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Taking Obamacare to Court

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Even before President Obama’s ink was dry from signing the Patient Protection and Affordable Care Act (PPACA) into law, opponents gave notice that they would challenge the constitutionality of the law in the courts. The most recent challenge, on July 26th, a suit was filed by a private citizen, Matt Sissel.

What will come of the recent constitutional challenge to the Patient Protection and Affordable Care Act?

Even before President Obama’s ink was dry from signing the Patient Protection and Affordable Care Act (PPACA) into law, opponents gave notice that they would challenge the constitutionality of the law in the courts. The most recent challenge, on July 26th, a suit was filed by a private citizen, Matt Sissel. The defendants in this suit are two well known individuals: Kathleen Sebelius, Director, Health and Human Services and Timothy Geithner, United States Secretary of the Treasury.

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The foundation for Mr. Sissel’s suit is that the Act unlawfully mandates that a private citizen purchase a product, in this case insurance. As stated in the suit, “The Act requires that all nonexempt citizens and legal residents in the United States either obtain health insurance coverage for themselves and their dependents, or face stiff civil penalties (Individual Mandate).” Therefore, the plaintiff asserts that “the Individual Mandate violates the United States Constitution, because it exceeds Congress’s authority under the Commerce Clause.” (Case 1 :lo-cv-01263-RJL). The law identifies this health insurance coverage as those policies that are “qualified” by the Secretary of Health and Human Services. Further, the penalties for not purchasing such insurance as the higher of, 2.5% of the taxpayers annual income or $695 per family member to a total of $2,085 annually. These penalties would be collected by the IRS. Thus the reason for naming Ms. Sebelius and Mr. Geithner. If Mr. Sissel hasn’t had his taxes audited recently, he’d better look out!

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The stroke of a pen. Does the PPACA violate your constitutional rights?

The Commerce Clause, more accurately Article 1, Section 8, Clause 3 of the US Constitution is what is known as “an enumerated power of the Congress”. In other words, it is a specifically stated power of Congress. As such, it is a very broad power allowing nearly any action that would impact trade with foreign nations, Indian tribes and most critical to this conversation, interstate commerce. This last power gives Congress the power to regulate all commercial trade, business, movement of goods or money, or transportation from one state to another. When an enumerated power is so broad, the hurdle to overturn an Act covered under that power is a substantial one. In analyzing the powers of the government to restrict a citizen’s freedom, the courts use three levels of responsibility, or “scrutiny”, ordinary, intermediate and strict. When dealing with laws that could restrict something that is considered a civil liberty, due process and equal protection, such as in the 1st and 14th amendments, the courts apply the rule of “strict scrutiny”. Under this standard, the government must show that the law was enacted to meet a “compelling” state interest. Further, the law must be the least restrictive mechanism to accomplish the goal. And finally, the law must be tailored narrowly to avoid being overly broad. Laws that are meant to restrict abortion, freedom of speech/expression and the practice of your religion, for instance, must meet this standard. It is a very high standard and is seldom met in the eyes of many recent courts. In contrast, in challenges to PPACA under the Commerce Clause, the government is only required to meet a standard of ordinary scrutiny. To meet this standard, the government need only have a legitimate interest and have a rational basis for the action taken by the law. This is a very low threshold for the government to meet and a very high hurdle for any plaintiff to overcome. The plaintiff must show that the government has no “legitimate interest” being addressed and no “rational basis” for enacting the law. The burden of proof is owned by the plaintiff and it would seem that the standard for the government is very low. However, the plaintiff will argue that, while the government may regulate insurance contracts under the Commerce Clause, the government has no legitimate interest in requiring him to contract for such health insurance. The argument for the government will be along the lines of similar requirements for motorists to purchase auto insurance. The government need only show a legitimate interest and rational basis, such as providing health care for the uninsured and that this law will accomplish that end.

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Along the same lines, the plaintiff will argue that the government has no authority to use the IRS to impose a penalty to compel compliance in a commercial contract. To overcome this, the administration is in the awkward position of arguing that the mandated penalty is actually a tax, which is a specifically stated power of Congress. Even if the provision of health care may be deemed a reasonable federal provision, justifiable under the Commerce Clause, is taxing the individual taxpayer? Many feel this crosses a distinct line. Taxing and spending powers are also very broad. However, justification has to be made for imposing a new tax on citizens. It is simple, if the reason is for generating revenue, the new tax has met its regulatory burden.  What’s even more interesting is the application of this “tax” within PPACA. The purpose is a penalty to compel compliance. They didn’t say anything about this penalty being a tax, with the traditional purpose of raising revenue, to support the healthcare system, and Mr. Obama emphatically denied that PPACA would raise taxes. It will be interesting to see if the plaintiff uses Mr. Obama’s own words to defeat his signature piece of legislation.

Mr. Sissel may also argue that the government has no legitimate interest in whether he is healthy or not, which is a personal liberty. This would be a violation of the 14th Amendment, under which, the government is not allowed to deprive an individual of life, liberty or property without due process. Remember that to overcome this argument, the state must show a “Substantial” interest (heightened/intermediate level of scrutiny). While it may seem logical that a state has an interest in maintaining the health of it’s citizens, the administration must take a line of argument very close to saying that the government may regulate any unhealthy lifestyle. The plaintiff may argue that this would open the door to criminalizing any activity, such as smoking, obesity and unsafe sexual practices, that would raise ones health risks.

Will PPACA be upheld by the courts? The authors split on their predictions. On the one hand the legal standard for the government seems low, and conversely high for the plaintiff to overcome. But the mood of the country is unmistakably against this law. And further intrusion into the lifestyles and personal liberties of citizens, along with higher taxes to support it, might be enough for the court to rule against it.

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Even if Mr. Sissel’s case fails, the law faces challenges on several other constitutional bases. Some organizations have filed suit challenging the law under the 1st amendment, stating that the Act interferes with their right to practice their religion. These suits argue that the Act requires those that do not believe in western medical practice, such as Christian Scientists, Jehovah Witnesses, and others, to purchase medical insurance, thus violating their conscience. Others will argue that they cannot be compelled to pay for insurance that provides support for abortion. More than a dozen states attorneys-general have
filed suits to invalidate the law arguing that it violates the 10th amendment. This amendment states that powers that are not specifically granted to the federal government are reserved for the states. Virginia, the first state to file, set up the clash when the General Assembly enacted a state law exempting its citizens from buying health insurance. The Obama administration attempted, but failed to get the case dismissed. But the judge responded in a 32-page decision, allowing the case to proceed, saying that the case raised a host of complex constitutional issues.

The final outcome of these suits will likely take considerable time and will probably result in appeals before we ever get a decision. However, in the interim, many of the suits request injunctive relief, which would delay any action being taken on the implementation of the bill until the cases are decided. This action alone, will speed up the process of getting the cases to the Supreme Court, where the final decisions will undoubtedly be made.

Secretaries Sebelius and Geithner are not the only ones getting sued these days. Even President Obama has been named as a defendant. In Thomas More Law Center, et al. v. Barack Obama, et al., filed in the U.S. District Court (Eastern District, Michigan) on May 11th, the plaintiff requested preliminary, injunctive relief from the mandate to purchase the “qualified plan” which is more expensive than a basic medical plan. Although the request was eventually denied, the defendant’s answer to the request was interesting. “The minimum coverage provision,” wrote Mr. Obama “is an essential part of the Act’s broader regulatory scheme.” In other words, if the mandate, with definitions of what can and cannot be purchased and the penalties for failing to do so, is invalidated, so will the entire Act. Again, Mr. Obama may regret his words.

Even if Mr. Sissel’s suit fails on some other grounds, this case has raised fundamental constitutional issues that must be settled by the Supreme Court. The Court may uphold the law in total or in part, they may strike it down completely or send it back to a lower court for further definition of the issues. The worst-case scenario would be more of what we have in EMTALA, where the law requires services but does not require anyone to pay for them. We can only hope that we end up with a law that helps more than it hurts.

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photo by Pete Souza

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