Appeals Court Rejects Challenge to Health Care Law

gavel An appeals court in Richmond, Virginia, has rejected two of the biggest challenges to the Affordable Care Act. The court says that the dispute over whether or not the federal government can require all Americans to purchase health insurance should be put off for three years, or until the first taxpayers are hit with a penalty for not purchasing health insurance.

In August of 2011, the Eleventh Circuit Court of Appeals, in Atlanta, voted 2-1 that the individual mandate was unconstitutional. In other words, the three judge panel voted that the federal government did not have the right to require all Americans to purchase health insurance in 2014. The implication is that the judges also voted that the federal government cannot impose a fee upon the people who choose not to buy health insurance.

In that court case, Judge Joel Dubina, (who was appointed by President George W. Bush) and Judge Frank Hull, (who was appointed by President Bill Clinton), each voted that the individual mandate was unconstitutional. Judge Stanley Marcus, (who was appointed by President Bill Clinton), cast the dissenting vote.

Recently, the United States Fourth Circuit Court of Appeals, in Richmond, rejected two of the challenges to the health care law. The court decided that the legal battle over whether or not the federal government can require Americans to buy health insurance should be put off, for now.

The judges said it should be put off for three years (until 2014 when the insurance exchanges are supposed to start), or until the first taxpayers are hit with a penalty (for choosing not to buy health insurance.

All three judges on the panel for this court case were appointed by Presidents who were Democrats. Two of the judge were named by President Obama. It was expected that this panel of judges would ultimately decide that the individual mandate was constitutional. What is interesting is the rationale that the judges used to make their decision.

Chief Judge Diana Gribbon Motz based her ruling on an obscure law called the Anti-Injunction Act. This law states that judges are not allowed to decide lawsuits that challenge a tax before that tax has actually been collected.

The penalty that people would have to pay if they choose not to buy health insurance is a tax. In 2014, the Internal Revenue Service will impose a $95.00 tax penalty on Americans who have taxable income that choose not to maintain a minimal amount of health insurance coverage. In 2015, the tax penalty rises to $325.00, and in 2016, the tax penalty will be $695.00.

Judge James Wynn agreed with Chief Judge Diana Gribbon Motz. He also said that the individual mandate was constitutional. Judge Andre Davis says that the penalty is not actually a tax. He also said that the individual mandate is constitutional because Congress can regulate the interstate market in health insurance.

Image by Gordon Joly on Flickr

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