President Barack Obama won the first round in the legal battle over the healthcare reform act after a federal judge in Michigan ruled that the law’s “individual mandate” requiring people to buy health insurance is constitutional.
The Thomas More Law Center and three individuals filed suit in the U.S. District Court for Eastern Michigan, arguing that the Patient Protection and Affordable Care Act is unconstitutional. The plaintiffs claimed that Congress lacks the authority to impose the individual mandate because of the Commerce Clause, which gives Congress the right to regulate interstate commerce. The plaintiffs also argued that the tax penalty for failing to buy insurance is unconstitutional because the money would go into the government’s general fund and could be used to fund abortions.
But Judge George Steeh ruled that “the Commerce Clause affords Congress broad power to regulate even purely local matters that have substantial economic effects,” finding that “by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for healthcare services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants,” according to court documents.
“In 2014, the Act will bar insurers from refusing to cover individuals with pre-existing conditions and from setting eligibility rules based on health status or claims experience. At that time, all Americans will be insurable. Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times,” Steeh wrote. “The uninsured, like plaintiffs, benefit from the ‘guaranteed issue’ provision in the Act, which enables them to become insured even when they are already sick. This benefit makes imposing the minimum coverage provision appropriate.”
And the argument that the tax penalty is unconstitutional fails because it’s not intended as a means to generate revenue but as an incentive to buy health insurance, Steeh ruled.
“Congress intended to increase the number of insureds and decrease the cost of health insurance by requiring individuals to maintain minimum essential coverage or face a penalty for failing to do so,” he wrote. “Because the ‘penalty’ is incidental to these purposes, plaintiffs’ challenge to the constitutionality of the penalty as an improperly apportioned direct tax is without merit.”
Robert Muise, Thomas More’s senior trial counsel, told the Washington Post that he plans to appeal Steeh’s decision.
“The main question is whether or not Congress has exceeded its authority under the commerce clause, and I like our chances before the U.S. Court of Appeals of the 6th Circuit,” Muise said.
“I think it’s important that this decision be reversed to prevent Congress from overreaching the way it did in passing the original mandate,” Muise told the Detroit Free Press.
The Michigan case is one of 15 or 20 filed around the country seeking to block the healthcare reform act or repeal it altogether.