OBAMA ADMINISTRATION WINS FIRST ACA APPEALS ROUND

The first of three anticipated federal Courts of Appeals decisions on the constitutionality of the Affordable Care Act was handed down yesterday by a Sixth Circuit panel in Cincinnati—and it was a win for the Obama administration.

The three judge panel ruled two to one against an appeal by the conservative Thomas More Law Center of an earlier federal District Court finding that the ACA does not violate the Constitution. The ruling was especially notable as the first in which a Republican judicial appointee supported the constitutionality of the ACA’s individual mandate.

The majority opinion emphasized that the case should not hang on distinctions about whether the failure to buy insurance should be defined as activity or inactivity, a question the Supreme Court has never considered. “The constitutionality of the minimum coverage provision cannot be resolved with a myopic focus on a malleable label,” the opinion stated, but also noted: “The activity of forgoing health insurance and attempting to cover the cost of health care needs by self-insuring is no less economic than the activity of purchasing an insurance plan.”

Judge Jeffrey Sutton, appointed to the Court by President George W. Bush, added: “Inaction is action, sometimes for better, sometimes for worse, when it comes to financial risk. Whether an individual buys an insurance policy or not, each requires affirmative choices; one is no less active than the other, and both affect commerce.” In contrast, Judge James Graham, the second Republican appointee on the panel, countered that if the mandate was allowed, “it is difficult to see what the limits on Congress’s Commerce Clause authority would be.”

The majority emphasized its belief that health care is a unique market because most providers are required to treat people—a critical piece of the government’s argument. As Judge Sutton wrote in concurring: “A mandate to purchase health insurance does not parallel other settings or markets. Regulating how citizens pay for what they already receive (health care), never quite know when they will need, and in the case of severe illnesses or emergencies generally will not be able to afford, has few (if any) parallels in modern life.”

The ruling by the Cincinnati court is the first of three opinions to be delivered by separate Courts of Appeal. Opinions are expected soon from panels in the Fourth Circuit in Richmond, Va., and the Eleventh Circuit in Atlanta.

It is expected that the Supreme Court will take one or more of the cases, perhaps as soon as its coming term, which starts in October. The speed of the Sixth Circuit ruling could help ensure that timing.