In his decision today, Judge Hudson took a number of controversial--defensible, for sure, but controversial--steps in concluding that the minimum coverage requirement exceeds Congress's enumerated powers. Among other things, he concluded that (1) the conduct regulated by ACA 1501(b) constitutes "inactivity," (2) Congress categorically lacks the authority to regulate inactivity, even when doing so is integral to the success of a broader scheme regulating interstate commerce, (3) the Necessary and Proper Clause does not augment Congress's commerce power, at least in this respect, and (4) whether federal legislation constitutes a "tax" or a regulation turns on Congress's intent (as expressed in various objective markers).
Lying beneath these specific doctrinal points, though, is a more basic, foundational one: that the federal government's arguments in support of the minimum coverage requirement "lack logical limitation." In other words, the federal government failed to convince Judge Hudson that there was any limiting principle in its interpretation of Congress's enumerated powers.
This is a serious problem for the United States--probably the single biggest problem it faces if it hopes to fare better in the courts of appeals as this litigation proceeds. As Virginia, the states in the Florida lawsuit, and every other plaintiff in the 20-odd other lawsuits challenging the ACA have argued, the government's understanding of the commerce power could effectively permit Congress to require Americans to purchase anything. The auto industry is in financial trouble? Require all Americans to purchase cars. The housing bubble is collapsing? Require all Americans to spend a certain amount per month for minimally adequate shelter. And so on. These sorts of provisions could easily be billed as "essential provisions" that are "integral to a broader regulatory scheme," which scheme plainly regulates interstate commerce (such as the automobile industry or the housing market).
Viscerally, most federal judges (not to mention, most lawyers and most Americans) believe that this cannot be right. Congress cannot have the authority, as a general rule, to mandate individuals to purchase goods or services from private vendors as a means of regulating the larger market in that good or service. This is simply not an acceptable understanding of the Commerce Clause, at least if the government is interested in five votes at the Supreme Court.
Thus, the key for the federal government, it seems to me, is to convince other judges (as it could not Judge Hudson) that the market for health insurance is unique--that the problems of adverse selection, and the fact that everyone will consume health care at some point, make the market for health insurance fundamentally different from any other context in which Congress might attempt to force individuals to purchase a good or service. This is the critical limiting principle that negates the states' claims of a slippery slope to unending federal purchasing mandates.
Can the federal government succeed in this respect? Who knows? But I think it is the essential pivot on which any United States victory in this litigation must turn.