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August 12th, 2011

Appeals Court Decision Puts Obama Health Law on the Ropes

The Court of Appeals for the 11th circuit ruled today in Atlanta that mandatory health insurance, a key provision of the Affordable Care Act, is unconstitutional. Although the court declined to rule the entire law null and void, the impact of the ruling will be wide ranging. It is a major decision, because the plaintiffs are 26 states – the most significant plaintiffs in any challenge thus far. In addition, a judge appointed by President Clinton joined a President George W. Bush appointee in ruling 2-1 against the administraton’s mandate. The Court of Appeals for 4th circuit based in Richmond has yet to rule on a separate challenge brought by the state of Virginia. One federal Court of Appeals for the 6th circuit upheld the constitutionality of the mandatory insurance provision, but the case is of far less consequence, because the plaintiff was a minor litigant, the Thomas More Legal Center, rather than a state.

The impact of the 11th circuit ruling is likely to be substantial and immediate: Many state governments will slow down or halt their preparations to implement state insurance exchanges as required under the law.

Pressure will build on the administration to scale back or repeal its two costly new health entitlements, which have not gone into effect yet: (1) a costly expansion of Medicaid eligibility and Medicaid benefits and (2) subsidies for people to pay for private health plans on state exchanges. The decision today blew a hole in a major source of revenue to fund these new entitlements. The the penalties on individuals who fail to enroll and employers who fail to provide it to their workers will go by the wayside along with the mandate. Without this revenue, the remaining provisions of the law create a large budget deficit.

This is good news for employers who have held off on hiring because of concerns about future mandatory health insurance requirements on employers. If this decision is confirmed by the United States Supreme Court next term, it will remove a barrier to job growth. Most important, this is a victory for individual liberty and limited government.

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About the Author

Betsy McCaughey
Betsy McCaughey, Ph.D., is a patient advocate and former Lt. Governor of New York State. She is a regular contributor to

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