Health-care reform law set back, setting stage for Supreme Court showdown

A federal appeals court rejects the individual mandate, the crux of Obama's health-care reform. With another appeals court having already upheld the law, a Supreme Court showdown is far more likely.

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President Barack Obama signs the health care bill in the East Room of the White House in Washington, March 23, 2010. The bill has been rejected by a federal appeals court, and may be sent to the Supreme Court.

J. Scott Applewhite/AP/File

The federal appeals court decision on Friday striking down the centerpiece of President Obama’s health-care reform law, moves the country one step closer to a potential constitutional showdown at the US Supreme Court over the scope of federal power.

A panel of the Eleventh US Circuit Court of Appeals, voting 2 to 1, ruled that Congress exceeded its authority in the health-care law by requiring every American to purchase a government-approved level of health insurance or face a penalty.

The decision by the Atlanta-based appeals court is in direct opposition to a 2-to-1 decision announced June 29 by the Cincinnati-based Sixth US Circuit Court of Appeals.

That appeals court panel upheld the so-called individual mandate provision of the Affordable Care Act (ACA), ruling that Congress’s powers under the Constitution’s commerce clause were broad enough to order individuals to purchase and maintain private insurance coverage.

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Constitutional scholars are awaiting a decision on the same issue from the Richmond-based Fourth US Circuit Court of Appeals.

But the fact that two of the three appeals courts have ruled and reached different conclusions significantly increases the likelihood that the Supreme Court will agree to examine the issue, legal analysts say.

In its ruling on Friday, the 11^th Circuit panel struck down the individual mandate, but declined to follow the lead of a lower court judge in Florida, who ruled the entire ACA null and void.

Instead, the appeals court said it would allow the rest of the reform law to remain undisturbed. That action preserves features of the ACA, including the directive that insurance companies may not refuse coverage because of preexisting medical conditions and a measure that allows parents to continue to insure their children into their 20s.

Friday’s decision stems from a lawsuit filed on behalf of 26 states and a business group challenging the constitutionality of the ACA.

The court rejected an argument by the states that the expansion of Medicaid under the ACA, which requires the states to administer a larger program, amounts to unconstitutional coercion of the states by the federal government. The panel also rejected the Obama administration’s argument that the ACA should be upheld under the government’s taxing powers. The court said the punishment assessed for noncompliance with the insurance mandate was a penalty rather than a tax.

But the big ticket portion of the appeal related to the constitutionality of the individual mandate.

“The federal government’s assertion of power, under the commerce clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure,” Chief Judge Joel Dubina and Judge Frank Hull wrote in the jointly-authored opinion.

“Although courts must give due consideration to the policy choices of the political branches, the judiciary owes its ultimate deference to the Constitution,” they wrote.

Some analysts noted that the majority included a judge appointed by a Republican president and a judge appointed by a Democratic president. Chief Judge Dubina was appointed by George H. W. Bush, and Judge Hull was appointed by Bill Clinton.