Health Care Law Blog

First Appellate Holding: PPACA is Constitutional

On June 29, 2011, the 6^th Circuit Court of Appeals issued the first appellate decision with regard to the constitutionality of the Patient Protection and Affordable Care Act ("PPACA").  In a split decision (2-1), the court upheld the minimum coverage provision of PPACA (also know as the 'individual mandate') as constitutional.  The individual mandate essentially fines non-exempt persons for not securing minimum essential health insurance coverage. The court noted that this provision was effectively a regulation on the practice of self-insuring (an individual's actions in arranging his or her own financial affairs to compensate for future health care needs).

The provision was held constitutional because it regulated economic activity that Congress could rationally believe (1) had a substantial effect on interstate commerce and (2) was essential to the larger economic scheme reforming the interstate markets in health care and health insurance. Disagreeing with the argument that the provision regulated inactivity, the court stated that the provision actually regulated active participation in the health care market but, nonetheless, Congress could regulate inaction.

It will be interesting to see how the 4^th and 11^th Circuit Courts of Appeal will rule on this issue in similar cases and whether the US Supreme Court will become involved. Stay tuned for future developments on this hotly contested topic.

Categories: Health Care Reform, Insurance