It said government does not have power to require all Americans to have insurance.
WASHINGTON - A federal appeals court struck down a pillar of President Obama's national health care law, ruling that Congress does not have the power to require all Americans to buy health insurance and setting the stage for a Supreme Court decision ahead of the 2012 elections.
The 2-1 decision is a victory for Republican leaders in 26 states who had challenged the law last year, testing whether the signature accomplishment of Obama's presidency will stand. The Atlanta-based judges echoed the complaint that the mandate represents an "unprecedented" expansion of federal power.
"The individual mandate is breathtaking in its expansive scope," the two judges of the 11th Circuit Court of Appeals wrote in the 207-page majority opinion. It said Congress cannot "mandate that individuals enter into contracts ... for the purchase of an expensive product from the time they are born until the time they die."
While Congress may regulate those who buy insurance, it may not regulate those who "have not entered the insurance market and have no intention of doing so."
About 50 million Americans lack basic health insurance. As a result, hospitals and taxpayers are forced to pay about $43 billion a year to cover the costs of those who cannot pay. Many health care experts believe an insurance mandate is crucial to not only controlling this cost-shift but also guaranteeing that all Americans can get insurance, a right provided by the new law.
Without such a requirement, consumers would be able to wait until they were sick to buy insurance; that, in turn, would push up premiums. The White House, meanwhile, minimized the opinion, citing the divided rulings by multiple courts. "Today's ruling is one of many decisions ... we will see in the weeks and months ahead," Assistant to the President Stephanie Cutter wrote. "In the end, we are confident the act will ultimately be upheld."
But Senate Minority Leader Mitch McConnell, R-Ky., said the ruling "only strengthens and adds more momentum to the efforts of those of us who are working to repeal."
But it was not a total victory for the challengers. The appeals court rejected the states' claim that Congress went too far by expanding the Medicaid program for low-income Americans. The judges also agreed the rest of the law can stand, even if the insurance mandate is struck down.
The court has a conservative reputation and had been seen as the best forum for those challenging the law. The majority was made up Chief Judge Joel Dubina, an appointee of President George H.W. Bush, and Judge Frank Hull. She was appointed by President Bill Clinton. Judge Stanley Marcus, a Clinton appointee, dissented, saying" "Congress rationally concluded that the uninsured's consumption of health care services shifts enormous costs unto others ... and the individual mandate directly addresses this cost-shifting problem."
In June, the Obama administration prevailed before the appellate court in Cincinnati, which in a split opinion ruled that the mandate represented a constitutional exercise of Congress' authority to regulate commerce. A third challenge is pending in the 4th Circuit in Richmond, Va., with a decision expected soon. The Supreme Court will almost certainly decide the law's constitutionality. Friday's decision seemed to seal the deal, because the most important factor in whether the court accepts a case is whether lower courts are split on a constitutional question. But when the court could hear the case was not clear.
The administration could appeal the decision to the full 11th Circuit, which could delay any Supreme Court ruling until after the 2012 election. It also could appeal directly to the Supreme Court. If an appeal petition is filed during the fall, the justices are likely to hear the case early next year and rule by late June.
Striking down the mandate could have dramatic consequences if insurance premiums surge, as many experts fear. That could put more pressure on the federal treasury because millions of Americans are expected to qualify for federal subsidies starting in 2014 to help them buy insurance.
The Washington Post contributed to this report.