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December 15, 2010

Goodbye Individual Mandate, Hello Supreme Court

by Michael J. Mohr Esq.

The good news for the health care reform enthusiasts is that Judge Henry Hudson of the U.S. District Court for the Eastern District of Virginia declined to declare the Patient Protection and Affordable Care Act unconstitutional in its entirety.  The bad news is that Judge Hudson struck down the Minimum Essential Coverage Provision, or “individual mandate”, requiring most Americans to purchase health insurance by 2014 or pay a penalty administered through the Internal Revenue Code.  Although the remainder of the law was left intact, the likelihood of successful implementation of a number of other provisions without the insurance requirement is questionable.

Reasoning that a decision not to purchase a product is not an economic activity, Judge Hudson concluded that Congress lacks the power under the Commerce Clause, or associated Necessary and Proper Clause, to compel an individual to engage in a private commercial transaction – here, the purchase of health insurance.  Further, the “penalty” to be imposed on individuals who fail to obtain health insurance is not a bona fide revenue raising measure within Congressional power under the General Welfare Clause.

Judge Hudson’s ruling conflicts with two recent opinions of federal judges in Michigan and Virginia that found the law constitutional, setting up a likely review by the U.S. Supreme Court to determine whether this provision exceeds the constitutional boundaries of congressional power.  The law shall remain in effect while appeals are heard.

The entire opinion can be found here.

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