual mandate was an unprecedented expansion of federal power, a finding supported by both the Congressional Research Service and the Congressional Budget Officeprior to Obamacare’s enactment. Quoting the Supreme Court, the panel of judges found that the lack of other statutes embracing such a power typically “suggests an assumed absence of such power.”

The court further concluded that because individuals subject to the mandate “have not made a voluntary choice to enter the stream of commerce, but instead are having that choice imposed upon them by the federal government,” they are necessarily “removed from the traditional subjects of Congress’s commerce authority.” The court found that upholding legislation that permitted Congress to “regulate individuals outside the stream of commerce” on the premise that their decisions to avoid commerce “substantially affect interstate commerce” would fundamentally transform the federal government into one of general powers with unlimited scope, as any decision whether or not to purchase a good or service would, in the aggregate, substantially affect interstate commerce. Because the Constitution requires some form of judicially enforceable limitations, and because the government’s theory “affords no limiting principles” in which to confine Congressional power, the individual mandate was ruled unconstitutional.

The court did not invalidate the entire Act, however. Instead, it ruled that only the individual mandate was unconstitutional and that, because provisions are generally presumed severable and the law’s other provisions could legally operate without the mandate, the remaining provisions remained enforceable.

The states had also challenged the law on the theory that Obamacare’s expansion of the Medicaid program is unduly coercive. The Eleventh Circuit rejected this argument, finding that, because Congress would bear a much larger portion of the overall burden for newly eligible recipients, and because the Department of Health and Human Services has the discretion to determine whether to withhold all or only a portion of federal funds for noncompliance, the states had a choice of whether to participate in the expansion and were not coerced into the additional spending.

This is the second Court of Appeals decision to be released. In June, the Sixth Circuit Court of Appealsruled the law constitutional. The plaintiffs in that case have already sought review by the Supreme Court. Given the disagreement between the Circuits, the Supreme Court is virtually required to hear the appeal and because the Supreme Court is currently in recess, it is likely they will grant certiorari and hear the case next term, which begins in October.

Meanwhile, Obamacare remains unpopular among taxpayers. The most recent Rasmussen polltracking the issue found that 54 percent of likely voters favored its repeal, a position that has remained relatively constant since its enactment.

There are better ways to provide cheaper, high-quality healthcare to Illinois residents, from providing tax incentives for individual ownership of insurance policies, promoting interstate competition and risk pools for insurance companies, eliminating unnecessary coverage mandates, and reforming medical malpractice liability to reforming Medicaid into a sliding-scale premium-assistance program. There are patient-centered healthcare reform options that can simultaneously provide quality healthcare and constrain the current system’s complex and burdensome bureaucracy.

It’s time we use them.