Florida Federal District Judge Rules Affordable Care Act Unconstitutional

On January 31, 2011, U.S. District Judge for the northern district of Florida, Roger Vinson, declared the entire Affordable Care Act as unconstitutional.  This was the latest ruling in the numerous lawsuits against the federal government in 26 states over the healthcare reform legislation signed into law by President Obama in 2010.  The lawsuits challenge the “Individual Mandate” provisions that require all Americans to have healthcare insurance or pay a tax penalty.  The lawsuits maintain that this exceeds the authority provide to the federal government by the U.S. Constitution’s Commerce Clause and that people cannot be required to engage in a commercial act, i.e., buy health insurance.

This latest ruling in Florida goes one step beyond the December 13, 2010, ruling by Federal Judge Henry Hudson in Richmond, Va., which also said the “Individual Mandate” was unconstitutional. However, the Virginia ruling addressed only that one provision of the law and not the law in its entirety.  The Florida ruling goes beyond the Virginia decision to say that the healthcare reform law is not “severable” and that, therefore, the entire law is unconstitutional.  “Severability” is a clause that says if one provision of a law is found to be unconstitutional or invalid the remainder of the law may continue to apply.  The Accountable Care Act did not have a “Severability Clause” and so it was the Florida judge’s opinion that because “Individual Mandate” exceeded the authority of the Commerce Clause, the entire law has to be declared unconstitutional.  

 Two other federal judges have ruled that the “Individual Mandate” provision is constitutional.  Other states that joined the lawsuit against the federal government include: Alabama, Alaska, Arizona, Colorado, Georgia, Indiana, Idaho, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.  The fact that “Individual Mandate” is not “severable” is the result of an error when Congress drafted the final version of the law.

The requirement that all individuals must have healthcare insurance or pay the tax penalty, which would not take effect until 2014, is essential to paying for healthcare reform because the bill also expanded healthcare coverage provided under the Medicaid Program to some 30 million low-income Americans.  Therefore, if the “Individual Mandate” is ruled unconstitutional by the Courts, the “severability” issue is implied in effect and the remainder of the healthcare law continues, this ruling could significantly undermine the hoped for savings attributed to the healthcare reform effort.

 The Obama Administration strongly disagrees with the Florida and Virginia court decisions and, while the lawsuits in the other cases continue to come to trial, the Administration will no doubt challenge these two rulings.   Judge Vinson did not enjoin the law, which means implementation will continue as scheduled.  The case is expected to go to the US Supreme Court for resolution and that is not expected to happen until at least 2012.

So, do you think these legal challenges will have any impact on EHR implementations or just provide more distractions in the marketplace?