Feds Do Their Talking in Court Over Affordable Care Act

While the country was enduring another round of Phelpsapalooza, and another mash note from Judge Roger Vinson on the Patient Protection and Affordable Care Act, and while the House of Representatives was plotting its defense of the teetering Defense of Marriage Act, the Justice Department quietly last week filed its main appellate brief in the leading case challenging the nation's new health care law.

The feds formally asked the 4th U.S. Circuit Court of Appeals to overturn the work of U.S. District Judge Henry Hudson, the federal trial judge in Virginia who late last year struck down the "individual mandate" portion of the Affordable Care Act. This isn't the first appellate word from the feds about the Act. And it surely won't be the last. But it's still worthwhile to go through the Justice Department's 77-page brief. Dense legal writing aside, it is by far the most cogent rationale for the Act I have seen in one place at one time in a long time (and free from the excesses of political rhetoric).

Here, it turns out, is where the Obama administration is eloquently defending the legitimacy of the Act and Congress' power to enact it. For example, here's how federal lawyers answer the argument that health insurance is not a federal matter:

"Millions of people without health insurance have consumed health care services for which they do not pay. These uncompensated costs—totaling $43 billion in 2008—are shifted to health care providers regularly engaged in interstate commerce. Providers pass on much of this cost to private insurance companies, which also operate interstate. The result is higher premiums which, in turn, make insurance unaffordable to even more people. At the same time, insurance companies use restrictive underwriting practices to deny coverage or charge unaffordable premiums to millions across the nation because they have pre-existing medical conditions."

Here is what the feds think of Judge Hudson's conclusion that the Commerce Clause of the Constitution does not authorize a federal law requiring people to buy health insurance. The Justice Department says:

"This analysis misconceives the nature of the regulated market and the governing Commerce Clause principles. People who attempt to pay for health care services out-of-pocket are no less 'in the stream of commerce' than people who pay with insurance. Further, when people consume health care without insurance to pay for it, others in the market bear its costs. The minimum coverage requirement is not an end in itself; it is a means of regulating the health care market."

And here is what the feds think of Judge Hudson's argument, since endorsed by Judge Vinson in Florida, that the Congress has no power to regulate commercial "inactivity" (i.e. the individual choice not to purchase health insurance). Federal attorneys wrote:

"Individuals do not remove themselves from the health care market or 'the stream of commerce' by attempting to pay for services out of pocket rather than with insurance. Congress may regulate the conduct of participants in the health care market even if the participants are 'inactive' in the insurance market. Thus, even assuming arguendo that the minimum coverage provision could be thought to regulate inactivity, Congress is not regulating inactivity 'as such,' but as an aspect of its regulation of active participation in the health care market" (citations omitted).

Judge Hudson erred in "analyzing the minimum coverage provision through the lens of 'inactivity,' rather than by reference to 'broad principles of economic practicality,'" the feds argue in a case poised to reach the United States Supreme Court first, sometime next year. Although the Florida challenge to the Act is larger in scope—more than two dozen states are plaintiffs in it—the Virginia challenge is slightly further ahead procedurally. It is likely, in any event, that the Court will join all of these cases together for one huge ruling that affects them all.

Until then? The feds offer a parting shot to Judge Hudson, Judge Vinson and other conservatives who are concerned that the legal precedent created by a judicial endorsement of the Affordable Care Act would lead one day to all sorts of federal intervention in local matters, ultimately resulting in the You Must Eat Broccoli Act. Federal attorneys wrote:

"At the end of the day, evaluation of whether an action by Congress is necessary and proper calls for a deferential examination of the legislation in question, its factual context, and Congress's reasons for acting. The analysis cannot be driven by hypothetical statutes that no legislature would ever adopt. Congress's commerce power to enact minimum wage legislation is not defeated because, hypothetically, Congress could use that power to set a minimum wage of $5,000 per hour" (citation omitted).

Drop-down bar image credit: Hyungwon Kang/Reuters