Second Appellate Panel Hears Arguments on Health Care Law

What do you think the end result will be? Is it lawful and constitutional to mandate Americans carry health coverage? The Second Appellate Court is prepping for the debate now, and it will have implications for individuals and businesses alike.

– Eric

Second Appellate Panel Hears Arguments on Health Care Law


CINCINNATI — A panel of federal appellate judges seemed eager on Wednesday to rule on whether it is constitutional for the Obama health care law to require that uninsured Americans buy medical coverage. But the judges must first decide whether the plaintiffs still have legal standing to sue, after one disclosed that she recently bought health insurance from her employer.

The three judges from the United States Court of Appeals for the Sixth Circuit in Cincinnati heard arguments for 90 minutes on the second challenge to the health care law to reach an appellate hearing. Five lower-level district court judges have ruled on the merits of the challenges, with three upholding the law’s constitutionality and two striking down all or part of it.

The cases are vying for ultimate consideration by the Supreme Court, which is expected to decide whether President Obama’s signature domestic legislation exceeded the bounds of Congress’s constitutional authority to regulate interstate commerce.

One judge, James L. Graham, pressed that question on Wednesday with Neal K. Katyal, the acting United States solicitor general, who is defending the law for the Obama administration.

“Where, ultimately, is the limit on Congress’s power?” the judge asked.

Mr. Katyal responded that the government had never suggested that there were no limits.

“Where are they?” Judge Graham continued. “I want to find them.”

Mr. Katyal then argued that the law’s insurance mandate, which takes effect in 2014, does not so much require individuals to buy coverage as it does regulate the way they pay for health care they will inevitably consume. Without the mandate, Mr. Katyal said, the law’s requirement that insurers provide coverage to all applicants, regardless of their health status, would simply encourage people to buy insurance after they got sick.

“Congress is not regulating the failure to buy something, but the failure to secure financing,” Mr. Katyal said.

Wednesday’s hearing came in a challenge to the law filed by the Thomas More Law Center, a public interest law firm in Ann Arbor, Mich., that describes itself as “the Christian response to the A.C.L.U.” The center primarily takes cases involving Christian expression in the public square. Its health care lawsuit pointedly listed the defendant by his full name: Barack Hussein Obama.

Mr. Katyal began Wednesday’s hearing by arguing that the case should be dismissed because one of the plaintiffs, a Thomas More member named Jann DeMars, bought an insurance policy last October from her employer.

In the original lawsuit, filed in March 2010, Ms. DeMars argued that she was entitled to sue because she was uninsured and would have to make burdensome choices to afford a policy in 2014. Because she now has coverage, Mr. Katyal said, Ms. DeMars can no longer demonstrate any imminent injury, which is required to mount such a challenge.

The government arguably drew a less friendly panel on Wednesday than it did last month at the Court of Appeals for the Fourth Circuit in Richmond, Va., which heard the appeal of a ruling against the insurance mandate. The Fourth Circuit panel consisted of three judges appointed by Democratic presidents, including two by Mr. Obama himself.

The randomly selected Sixth Circuit panel includes two judges appointed by Republicans — Jeffrey S. Sutton, who was named by President George W. Bush, and Judge Graham, who was nominated by President Ronald Reagan to the Federal District Court in Ohio and is on temporary assignment to the appellate bench. The third judge, Boyce F. Martin Jr., was appointed by President Jimmy Carter, a Democrat.

A hearing on a third constitutional challenge to the health care law is scheduled for next week in the 11th Circuit in Atlanta. The panel in that court includes Chief Judge Joel F. Dubina, who was appointed by the first President Bush; Judge Frank M. Hull, who was appointed by President Bill Clinton; and Judge Stanley Marcus, who also was named by Mr. Clinton, after being placed on the district court by Mr. Reagan.

All three district court opinions upholding the health care law were written by Democratic appointees, while both of the opinions against it came from Republican appointees.

In the Thomas More case, Judge George C. Steeh of Detroit, a Clinton appointee, accepted the government’s assertion that a choice to decline to obtain insurance could be defined as an active decision, subject to regulation by Congress like other commercial activities.

Supreme Court decisions have upheld Congress’s authority to regulate “activities” that have a substantial effect on interstate commerce. But the courts have never been asked to consider whether such activity can encompass a choice not to buy a commercial product.

Robert J. Muise, senior counsel for the Thomas More Legal Center, urged the judges on Wednesday to reject any effort to equate activity and inactivity.

“They’re mandating somebody to engage in commerce, so they’re effectively regulating inactivity,” Mr. Muise said. “This is where the line has to be drawn.”

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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