Congress Can Regulate Health-Care Market, U.S. Argues to Appellate Court

Congress has broad power to regulate the health-care market, U.S. lawyers told the first federal appeals court to hear arguments on the validity of the insurance mandate in the Obama administration’s health-care overhaul.

A three-judge panel in Richmond, Virginia, today was asked to consider whether requiring most Americans to buy health insurance is, as a lower-court judge ruled, the same as ordering them to buy broccoli or a Cadillac.

“Congress is not asking people to buy something they otherwise would not buy,” said Acting Solicitor General Neal Katyal, adding that being an active participant in the health- care market is an “almost universal feature of our existence.”

In back-to-back arguments, the judges -- Diana Gribbon Motz, Andre Davis and James Wynn Jr. -- reviewed two lower court rulings on the law. One of the cases upheld the law; the other struck down part of it.

Motz asked Katyal whether a decision in favor of the law would lead to “unlimited” government power.

Katyal said there are two “rock solid” limits. The government may not act in an “attenuated way” and it may not infringe on states’ responsibilities.

National Market

“This is a market that is truly national in scope,” Katyal said.

“Congress is not asking people to buy something they otherwise would not buy,” said Acting Solicitor General Neal Katyal, adding that being an active participant in the health- care market is an “almost universal feature of our existence.” Photo:Alex Wong/Getty Images Close

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“Congress is not asking people to buy something they otherwise would not buy,” said Acting Solicitor General Neal Katyal, adding that being an active participant in the health- care market is an “almost universal feature of our existence.” Photo:Alex Wong/Getty Images

The U.S. calls the insurance mandate the linchpin of the Patient Protection and Affordable Care Act, claiming that the insurance industry won’t be able to meet its obligations for coverage under the law without expanding the pool of younger, healthier customers. Absent the mandate, the health-insurance market would wither, the government said in court papers.

Mathew Staver, arguing a challenge filed by Liberty University in Lynchburg, Virginia, said the law sought a “redistribution of wealth among private parties” and represented the first time under the U.S. Constitution’s Commerce Clause that Congress attempted to regulate “non- economic inactivity.”

So far, trial-court decisions on the statute have broken along party lines, with judges appointed by Republican presidents ruling against it and Democratic-appointed judges ruling in favor. All three judges randomly assigned to today’s case were appointed to the bench by Democratic presidents.

Obama Nominees

Davis and Wynn were nominated by President Barack Obama. Motz was appointed by former President Bill Clinton.

The judges today questioned Virginia’s right to be in court challenging the law. The U.S. argued that Supreme Court precedent restricts states from seeking to overturn federal laws that apply only to individuals.

E. Duncan Getchell Jr., Virginia’s solicitor general, spent most of his time defending the state’s right to sue.

“If we are going to be a government of limited and enumerated powers, then you have to have a forum to sort it out,” Getchell said. “If the federal courts are not the forum, then there’s no forum.”

The cases are Liberty University v. Geithner, 10-02347, and Commonwealth of Virginia v. Sebelius, 11-01057 and 11-01058, 4th U.S. Circuit Court of Appeals (Richmond).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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