A federal judge in Virginia ruled the healthcare reform law’s provision requiring Americans to buy insurance is unconstitutional, marking the Obama administration’s first major defeat in defense of the new law.
U.S. District Court Judge Henry E. Hudson only struck down the individual mandate and “directly dependent provisions” while upholding the rest of the reform law. The decision marks the first major step in a lawsuit destined for the Supreme Court.
Legal observers expected Hudson, a President George W. Bush appointee, to rule against the Obama administration in the lawsuit filed by Virginia Attorney General Ken Cuccinelli, a rising GOP star who some think might run for the Senate in 2012.
The individual mandate was a central part of the healthcare reform law. It requires all people to buy insurance by 2014 or face a penalty.
Hudson said the law’s final language deceptively labels the penalty a tax, after it had been called a penalty in draft language just hours before the final bill was passed on Christmas Eve last year. The distinction between penalty and tax became a sticking point because the Constitution grants the federal government wide latitude to impose taxes, but a penalty could amount to regulation of commerce across state lines in violation of the Constitution.
Throughout the debates, Democrats in Congress and Obama said it wasn’t a tax in part because that would have violated his pledge not to raise taxes against middle-class Americans. The administration changed its tune to back its legal arguments for the individual mandate, but the judge didn’t buy it.
“This Court’s analysis begins with the unequivocal denials [during the debate] by the Executive and legislative branches that the [law] was a tax,” Hudson wrote.
Rep. Eric Cantor (R-Va.) called on President Obama and Attorney General Eric Holder to request the case be sent directly to the Supreme Court.
It's important yet somehow not important to note that the judge upheld the other provisions of the law, striking down only the individual mandate.
The ObamaCare law as written contains no severability clause which allows other portions of the law to stand even if one portion of the law is found unconstitutional.
Well, how come there is no severability clause?
Word around the campfire is that in their haste to rush this thing to a Senate floor vote last Christmas Eve, they simply forgot it, natch. A competing theory holds that the severability clause was purposely omitted to mollify competing interests so that if one interest's portion gets taken down the whole thing gets taken down. For a legislative body that completely forgot to add language exempting themselves from ObamaCare, we're inclined to go with the Keystone Cops theory.
Legally speaking, this may not be a big deal. Structurally speaking, however, this is huge.
The Supreme Court has demonstrated in the past, that even in the absence of a severability clause, they ruled that the spirit of the law intended for severability. You forgot to put it in there? No worries. We got you covered.
If the individual mandate is struck down, ObamaCare may be crushed under its own weight anyway and even the Obama administration has acknowledged this. One of the prime funders for ObamaCare is the individual mandate. One of the major ways this thing was going to pay for itself was for previously uninsured, healthy, younger people to be forced to purchase health insurance to help prop up the risk pool and then (hopefully) not use the health insurance.
Without the individual mandate, ObamaCare cannot fund itself.
So, again, legally-speaking, this may not be very important but from a structural integrity standpoint - how this thing is to operate and how it is funded - it is huge.