Death Knell for Obamacare?

Death Knell for Obamacare?
By Peter Ferrara
12/14/2010

Federal Court Judge Henry Hudson granted America an early Christmas present on December 13 by declaring the individual mandate in Obamacare unconstitutional.

The individual mandate is the provision that requires all individuals without employer-provided health insurance to purchase health insurance with all of the benefits and provisions as specified by the federal government. Hudson ruled that the federal government does not have the power to impose this under any of the enumerated powers of the Constitution.

In regard to federal authority to regulate interstate commerce under the Commerce Clause, Hudson held, “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.” Obamacare’s individual mandate does precisely that by requiring an individual to buy health insurance..

Hudson also rejected President Obama’s lawyers’ attempt to argue that the individual mandate was constitutional as an exercise of Congress’s power to tax. In a famous exchange on national television with George Stephanopoulos in 2009, Mr. Obama vigorously denied that the individual mandate was in any sense a “tax.”

Judge Hudson relied on this and the statement in the legislation that its authority arises from the Commerce Clause to base his decision on “the unequivocal denials by the Executive and Legislative branches that the [individual mandate] was a tax.” As a legal matter, the individual mandate is transparently a regulation, not a tax. Judge Roger Vinson, hearing a suit in Florida by 20 states challenging the constitutionality of Obamacare, has already dismissed that claim on the same grounds.

However, even though the legislation does not include a severability clause, which traditionally provides that the law would remain in force if any of its provisions are declared invalid, Judge Hudson nevertheless declined to strike down the entire act.

This ruling is an enormous victory for Virginia Attorney General Ken Cuccinelli, who is building a tidal wave of momentum for political graduation to Governor or Senator soon. The American Civil Rights Union (ACRU), where I serve as General Counsel, filed a brief in this case in support of Cuccinelli and Virginia.

One of the unique arguments of that brief was that the uniform discussion of the lawyers in the case of the “interstate market for health insurance” made no sense, because there is no interstate market in health insurance, particularly in regard to the individual insurance that the individual mandate compels citizens to buy. All such insurance is sold only intrastate, under federal and state law. A central argument against Obamacare was that allowing health insurance to be sold interstate was a superior reform that would hold down costs through increased competition.

Having filed a brief for the ACRU in the Florida case as well, I predict that with this precedent, Judge Vinson in Florida will also rule the individual mandate unconstitutional, on the same grounds. And I predict that the Supreme Court will as well, going on to strike down the entire Act because as even the government argued so persuasively in its briefs, the legislation is unworkable without the individual mandate.

If Judges Hudson and Vinson see the issue this way, then the handwriting is on the wall that Justices Scalia, Thomas, Roberts and Alito will, too. That leaves Kennedy with the decisive vote, as the court’s liberals will typically abandon serious legal analysis and go with the politics for Obama.

What will prove crucial in winning Kennedy’s vote, in my view, is another unique argument made in the ACRU’s briefs: Congress has alternatives to achieve all of the social goals of Obamacare that would be constitutional. Justice Kennedy would be loathe to rule, I believe, that the Constitution does not allow the social goals of Obamacare to be achieved at all, leaving some without essential health care.

Indeed, those alternatives would achieve those goals at far less cost. They would involve creating a true health care safety net for the poor and the sick, through two measures. One is to provide vouchers through Medicaid for the poor to purchase private health insurance, preferably by block granting Medicaid back to the states. The other is to create taxpayer-subsidized, high-risk pools in each state that would provide coverage to the uninsured who had become too sick to purchase health insurance in the private market.

President Obama and the Democrats did not want to pursue those alternatives because they don’t involve the government’s takeover of health care. Period.
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