June 8, 2011 / 11:35 PM / in 6 years

Factobx: Key arguments in healthcare appeal case

(Reuters) - Lawyers for President Barack Obama and plaintiffs representing 26 states presented oral arguments on Wednesday in an appeal over the government’s healthcare reform law, a contentious cornerstone of Obama’s presidency.

Here are the central arguments presented to the 11th Circuit Court of Appeals in Atlanta:

KEY GOVERNMENT ARGUMENT

Senior administration lawyer Neal Katyal said the law is based on solid constitutional grounds because:

a) The bill’s requirement that everyone must buy health insurance is an issue of interstate commerce, which Congress has the power to regulate under the constitution.

b) Without this requirement, the government’s ability to regulate the health insurance market would be undercut.

c) The act will reduce the federal deficit.

“Those three findings set up three different independent constitutional bases for the act and each becomes even weightier still when viewed alongside the current standard rule that a strong presumption of constitutionality inheres to acts of Congress,” he said.

KEY ARGUMENT BY PLAINTIFFS

Former Solicitor General Paul Clement, arguing on behalf of states seeking repeal, said the commerce clause of the Constitution had never been used by a government to compel citizens to enter the market and purchase something they might not otherwise have done.

“There’s a great deal about this case that is complicated but I think that the constitutional issue at the heart of it with respect to the individual mandate is actually quite simple. It boils down to the question of whether or not the federal government can compel an individual to engage in commerce the better to regulate the individual,” Clement told the court.

“We don‘t, Judge Marcus, have a case that’s directly on point ... For 220 years, Congress never saw fit to use this particular power. I would say that’s a rather astonishing fact,” he said in an opening statement.

SEVERABILITY

The court addressed the issue of whether the whole law would be rendered invalid if the individual mandate provision was declared unconstitutional.

Florida District Judge Roger Vinson in January declared the law invalid for this reason, though he allowed implementation to proceed pending the appeal.

INDIVIDUAL MANDATES

The court asked whether the government has the power under the commerce clause of the Constitution to compel an individual to purchase health insurance.

The so-called individual mandate is a cornerstone of the law, requiring Americans to buy health insurance by 2014 or face a fine equal to 2.5 percent of their income.

The government argues that without this provision healthy individuals will opt not to buy insurance, raising the cost of insurance and making the system unworkable.

Argument revolved around the question of whether the government was compelling anyone and whether by not purchasing insurance people were still making an economic decision.

Chief Judge Joel Dubina asked what the limits of Congress’ power would be if the court upheld the individual mandate.

Katyal said the reform called for in the law was necessary because of the cost shifting that occurs when the uninsured seek health care.

He cited a congressional finding that $43 billion in costs were being shifted to taxpayers because of uncompensated care, increasing average family health premiums by a thousand dollars annually.

“We’re not saying that Congress can force someone to buy something and the failure to do so is economic activity,” Katyal said.

“Our point is that people are seeking this good already in untold numbers ... and that the failure to pay for that good when they seek it is what causes the cost shifting.”

Writing by Matthew Bigg and Karen Jacobs, editing by Cynthia Osterman

Our Standards:The Thomson Reuters Trust Principles.
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