Health insurance mandate clears legal hurdle

Plaintiffs in Michigan plan to appeal the federal ruling on the minimum coverage requirement. Cases challenging the law are pending in other jurisdictions.

By Chris Silva — Posted Oct. 18, 2010

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A federal judge in Michigan has rejected a plaintiff's request for a preliminary injunction that sought to strike down the health system reform law enacted in March.

The Oct. 7 decision from Judge George Caram Steeh in the U.S. District Court for the Eastern District of Michigan in Detroit is believed to be the first federal ruling on a component of the health reform law.

The Thomas More Law Center, a nonprofit Christian legal advocacy group in Ann Arbor, Mich., sued the government on behalf of itself, four individuals who are Michigan residents and federal taxpayers. The four individuals said they do not have private health insurance and objected "to being compelled by the federal government to purchase health care coverage."

The center argued that the U.S. Constitution's Commerce Clause didn't give Congress the authority to pass the health reform law. Moreover, it said the law's financial penalty for those who don't purchase minimum essential coverage beginning in 2014 would be an unconstitutional tax.

But Steeh rejected that argument and denied the plaintiffs' motion asking for a preliminary injunction. He said the government has power under the Commerce Clause to enact the law, ruling that the individual mandate addresses cost-shifting in the health care market and functions "as an essential part of a comprehensive regulatory scheme."

"The prospect of driving the insurance market into extinction led Congress to find that the minimum coverage provision was essential to the larger regulatory scheme of the act," the judge wrote. "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. As a result, the most costly individuals would be in the insurance system and the least costly would be outside it. In turn, this would aggravate current problems with cost-shifting and lead to even higher premiums."

The Thomas More Law Center plans to appeal. "Obamacare is one of the most oppressive measures in the history of our nation," said Richard Thompson, president and chief counsel of the center. "And it was passed by Congress despite overwhelming opposition of the American people. It was not about reforming health care, but government seizure of unprecedented power over our lives."

Thompson said the center is troubled about the agents that some conservative groups claim are supposed to be added to the Internal Revenue Service to monitor tax records and determine compliance with the individual mandate. In addition, the organization says it is concerned that any penalties collected as a result of noncompliance with the rule could go toward funding abortions, even though the health reform law bars such payments.

Some attorneys familiar with the case said they had anticipated the ruling handed down by Steeh.

"This decision is not surprising, given decades of law that has determined the Commerce Clause does not prohibit the government from regulating this type of activity," said Dan Schulte, general counsel to the Michigan State Medical Society.

Two other lawsuits also are challenging the reform law.

In Florida, a federal judge partially upheld a 20-state lawsuit that challenges the constitutionality of the health reform law. The Oct. 14 ruling, by U.S. District Judge Roger Vinson of the Northern District of Florida, means that attorneys representing the states can question if the reform law's requirement for individuals to have health insurance is an unconstitutional extension of federal power and if states should be forced to pay for part of the cost of expanding Medicaid to 133% of the federal poverty level. A summary judgment hearing has been set for Dec. 16.

In a separate lawsuit filed in the U.S. District Court for the Eastern District of Virginia, a judge was scheduled to hear arguments on Oct. 18 on whether the state's lawsuit challenging the reform law should be allowed to go forward.

An integral component of the health reform law signed into law March 23 is an individual mandate that requires every U.S. citizen -- other than those falling within specified exceptions -- to maintain minimum essential coverage for health care for each month, beginning in 2014.

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Case at a glance

Can the federal government require that all U.S. citizens have health insurance?

A federal court says yes.

Impact: Plaintiffs claimed that the health reform law's mandate to purchase health insurance is unconstitutional under the Commerce Clause. The judge ruled that the clause gives the federal government the right to require insurance. Every citizen must have minimum essential coverage beginning in 2014.

Thomas More Law Center, et al v. Barack Hussein Obama, U.S. District Court, Eastern District of Michigan, Southern Division

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