Appeals Court Rules Against Obamacare Mandate

Monday, 15 Aug 2011 02:08 PM

By Betsy McCaughey

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On Friday, a federal appeals court ruled that the Obama health law’s requirement that every American buy health insurance is unconstitutional, bringing the challenge by 26 states closer to a U.S. Supreme Court showdown.

Judge Frank Hull, appointed by a Democratic president, and Judge Joel Dubina, appointed by a Republican president, gutted the Obama lawyer’s policy and legal arguments for compulsory insurance.

The Obama health law’s defenders claim that all Americans consume healthcare, so Congress can use its Commerce Clause power to force them to buy insurance in order to bar “free riding” the system.

The judges attacked that argument as a “convenient sleight of hand,” not the truth. It obscures what the law actually does.

The law forces healthy people to buy fully loaded health plans to subsidize insurance companies that, in turn, are compelled for the first time to provide unlimited coverage to people with chronic illnesses and pre-existing conditions.

In short, the law converts insurance companies into private tax collectors, collecting mandatory premiums from the healthy to pay for costly changes in the insurance laws.

Drawing on copious statistics, the judges show that “free riders” are largely illegal immigrants who are exempt from the mandate, and low-income Americans who will get coverage under the law’s vast expansion of Medicaid.

Most free riders, said the judges, can’t afford to pay premiums. In other words, the administration’s explanation for why the mandate is needed is pure fiction.

The real purpose of the mandate, said the judges, is to offset the costs of popular reforms like covering pre-existing conditions and removing lifetime caps on payouts “by compelling healthy Americans outside the insurance market to enter the private insurance market and buy insurers’ products. This starkly evinces how the act is forcing market entry by those outside the market.”

Forcing people to enter into commerce is different from regulating them once they voluntarily engage in it. Only the latter is constitutional.

When people don’t consume healthcare or insurance, that is “inactivity,” argued Judge Roger Vinson, the federal judge who ruled for the 26 states and against the Obama administration in a lower court. They are not in the marketplace. Vinson said if Congress has the power to compel an otherwise passive individual into a commercial transaction” there is no practical limit on Congress’ power.

Judges Hull and Dubina agreed with Vinson. But they made the additional argument that will likely be decisive when this controversy is decided by the U.S. Supreme Court in 2012.

Hull and Dubina demonstrated that the Obama administration contrived its commerce clause argument on a falsehood. The Obama lawyers tried to argue that healthcare consumption is “universal” and “inevitable.” They claimed that there is no such thing as being “inactive” in healthcare commerce, and that people without insurance are actively deciding to be “free riders.”

That’s a whopper. Half the population consumes little or no healthcare, according to the Agency for Healthcare Research and Quality, a federal agency. Yet the law would subject them to the same insurance mandate as those who consume healthcare.

“The government’s position,” said the judges, “amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life.” That, the judges concluded, is too much power.

Too much power, indeed.

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