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Sixth Circuit Upholds Individual Mandate in Healthcare Reform Law

06.30.11

by: Paul Davidson  email

Yesterday a three-judge panel from the United States Court of Appeals for the Sixth Circuit became the first appellate court to uphold the constitutionality of the minimum coverage provision of the Patient Protection and Affordable Care Act (the "Act"), requiring that Americans obtain health insurance. Opinions are expected from the Fourth and Eleventh Circuits later this summer.

The Act, passed by Congress last year, contains five essential components designed to make significant changes to public and private health insurance and extend medical coverage to approximately 30 million uninsured Americans. By far, the most contested provision is the individual mandate, which requires every "applicable individual" to obtain "minimum essential coverage" of health insurance starting in 2014 or pay a tax penalty.

The plaintiffs, a conservative public interest law firm from Michigan and four individuals, argued that the minimum coverage provision compels, rather than simply regulates, economic activity, and is therefore unconstitutional. On these grounds, the plaintiffs "sought a declaration that Congress lacked authority under the Commerce Clause to pass the minimum coverage provision, and alternatively a declaration that the penalty is an unconstitutional tax." The district court found the provision to be authorized by the Commerce Clause.

The overriding question on appeal was whether a person's decision to self-insure for the cost of healthcare is a type of economic activity that constitutes commerce or a kind of inactivity that is beyond congressional regulation. Judge Boyce F. Martin, a Carter appointee, ruled that the mandate was "facially constitutional under the Commerce Clause" because "the provision regulates economic activity that Congress had a rational basis to believe has substantial effects on interstate commerce." Judge Martin also explained that "Congress had a rational basis to believe that the provision was essential to its larger economic scheme reforming the interstate markets in health care and health insurance."

Although lower court decisions on the individual mandate have ostensibly split along partisan lines, this is the first ruling where a Republican appointee has voted to uphold the constitutionality of the law. Judge Martin was joined in this 2-1 decision by Judge Jeffrey Sutton, a George W. Bush appointee. This ruling, along with others expected later this year, will likely be further appealed to the Supreme Court.

For more information, please contact Paul Davidson, Tanielle Henriques or any member of Waller Lansden's Healthcare Department at 800-487-6380.