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Saturday, October 16, 2010

Obamacare -- Is it constitutional?

I have now had a chance to read the court's decision in the case brought by Florida and a host of other states and individuals against the federal government seeking to strike down portions of obamacare as unconstitutional. The decision was rendered on the federal government's motion to dismiss the case for a number of grounds. The results make clear that in this trial court, at least, Obamacare is in trouble.

The Court allowed two of the six causes of action to proceed towards trial. In one, the plaintiffs seek to strike down the individual mandate that requires all people to buy health insurance or pay a penalty as being beyond the scope of congress' authority under the Commerce Clause. The court announces that there are no other cases where congress has regulated inaction as being part of interstate commerce and allows the claim to proceed. I will not thrill you with the analysis of the court, but based upon what he says in the decision, there seems to me to be no way for the federal government to avoid having this court strike down the individual mandate.

The second claim that the court allowed to proceed is that by increasing the numbers of folks who must be included in Medicaid, the federal government coerced and controlled the sovereign states to undertake these larger programs with the result that the states will inevitably go broke paying for them. This kind of argument has not succeeded in the past so long as the state had the choice whether or not to follow the federal direction. Here, the states allege that they have no choice. If they pull out of Medicaid completely, they will be left unable to pay for the medical needs of their poor. If they follow the new program requirements, the will eventually be in the same position. The judge is allowing this claim to go forward towards a trial. I doubt whether the states will be able to prove that they have been deprived of a choice in actual fact.

Nevertheless, this decision is extremely important. It indicates that the individual mandate will most likely be struck down. Without that mandate, a big chunk of Obamacare will also crumble. Indeed, if nothing else gets done, the failure of the mandate will lead to even more hikes in premiums for those who will still keep their insurance.

It seems that the best way forward is to go back. Obamacare should be repealed and the process of dealing with healthcare begun again.

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