ATLANTA – While two appellate judges feared that if Congress can force citizens to buy health insurance it can force them to buy anything, a third judge figured Congress already earned that right.
Their Aug. 12 opinions on the individual mandate in the health care law dramatize the national tension between government growth and individual rights.
Eleventh Circuit Chief Judge Joel Dubina and Judge Frank Hull wrote that every day, Americans decide what products to buy.
They wrote, "The government contends that embedded in the Commerce Clause is the power to override these ordinary decisions and redirect those funds to other purposes.
"The government's position amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point in their life.
"This theory affords no limiting principles in which to confine Congress's enumerated power."
Judge Stanley Marcus wrote that Dubina and Hall "ignored many years of Commerce Clause doctrine developed by the Supreme Court."
He wrote,"Congress's commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy.
"The individual mandate was enacted as part of a broad scheme to regulate health insurance and health care services, industries already heavily regulated by Congress.
"The sheer size of the programs Congress has created underscores the extensiveness of its regulation of the health insurance and health care industries.
"There is simply no requirement under the Commerce Clause that Congress choose the least restrictive means at its disposal to accomplish its legitimate objectives."
Dubina and Hall partially affirmed Senior Judge Robert Vinson of Pensacola, Fla., who found the mandate unconstitutional.
They reversed his decision to invalidate the entire law, finding they could sever the mandate from it without harming it much.
Dubina and Hall wrote that Congress found individuals consciously decide to forego insurance and try to insure themselves.
They wrote,"Congress determined that the decision by the uninsured to forego insurance results in a cost shifting scenario."
They quoted findingsof Congress that some uninsured persons fail to pay the full costs of care,providers shift costs to insurers, and insurers raise premiums to spread thecosts.
They estimated annual cost shifting at $43 billion, 1.7 percent of the nation's $2.5 trillion healthcare bill.
They wrote that the health care law exempts persons with religious reasons, aliens not legally present in the country, and incarcerated persons.
They wrote that penalties for failure to insure won't apply to Indian tribes, those with gaps shorter than three months, two categories relating to income, and hardship cases.
They wrote that penalties would be a flat rate or a percentage of income.
They wrote that the penalty would equal $95 in 2014, $325 in 2015, and $695 in 2016.
"The government submits that Congress has mandated only how Americans finance their inevitable health care needs," they wrote.
"The plaintiffs stress that Congress's authority is to regulate commerce, not to compel individuals to enter into commerce so that the federal government may regulate them," they wrote.
They wrote that parties and many commentators focused on the distinction, but they found it useful only to a point.
"Properly formulated, we perceive the question before us to be whether the federal government can issue a mandate that Americans purchase and maintain health insurance from a private company for the entirety of their lives," they wrote.
"Few powers, if any, could be more attractive to Congress than compelling the purchase of certain products," they wrote.
They wrote that Congress never required the purchase of wheat or war bonds, forced a higher savings rate or required Americans to buy more fuel efficient automobiles.
"From a doctrinal standpoint, we see no way to cabin the government's theory only to decisions not to purchase health insurance," they wrote.
They wrote that "we are unable to conceive of any product whose purchase Congress could not mandate under this line of argument.
"Although any decision not to purchase a good or service entails commercial consequences, this does not warrant the facile conclusion that Congress may therefore regulate these decisions pursuant to the Commerce Clause.
"Under the government's proposed limiting principles, there is no reason why Congress could not similarly compel Americans to insure against any number of foreseeable but serious risks.
"To give but one example, Congress could undoubtedly require every American to purchase liability insurance, lest the consequences of their negligence or inattention lead to unfunded costs (medical and otherwise) passed on to others in the future.
"Ultimately, the government's struggle to articulate cognizable, judicially administrable limiting principles only reiterates the conclusion we reach today: there are none."
They wrote that illegal aliens and other nonresidents shift $8.1 billion, but are entirely exempt from the mandate.
They wrote that low income persons shift $15 billion, but expansion of Medicaid will cover them.
They wrote that persons who couldn't obtain insurance due to preexisting conditions shift $8.7 billion, but the law guarantees them coverage.
They wrote that persons with insurance shift $3.3 billion, by failing to pay deductibles and copayments.
"In reality, the primary persons regulated by the individual mandate are not cost shifters but health individuals who forego purchasing insurance," they wrote.
Congress confirmed this, they wrote, by finding that the mandate would broaden the risk pool to include healthy individuals.
"The individual mandate forces healthy and voluntarily uninsured individuals to purchase insurance from private insurers and pay premiums now in order to subsidize the private insurers' costs in covering more unhealthy individuals under the Act's reforms," they wrote.
"Congress sought to mitigate its reforms' regulatory costs on private insurers by compelling healthy Americans outside the insurance market to enter the private insurance market and buy the insurers' products," they wrote.
Though the government called the mandate essential to broader regulation, Dubina and Hull found that components of the Act undermined the claim.
"Congress itself carved out eight broad exemptions and exceptions to the individual mandate and its penalty that impair its scope and functionality," they wrote.
"Those who pay the penalty one year instead of purchasing insurance may still get sick the next year and then decide to purchase insurance, for which they could not be denied," they wrote.
"Additionally, Congress has hamstrung its own efforts to ensure compliance with the mandate by opting for toothless enforcement mechanism," they wrote.
"Thus, to the extent the uninsureds' ability to delay insurance purchases would leave a 'gaping hole' in Congress's efforts to reform the insurance market, Congress has seen fit to bore the hole itself," they wrote.
They concluded, "It cannot be denied that the individual mandate is an unprecedented exercise of congressional power.
"The statutory language of the mandate is not tied to health care consumption – past, present or in the future.
"Rather, the mandate is to buy insurance now and forever.
"Although courts must give due consideration to the policy choices of the political branches, the judiciary owes its ultimate deference to the Constitution."
Dissenter Marcus wrote that the uninsured pay only 37 percent of their costs out of pocket, while third parties pay 26 percent on their behalf.
"The remaining costs are uncompensated – they are borne by health care providers and are passed onin the form of increased premiums to individuals who already participate in the insurance market," he wrote.
"Congress's findings reflect its determination that this problem – the uncompensated consumption of health care services by the uninsured – has national economic consequences that require a national solution through comprehensive federal regulation," he wrote.
"Congress's commerce power includes the power to prescribe rules cutting across the two linked markets of health insurance and health care services," he wrote.
"Both the congressional intent to link the two and the empirical relation between the purchase of health insurance and the consumption of health care services are clear," he wrote.
"When the individual mandate is viewed through a more pragmatic and less stilted lens, it is clear that Congress has addressed a substantial economic problem: the uninsured get sick or injured, seek health care services they cannot afford, and shift these unpaid costs onto others," he wrote.
"There is nodoctrinal basis for requiring Congress to wait until the cost shifting problem materializes for each uninsured person before it may regulate the uninsured as a class," he wrote.
"Each of us remains susceptible to sudden and unpredictable injury," he wrote.
"No one can opt outof illness, disability, and death," he wrote.
"Congress concluded that the total incidence of health care consumption by the uninsured threatened the national health insurance and health care services markets," he wrote.
"Congress may broadly regulate uninsured individuals because it may be difficult to distinguish between cost shifters and non cost shifters," he wrote.
He wrote that there was nothing irrational about a decision "to subject to the mandate those individuals who could reasonably afford health insurance in the first place."
He wrote that the majority attached great significance to the unprecedented nature of the legislation before them.
"Every new proposal is in some way unprecedented before it is tried," he wrote.