Appellate Court Rules on Individual Mandate

On August 12, the U.S. Court of Appeals for the 11th Circuit Court ruled the individual mandate included in the Affordable Care Act unconstitutional.  In the decision, the judges explained that “the individual mandate contained in the act exceeds Congress’s enumerated commerce power.”

The federal appellate court, however, overturned several key rulings made by Judge Roger Vinson in the Northern District of Florida in the case brought by 26 States, the National Federation of Independent Business, and two individuals.  Specifically, the 11th Circuit Court judges found that the health care reform law could stand on its own without the individual mandate.  In addition, the court found that the Medicaid expansion is not unconstitutional.

The case heard before the 11th Circuit Court is the first to be decided in appellate court and found unconstitutional.  Earlier this summer, an appellate court in Cincinnati found the law to be constitutional.  Challenges brought separately by the State of Virginia and Liberty University are still pending in appellate court.  The Supreme Court is expected to consider a challenge to the Affordable Care Act, but we do not expect the Court to issue a ruling prior to the 2012 election.

In March, the Government Accountability Office (GAO) released a report examining alternatives to the individual mandate.  GAO found that mechanisms employed in Medicare Part B or Part D could be alternatives.  In Medicare Part B, the longer a senior waits to enroll, the higher the beneficiary’s monthly premium.  The report indicated that Congress could amend ACA so that uninsured individuals would pay a higher premium if they delayed purchasing insurance coverage.  GAO also noted that the government could limit the open enrollment period in the health insurance Exchanges to once every few years and require individuals who do not enroll in plans offered by the Exchanges to pay higher co-payments or deductibles.

Sen. Ben Nelson (D-NE) and Sen. Claire McCaskill (D-MO) are considering introducing legislation that would provide an alternative to the individual mandate.  Rep. Peter DeFazio (D-OR) introduced the “Personal Responsibility in Health Care Insurance Act” (H.R. 767), which would require individuals who do not want to purchase health insurance to sign an “affidavit of personal responsibility” and would prohibit them from using the bankruptcy court to reduce their health-related debt.

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