Forced Health Insurance Purchase Unconstitutional

Federal judge rules against provision requiring health insurance purchase

A federal judge in Richmond, Va., ruled Monday that Congress had no authority under the Constitution to require that nearly every American obtain health insurance by the year 2014 — a crucial part of the health care package promoted by President Obama. U.S. District Judge Henry Hudson, in a 42-page ruling, declared that “an individual’s personal decision to purchase — or decline to purchase — private health insurance is beyond the historical reach of the Commerce Clause.” This was the first federal court ruling against that requirement, after four other judges had turned aside similar challenges — sometimes for procedural reasons.

Judge Hudson’s ruling does not have an immediate practical impact, except that it probably injects some uncertainty into the market and creates quite a bit of political discussion. The Individual Mandate does not go into effect until 2014, before which we anticipate the United States Supreme Court will have issued a decision in this case. However, long-term, we are all aware that if the Supreme Court upholds Judge Hudson’s ruling, then a guaranteed issue environment (which also emerges in 2014) without an individual health insurance mandate will present significant challenges.

The federal government does not view this decision as impacting current Affordable Care Act implementation efforts — they will expect business as usual.

This is a highly politicized issue. Judge Hudson’s decision references that fact. We have already seen other courts hold that the Individual Mandate is constitutional. In addition, there are still numerous lawsuits challenging health care reform that have not been decided. Accordingly, we can anticipate that several more decisions will be issued down the road, some of which will hold provisions of the Affordable Care Act to be constitutional, while others, like this one, will hold the exact opposite.

We will continue to follow for any further developments.

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