Tuesday, September 13, 2011

A quick summary of Goudy-Bachman

Here is a short list of highlights from Judge Conner's decision declaring portions of the ACA unconstitutional:

* The action-inaction distinction is unhelpful, too reminiscent of prior distinctions under the Commerce Clause (direct-indirect, manufacturing-commerce) that the Court has ultimately abandoned.

* The individual mandate is anticipatory regulation. Whether the relevant market is the health care service market, as the government maintains, or the health insurance market, as the challengers maintain, ACA 1501 "seeks to regulate conduct prior to an uninsured’s entrance into either market." (p. 33 n.12)

* All prior exercises of the commerce power upheld by the Supreme Court have involved the regulation of persons who are "already engaged in commerce [and] active in the relevant interstate market." (pp. 33-34)

* The regulated individuals in Wickard and Raich, unlike those reached by the minimum coverage provision, had engaged in the "affirmative conduct of . . . obtaining or producing commodities with an interstate market." (p. 36)

* "Unless and until that point, an individual’s status as uninsured or “self insured”—whichever nomenclature one chooses to apply—has no effect whatsoever on interstate commerce." (pp. 37-38)

* Although the health care services market is unique, finding this to be a limiting principle, that would cabin what would otherwise constitute an almost limitless scope to the commerce power, has no basis in precedent, and the court is bound in this respect by stare decisis.

* The minimum coverage requirement, though clearly linked to the ACA's guarantee-issue and community-rating provisions, is not essential to the Act's broader regulation of the health insurance (or health care services) market. "The individual mandate is clearly not essential to [the ban on pre-existing condition exclusions for insureds under 19 years old], nor the Act’s other insurance reforms: its creation of health benefits exchanges, the imposition of penalties on employers who do not offer coverage or adequate
coverage to their employees, or the Medicaid expansion." (p. 43)

* The guarantee-issue and ban on preexisting condition exclusions are inseverable from the minimum coverage provision, and thus must also be declared void. "Congress clearly linked the individual mandate to the
guaranteed issue and preexisting conditions reform provisions because it is a partial funding source for these provisions.  Given the current structure of the Act, and with certain deference to the government’s perspective of Congress’s intent, the fate of the guaranteed issue reforms rises and falls with the minimum coverage provision.  Accordingly, the court finds that the minimum coverage provision, guaranteed issue, and preexisting condition provisions must be severed from the Act." (pp. 48-49)

Hence, the minimum essential coverage provision is unconstitutional. And because they cannot be severed from 1501, the provisions mandating community rating and banning exclusions based on preexisting conditions are also void.