On December 13, 2010, Judge Henry E. Hudson of the U.S. District
Court for the Eastern District of Virginia held that a key portion
of the Patient Protection and Affordable Care Act
("PPACA"), passed by Congress in late 2009 and signed
into law by President Obama on March 23, 2010, was
unconstitutional. The challenge to the law was made on behalf of
Virginia by its Attorney General and claimed that the minimum
essential coverage provision contained in the law was
unconstitutional. Under Section 1501 of PPACA, every U.S. citizen,
other than those falling within certain exceptions, would be
required to maintain a minimum level of health insurance beginning
in 2014 or pay a fine included in the taxpayer's annual tax
return. Virginia's challenge sought to bar the Federal
Government from enforcing PPACA's minimum essential coverage
provision on the grounds that it exceeded Congress' powers
under the Commerce Clause of the U.S. Constitution.
In a 42-page opinion, Judge Hudson agreed with Virginia, holding:
"Neither the Supreme Court nor any federal circuit court of
appeals has extended Commerce Clause powers to compel an individual
to involuntarily enter the stream of commerce by purchasing a
commodity in the private market." Attorneys for the Department
of Health and Human Services argued that the decision of an
individual not to obtain health insurance would undoubtedly affect
interstate commerce at some point in the future when the individual
needed medical care and was thus within the powers of Congress to
regulate under the Commerce Clause. Judge Hudson disagreed,
however, finding that individuals who do not to purchase health
insurance were actually abstaining from economic activity, rather
than voluntarily participating in the stream of interstate
commerce, and thus "an individual's personal decision to
purchase - or decline to purchase - health insurance from a private
provider is beyond the historical reach of the Commerce
Clause."
Although Judge Hudson found that PPACA's minimum essential
coverage provision went beyond Congress' powers, he stopped
short of invalidating the law in its entirety, as requested by
Virginia, and instead found that the minimum essential coverage
provision was severable from the remaining provisions, leaving the
law's remaining provisions in place for now. How such
provisions would operate without the minimum essential coverage
provision in place remains to be seen, however, as provisions such
as those preventing insurers from denying coverage to those with
pre-existing conditions were intended by Congress to act in tandem
with the minimum essential coverage provision, in order to prevent
individuals from abusing the system by refusing to obtain health
insurance until after they already had a serious health problem and
then forcing insurers to cover them under PPACA.
Judge Hudson's opinion is the first to find that certain
provisions of PPACA are unconstitutional and is in conflict with
two other opinions previously decided by federal judges in the
Eastern District of Michigan and the Western District of Virginia.
Appeals of those cases are currently Pending in the Sixth Circuit
and Fourth Circuit Courts of Appeals, respectively. Nearly two
dozen other lawsuits are also currently pending challenging
portions of PPACA, including a federal case in Florida that has
been joined by twenty states. Hearings in that case are scheduled
to begin Thursday, December 16, but regardless of the ruling, the
ultimate decision as to the constitutionality of the PPACA is
likely to rest with the United States Supreme Court.
Dinsmore & Shohl's Health Care Practice Group will continue
to keep you updated as these matters further develop.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.