Legal Scholar: PPACA Insurance Mandate at Risk

In a late-breaking NEJM editorial, legal scholar Mark Hall responds to the recent decision by Federal Judge Henry Hudson on PPACA's insurance mandate. On December 13, Hudson notably concluded that Congress lacks the authority to require the purchase of individual health insurance, because Congress (under the Commerce Clause) doesn't have the power to regulate "inactivity." 

This route to knocking down PPACA (or at least the individual insurance mandate on which PPACA rests) complements a closely related argument: That Congress doesn't have the authority to levy a penalty for not buying insurance. But PPACA supporters counter that the associated penalty is really a tax—which Congress clearly has the authority to impose. For spectators (namely, the vast majority of Americans like me), it appears that much of the judicial wrangling around the insurance mandate will rest on this semantic point*: Whether the fine imposed by the government for not purchasing health insurance is a penalty or a tax.

In a previous NEJM piece, Yale law professor Jack Balkin implied a Constitutional slam dunk for PPACA and the tax argument. But with Hudson's ruling, Mark Hall isn't so sanguine about the mandate's future (as the issue will inexorably wend its way through the federal court system). Nevertheless, Hall notes that there is a long judicial precedent for giving serious leeway to Congress when it comes to interstate commerce—like the commerce of health insurance. And negating PPACA's insurance mandate can't necessarily be done in isolation. Hall writes,

[T]he Court must also decide whether to strike the accompanying insurance regulations and subsidies, which are much more popular and clearly within congressional power. Judge Hudson struck only the individual mandate, “severing” it from the rest of the [PP]ACA. But because the [PP]ACA’s ban on medical underwriting would wreak havoc on the marketplace without the mandate, other judges might feel torn between striking both and letting both stand.

PPACA = Patient Protection and Affordable Care Act.

* In addition to Hudson's "inactivity" argument.