Obamacare Ruled Unconstitutional

The ruling breaks apart the obligation of individuals to carry health insurance, the section known as individual mandate.

WSJ

A federal judge ruled Monday that a central plank of the health law violates the Constitution, dealing the biggest setback yet to the Obama administration’s signature legislative accomplishment.

In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law’s requirement that most Americans carry insurance or pay a penalty “exceeds the constitutional boundaries of congressional power.”

The lawsuit, brought by Virginia’s attorney general, Republican Ken Cuccinelli, is the first court ruling against the law since President Barack Obama signed it in March. More than 20 federal lawsuits have been filed against the overhaul, and judges in two of those cases ruled in favor of the Obama administration.

While Monday’s decision creates a headache for the law’s supporters, it doesn’t mean that states or the federal government must stop implementing the law.

Judge Hudson didn’t grant the plaintiffs’ request for an immediate nationwide injunction against the entire law or against the requirement that most Americans carry insurance. That requirement begins in 2014.

The judge also said that his ruling only strikes down the requirement to carry insurance, known as the individual mandate, and the provisions of the law that are directly dependent on it.

The Supreme Court is ultimately expected to settle the issue after the Virginia case and other similar ones wind their way though the courts.

Obama administration officials say the ruling amounts to an attack on one of the law’s most popular provisions—the ban on insurers denying coverage to people with pre-existing health conditions. They say that piece of the law cannot work unless coupled with a requirement that nearly all Americans carry insurance.

The administration has played down the outcome of this particular case, characterizing it as having received outsize importance because of Mr. Cuccinelli’s visibility.

“We are confident that this law is constitutional, and we are confident that the Supreme Court when, and if, it hears this case will agree that it’s constitutional,” an administration official said.

For opponents of the law, Monday’s ruling is the first victory in a multifaceted attack designed to help Republicans take back the White House in 2012. Republicans see the court battle as one way to show their opposition to voters who have shown skepticism toward the law.

The health overhaul is designed to expand insurance to 32 million Americans by giving lower earners tax credits to help them buy insurance and widening eligibility for the Medicaid federal-state insurance program for the poor. Without the requirement to carry insurance, the Obama administration predicts, the law would leave an additional 16 million Americans uninsured.

Judge Hudson, of the Eastern District of Virginia, said the individual mandate “would invite unbridled exercise of federal police powers.”

He added: “At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it’s about an individual’s right to choose to participate.”

Separately, federal Judge Roger Vinson in Pensacola, Fla., will hear arguments Thursday in a challenge brought by officials in 20 states, and he could offer the clearest indication yet of how he will rule.