By Jason Millman - 01/31/11 10:04 PM EST
A federal judge in Florida struck down the entire healthcare reform law Monday afternoon, ruling that the requirement for individuals to purchase insurance is unconstitutional and is too central to making the law function.
In the highest-profile challenge to the reform law yet, U.S. District Judge Roger Vinson ruled that the so-called individual mandate exceeds congressional power. Further, he said the whole law cannot stand because the law depends on the mandate to work.
Vinson, who became the second federal judge in two months to rule against the individual mandate, said Congress does not have the power to compel an individual to purchase insurance. Under the reform law, an individual must buy health coverage by 2014 or face a penalty.
“To now hold that Congress may regulate the so-called ‘economic decision’ to not purchase a product or service in anticipation of future consumption is a ‘bridge too far.' " Vinson wrote. “It is without logical limitation and far exceeds the existing legal boundaries established by Supreme Court precedent.”
The lawsuit, filed by 26 states and the National Federation of Independent Business, has been the most visible among legal challenges to the reform law. Dozens of Republican lawmakers, including House Speaker John Boehner (Ohio) and Senate Minority Leader Mitch McConnell (Ky.), filed court briefs opposing the law. The lawsuit grew from 20 to 26 states earlier this month after newly empowered Republican governors asked to join.
The Obama administration, which already said it would appeal the ruling, says the individual mandate is necessary in order to end insurers’ discrimination against individuals with pre-existing conditions. The administration argues that without the mandate, which it dubs the “personal responsibility” provision, healthcare costs would skyrocket because people would wait until they were sick to purchase insurance.
After the decision, White House healthcare messaging guru Stephanie Cutter predicted in a blog post that the law would eventually be declared constitutional.
"We don’t believe this kind of judicial activism will be upheld and we are confident that the Affordable Care Act will ultimately be declared constitutional by the courts," Cutter wrote.
Senior administration officials said Thursday evening the ruling will not affect the implementation the law.
"I don’t imagine right now a set of circumstances under which implementation would not proceed," an official said.
Those opposing the mandate say Congress could not regulate commercial inactivity, which in this case would be an individual’s decision not to purchase health insurance. However, the administration says failure to purchase health coverage is an active decision that can be regulated under the Constitution's Commerce Clause, because all Americans participate in the healthcare system at some point in their lives.
Vinson rejected the argument, saying it provides no limit on what Congress could require Americans to purchase.
"Every person throughout the course of his or her life makes hundreds or even thousands of life decisions that involve the same general sort of thought process that the defendants maintain is 'economic activity,' " he wrote. "There will be no stopping point if that should be deemed the equivalent of activity for Commerce Clause purposes."
So far, two federal judges — both Clinton appointees — have upheld the individual mandate. Vinson and U.S. District Court Judge Henry Hudson, who ruled against the requirement last month, were both appointed by Republican presidents.
The Supreme Court is expected to have the final word on the individual mandate, most likely next year — just in time to play a major role in the presidential election.
Sen. Orrin Hatch (R-Utah), who supported the individual mandate in 1993 before he decided it was unconstitutional, hailed the ruling Monday afternoon.
“Simply put, Congress does not have the legal authority to tell Utahans and other Americans that they must buy health insurance or else,” Hatch said. “The Constitution empowers Congress to regulate interstate commerce, but not to tell the American people what they must buy.”
The ruling did come with some good news for the Obama administration, however — Vinson ruled that Congress has the power to expand the Medicaid program to cover individuals whose incomes are at or below 133 percent of the federal poverty level.
The decision — the first to weigh in on Medicaid’s expansion — comes as states, struggling to close massive budget deficits, ask the Obama administration to loosen Medicaid requirements. Just last week, Arizona asked the administration’s health department for relief from a requirement to maintain Medicaid eligibility standards until new health insurance exchanges start up in 2014. Earlier this month, a letter from 33 governors and governors-elect made the same request.
Republicans have urged the White House and the Justice Department to ask for the challenges to skip the appeals process and head directly to the Supreme Court.
"This healthcare law remains a major source of uncertainty for small businesses," Boehner said in a statement Monday afternoon.
However, the Obama administration has made it clear it has no appetite for rushing through the appeals process. Last month, after a federal judge struck down the individual mandate in a case brought by Virginia Attorney General Ken Cuccinelli (R), the Justice Department said it would not ask to fast-track the appeal to the Supreme Court.
“[T]he individual responsibility provision does not go into effect until 2014, so there is more than sufficient time for the courts to consider this case in their normal course of business,” a department spokeswoman said at the time.
The administration is appealing the Virginia decision to the 4th Circuit Court of Appeals, which said last week it will hold a hearing in early May. Cuccinelli is also asking the court to review Hudson’s decision that the entire reform law could stand without the individual mandate.
The White House downplayed the Virginia decision last month, saying it was “just one of many recent rulings on similar cases that have come in recent months.” Pointing to historic legal challenges to major new laws, including Social Security and the Civil Rights Act, the administration has expressed confidence the law will be upheld in the end.
The Florida decision comes as House Republicans, now in control of the lower chamber, are targeting the individual mandate and other reform law provisions. House Republicans, joined by three Democrats, voted two weeks ago to repeal the reform law, but Senate Democratic leaders have pledged to block a vote from coming to the floor.
Meanwhile, the Thomas More Law Center is appealing to the 6th Circuit an October 2010 decision that upheld the individual mandate.
— This story was first posted at 3:11 and was last updated at 5:04 p.m.