Bloomberg News

Judge Invalidates Health-Care Act’s Insurance-Buying Mandate

September 13, 2011

(Updates with Justice Department comment in sixth paragraph.)

Sept. 13 (Bloomberg) -- The requirement in the 2010 health- care law that most Americans buy insurance or pay a fine is unconstitutional, a federal judge in Pennsylvania ruled.

U.S. District Judge Christopher C. Conner in Harrisburg today said Congress exceeded its powers under the federal Constitution when it included in the act President Barack Obama signed last year the provision requiring almost all Americans to have medical insurance starting in 2014.

“The federal government,” Conner said, “is one of limited enumerated powers, and Congress’s efforts to remedy the ailing health-care and health-insurance markets must fit squarely within the boundaries of those powers.”

Three federal appeals courts have weighed in on the issue since June 29. A Cincinnati three-judge panel backed the provision 2-1, while one in Atlanta rejected it by the same vote. The U.S. appeals court in Richmond on Sept. 8 declined to rule on two separate challenges, citing jurisdictional grounds.

The Harrisburg ruling, if appealed, would be heard by the U.S. Court of Appeals in Philadelphia, which hasn’t yet ruled on the merits of the Patient Protection and Affordable Care Act.

‘Constitutional’ Act

“The Department of Justice believes -- as appellate courts have already held -- that the Affordable Care Act is constitutional,” Tracy Schmaler, a spokeswoman for the federal agency, said in an e-mailed statement.

She declined to say whether the U.S. would appeal Conner’s decision.

The case before Conner was filed by Gregory Bachman, 56, and Barbara Goudy-Bachman, 48, a married couple with two children, living in Etters, Pennsylvania, according to the court’s ruling.

The couple, who told the court they were self-employed, challenged the constitutionality of the mandate, arguing that their health insurance premiums had exceeded the cost of their mortgage payments and that since dropping their coverage in 2001, they’ve been able to pay their expenses “in full out of current assets,” according to today’s ruling.

The U.S. contended that the health care services market is unique in that the Bachmans cannot truly “opt out” from participation in it simply by choosing to be uninsured.

‘Uncharted Territory’

Acknowledging the Atlanta and Cincinnati appellate rulings, Conner said “both decisions spotlight the individual mandate’s voyage into unchartered territory of constitutional law.”

Neither the court, nor the parties, had found any precedent addressing Congress’s ability to regulate a market solely because it is unique, Conner wrote.

Until such time as the U.S. Supreme Court addresses that issue, the health care act “cannot withstand constitutional scrutiny,” Conner said.

The Ann Arbor, Michigan-based Thomas More Law Center, which lost the June 29 appellate ruling in Cincinnati, has petitioned the high court for review of the decision.

The case is Goudy-Bachman v. U.S. Department of Health and Human Services, 10-cv-763, U.S. District Court, Middle District of Pennsylvania (Harrisburg).

--Editors: Mary Romano, Fred Strasser

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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