Monday, October 11, 2010

Eastern District of Michigan knocks out two claims against ACA

According to, several lawsuits filed against the Affordable Care Act have been dismissed, but there are still in excess of 20 active claims challenging the constitutionality of the law. Some of the more interesting recent activity occurred on October 7, when the U.S. District Court for the Eastern District of Michigan ruled against the plaintiffs' motion for preliminary injunction and dismissed two of six claims in Thomas More Law Center v. President of the United States (No. 2:10-cv-11156). The plaintiffs, a conservative Christian not-for-profit law center, plan to appeal.

The suit includes a claim under the Commerce Clause of the U.S. Constitution, which is a claim common to other suits against the ACA, as well as claims that the ACA is an unconstitutional tax, that it violates the Tenth Amendment, and that it violates the Equal Protection and Due Process provisions of the Fifth Amendment. The suit also includes a claim that the passage of the ACA violates the First Amendment right to the free exercise of religion - specifically, that it forces citizens to fund abortion, even if their particular religion prohibits it. The plaintiffs asked for a preliminary injunction of the ACA.

Does the individual mandate violate the Commerce Clause? Notably, the Commerce Clause claim is one of the two claims the court dismissed. The plaintiffs had argued that, when the Supreme Court has found that certain statutes survived under the Commerce Clause, they regulated economic activities, and the plaintiffs were, in this instance, being forced to purchase health insurance merely because they existed, not because they were engaging in any particular activity. The court noted that this was a case 0f first impression, because it had never had to address the activity/inactivity argument put forth by the plaintiffs.

The U.S. government responded that the ACA does not violate the Commerce Clause because, first, the economic decisions that the ACA regulates regarding payment for health care services have a direct and substantial impact on the interstate health care market, and, second, the individual mandate is essential to the ACA's regulation of the business of health insurance, an interstate activity.

The court agreed with the government, stating the decision by the plaintiffs to forgo insurance coverage in favor of paying for health care out-of-pocket would drive up the cost of health insurance, shifting the cost to health care providers, and driving up taxes. The court pointed out that the health care market is different from other markets, in that no one can ever ensure that he or she will never participate in it. The plaintiffs did not demonstrate inactivity with regard to the health care market, said the court. If they chose to forgo insurance, they would be making an economic decision to try to pay for health care later, on their own. The court added that the Supreme Court has repeatedly rejected arguments that individuals who choose not to engage in commerce place themselves beyond the reach of the Commerce Clause.

Although other district courts will not be bound by the Eastern District of Michigan's decision, it is hard to believe that the court's twenty-page order will have no influence. The judge did, however, rule that the plaintiffs have standing to challenge the individual mandate provision of the ACA.

For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.


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