Monday, December 13, 2010

Update: A Federal Judge Rules the Federal Mandate to Purchase Health Insurance Unconstitutional

United States Federal District Judge Henry Hudson granted Virginia’s motion for summary judgment against the federal mandate to purchase health insurance, a key provision of the Obama Administration’s federalization of health insurance.

The judge ruled that the mandate exceeded Congress’ authority under the Commerce Clause of the Constitution because it does not regulate an economic activity, but regulates the passive decision not to engage in interstate commerce by not purchasing health insurance. This provision of the health insurance federalization act would be unprecedented, as Congress has never required a resident of the U.S. to purchase a good or service as a condition of residence.

In the Virginia case, the Obama Administration did not rely upon the ridiculous argument advanced by liberal members of Congress, the liberal media and other commentators, and even the President himself, that the mandate to purchase health insurance is like state mandates to purchase car insurance. As I have noted previously, the mandates to purchase car insurance are imposed by states, not the federal government, and are imposed only upon individuals who choose to exercise the privilege to drive on public roads, not upon all residents.

States do not impose upon all residents a mandate to purchase car insurance under the theory that the failure of an individual to purchase car insurance necessarily increases the cost of car insurance for those who do drive, which was the Obama Administration’s theory in the health insurance case. If the Administration had prevailed, then it could impose a penalty on every American resident for the failure to purchase milk, for example, on the theory that such failure increases the cost for everyone else. The Administration’s argument was based in part on the theory that every individual will necessarily use health care at some point in his life. Regardless of this unproven assertion, the Administration also relies upon the liberal assumption that a person who lacks health insurance necessarily cannot afford to pay for health care himself.

The Obama Administration had argued alternatively that the penalty for failure to comply with the mandate was a tax, for which it would have constitutional authority, even though the act refers to the provision as a “penalty.” Regardless of the language of the act, the judge ruled that the provision was intended as a regulation, not to raise revenue.

Virginia’s lawsuit, which certainly will be appealed by the Obama Administration, is separate from Florida’s suit that has been joined by 20 states, with more expected to join. The Administration similarly had failed to win its motion to dismiss Florida’s suit based upon the same issue.

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