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Second ruling upholds health clause

A federal judge, giving the Obama Administration its second victory in court on the hotly disputed new law that mandates that nearly everyone have health insurance coverage by 2014, ruled on Tuesday that Congress had the constitutional authority to adopt that command.   U.S. District Judge Norman K. Moon of Lynchburg, Va., found that Congress had properly concluded “that individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market.”  The 54-page opinion is here.

Judge Moon also upheld, under Congress’s Commerce Clause power, the new law’s mandate that large employers — those with 50 or more full-time workers — provide adequate health insurance for their employees by 2014.

Although the new decision echoes an earlier one by a federal judge in Michigan, the insurance mandate is under challenge in other courts, and two federal judges — in Virginia and Florida — have issued preliminary rulings that expressed strong doubt about whether Congress had the authority to impose that requirement.  There are also discussions among Republicans, following their congressional election victories last month, of trying to repeal that mandate.  If a repeal does not go through, or does not survive a likely presidential veto, the constitutional issue seems likely to be headed ultimately to the Supreme Court.

Judge Moon, while ruling in the Administration’s favor on that point, rejected two other arguments that government lawyers have made in cases across the country in defending the new law: first, that no one has legal standing to bring challenges at this point to the 2014 mandates, and second that any such challenge is premature.   The judge concluded that the two individuals and Liberty University, a Christian university in Lynchburg in the case as an employer, would have to start making financial plans soon to satisfy the mandate, so they were entitled to sue now.

Those losses, however, were no doubt of far less concern in this case because Judge Moon went on to uphold the mandates for individual and employer insurance coverage, rejecting the challengers’ basic argument that Congress had no authority to order someone to give up their own desire not to buy a commercial product and force them into a market they do not want to enter.

“Regardless of whether one relies on an insurance policy, one’s savings, or the backstop of free or reduced-cost emergency room services,” Judge Moon wrote, “one has made a choice regarding the method of payment for the health care services one expects to receive.  Far from ‘inactivity,’ by choosing to forgo insurance, [individuals] are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance….As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.”

Upholding the law’s mandate that large employers provide minimum health coverage for those on their payrolls, Judge Moon likened that to the decades-old federal law that requires employers to provide a minimum wage.  “The opportunity provided to an employee to enroll in an employer-sponsored health care plan is a valuable benefit offered in exchange for the employee’s labor, much like a wage or salary,” the judge wrote.

The judge also rejected a challenge under the states’ rights Tenth Amendment to the new law’s option that allows states to set up health insurance “exchanges” or markets within their own borders.  The law does not coerce states to do so, the judge noted.   Moon also found no Tenth Amendment violation in the individual and employer insurance mandates.

In other parts of his decision, the Virginia judge rejected claims that the exemptions to the insurance mandate for some who have religious objections violated the Constitution’s religion clauses.   Moon also turned aside claims that the insurance mandates in the law burden religious practice, under either the Constitution or the Religious Freedom Restoration Act.  And he rejected claims of unconstitutional discrimination, interference with free speech and association, and imposition of a tax that is not spread equally across the nation.

Recommended Citation: Lyle Denniston, Second ruling upholds health clause, SCOTUSblog (Dec. 1, 2010, 11:49 AM),