The Patient Protection and Affordable Care Act (the “Act”) — known as health-care reform or ObamaCare by many proponents and opponents, respectively — is being challenged in the courts. A major issue concerns the constitutionality of the federal mandate that all individuals maintain adequate health-insurance coverage or pay a penalty to the Internal Revenue Service.
The challengers claim that the mandate, which requires individuals to purchase a product, falls outside the federal government’s purview to regulate interstate commerce. The Obama Administration insists, conversely, that the Interstate Commerce Clause of the Constitution affords Congress the authority to mandate individual behavior in this instance. Since all or at least most citizens will at some point engage in the commerce of health care, they are subject to the clause, the argument goes.
The opponents of the mandate counter that the law regulates inactivity. Specifically, the law does not require that one engage in health-care commerce at all in order to be subject to the law; rather, all citizens must purchase health insurance or pay a penalty. Essentially, citizens must buy health insurance just for existing, without any nexus to their health-care activity. As such, the mandate exemplifies a law that falls outside of Congress’s legislative power.
So far, two conservative judges have ruled the individual mandate to be unconstitutional, while two liberal judges have upheld the law.
In January of this year, Judge Roger Vinson, a senior federal judge in Florida, ruled that the Act is unconstitutional. He also rejected the option of severing the individual mandate from the overall Act and therefore declared that the entire law is invalid. However, he allowed the law to stand while the Obama Administration appeals it.
However, on June 29, the Sixth Circuit Court of Appeals upheld the reform law, declaring the individual mandate to be constitutional under Congress’s right to regulate interstate commerce. The court held that the mandate regulates health care (something most or all citizens purchase and are active in economically). In addressing the issue of legislating inactivity, the court maintained that since most people will use health care regardless of whether they have health insurance, the decision to self-insure (i.e., to decline purchasing health insurance) is in itself an economic activity and therefore falls within Congress’s legislative power.
The decision was not unanimous, and the dissenting judge, James Graham, said he believed “the mandate is a novel exercise of Commerce Clause power” and that Congress has never before “required individuals to purchase a good or service.”
Although the future of “ObamaCare” remains a mystery, the Act is still on the books and is binding. Following is a quick summary of some of its relevant provisions that are or will become effective.
Dependents (children) will be permitted to remain on their parents’ insurance plan until their 26th birthday, even if they no longer live with their parents, are not dependents on a parent’s tax return, or are no longer students, as was the case under the prior law.