Obama Health Care Bill Next Up for Appeals Court Challenge

June 7, 2011 -- A federal appeals court in Georgia Wednesday is poised to hear a challenge brought by 26 states to the Obama administration's health care law.

Although appeals courts in Ohio and Virginia have heard similar challenges to the constitutionality of the Affordable Care Act, Wednesday's case has drawn increased attention because of the number of states involved and because a lower court judge invalidated the entire law when he ruled against the Obama administration in January.

At the heart of the case is the key provision of the law -- the individual mandate -- that requires individuals, with few exceptions, to buy health insurance by 2014 or pay a tax penalty.

Judge Roger Vinson of the U.S. District Court for the Northern District of Florida went further than any other judge in January and ruled that Congress had exceeded its authority in passing the mandate and concluded that the rest of the law could not stand without it.

"I must conclude that the individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit," he said.

"In the final analysis, this act has been analogized to a finely crafted watch, and that seems to fit. It has approximately 450 separate pieces, but one essential piece (the individual mandate) is defective and must be removed."

Vinson's ruling won't take effect pending the resolution of the appeal. While an appellate court has yet to rule on the case, three lower court judges have upheld the law and two others have ruled against the Obama administration.

The issue is expected to ultimately reach the Supreme Court. Wednesday's case will include arguments by powerhouse Washington lawyers. Acting Solicitor General Neal Katyal will defend the law on behalf of the government while Paul Clement, the former solicitor general of the Bush administration, will argue on behalf of the states. Clement will be joined by Michael A. Carvin of Jones Day, who is representing two private parties, and the National Federation of Independent Business, which also opposes the law.

Katyal argues in court papers that Congress was well within its authority to pass the individual mandate because the Constitution give Congress the broad authority to regulate interstate commerce.

Katyal points to the historical astronomical costs of the uninsured -- $43 billion in 2008 -- and says that such costs are passed on to other participants across the country in the health services market.

The individual mandate, he argues, is meant to regulate the timing and method of payment for health care services.

"The tens of billions of dollars in annual health care costs that people without insurance fail to pay are passed on to other participants in the health care services market, a burden on interstate commerce that plainly qualifies as substantial."

Katyal stresses that individuals, at some point in their lives, will all need health care and this law is about how to finance it.

But Clement argues that the law forces individuals into a marketplace and "pushes even the most expansive conception of the federal government's constitutional powers past the breaking point."

"The Act," he writes, "imposes a direct mandate upon individuals to obtain health insurance, marking by all accounts the first time in our Nation's history that Congress had required individuals to enter into commerce as a condition of living in the United States."