Twenty-six states have disagreed and challenged the Act, claiming that by forcing Americans to purchase health insurance, Congress has exceeded the commercial regulatory authority granted it under the Commerce Clause (Article I, Clause 8, Section 3 of the US Constitution). The question, which is being considered today in the 11th Circuit Court of Appeals, is whether the failure to obtain health insurance is a commercial activity subject to Congressional regulation.
The Court will also consider a secondary issue, specifically whether the other provisions of the PPACA are severable from the individual mandate, and if not, whether the entire Act should be struck down.
The concern, according to the Amicus Curiae Brief filed by the US Chamber of Commerce, is that in the absence of the individual mandate, people would wait until they became ill to purchase insurance, resulting in premium strikes and healthy individuals allowing their existing coverage to lapse or foregoing coverage entirely. This would foster a further rise in premiums, a potentiality experienced by states like New York, Washington, and Kentucky wherein similar health insurance reforms have been enacted in the absence of a minimum coverage mandate.
In its Amicus Brief, the Chamber also notes that the Act’s risk adjustment mechanism cannot function properly absent the individual mandate, community-rating and guaranteed-issue reforms. The purpose of the risk adjustment mechanism is reportedly to reallocate premium revenues among insurers so that each receives an amount proportional to its risk exposure. But according to the Chamber, if the individual mandate, guaranteed-issue, and community-rating provisions are invalidated and the risk adjustment mechanism is permitted to remain, “gross inefficiencies in the health insurance markets would exist," resulting in flawed underwriting, poor health care management, and ultimately, rising insurance costs, emasculating the Act’s primary goal - affordable health care.
Let's hope that the 11th Circuit makes a judicious decision, because the Patient Protection and Affordable Care Act, in its current form, is likely to protect little and unlikely to afford the kind of protection intended.
President Barack Obama. (September 9, 2009). Remarks to a Joint Session of Congress on Health Care; Available at http://www.whitehouse.gov/the_press_office/remarks-by-the-president-to-ajoint-session-of-congress-on-health-care
US Chamber of Commerce. (2011). Amicus Brief. Retrieved at http://www.chamberlitigation.com/sites/default/files/cases/files/2011/State%20of%20Florida,%20et%20al.%20v.%20Sebelius,%20et%20al.%20(NCLC%20Brief).pdf
David A. Saltzman. (March 4, 2011). PPACA: To Sever or Not to Sever? Life Insurance Selling. Retrieved at http://www.docstoc.com/docs/73914253/PPACA-TO-SEVER-OR-NOT-TO-SEVER
Hadley Heath. (November 20, 2010). A Severe Mistake for ObamaCare. Constitutional Corner. Retrieved at http://healthcarelawsuits.org/blog/detail.php?c=2390395&t=A-Severe-Mistake-for-ObamaCare