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First court test favors Obamacare

By Jay MacDonald · Bankrate.com
Friday, October 15, 2010
Posted: 10 am ET

In the first court test of the mandatory insurance provision of the health care reform package, a U.S. District judge upheld the right of Congress to require Americans to purchase minimum health insurance coverage.

The ruling came last week in response to a lawsuit filed in Michigan by the Thomas More Law Center, which sought an injunction against the Affordable Care Act, or ACA, provision that will force Americans to purchase health insurance by 2014 or face a penalty. The plaintiff argued that such a move would exceed Congressional authority and amount to an unconstitutional tax.

But in a 20-page decision, U.S. District Judge George Steeh ruled that Congress had the authority to enact the law under the Commerce Clause of the U.S. Constitution and therefore could also impose a penalty to enforce compliance.

Quoting the decision: "The minimum coverage provision, which addresses economic decisions regarding health care services that everyone eventually, and inevitably, will need, is a reasonable means of effectuating Congress's goal."

In the Detroit courtroom, Steeh expounded:

"Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times. As a result, the most costly individuals would be in the insurance system and the least costly would be outside it. In turn, this would aggravate current problems with cost-shifting and lead to even higher premiums."

Steeh dismissed the two claims but left four others pending, including a claim that the ACA violates the plaintiff's constitutional rights because federal tax dollars would be used to fund abortions.

The Thomas More Law Center vowed to appeal the ruling.

Twenty states have joined in a lawsuit in Florida to challenge the ACA on constitutional grounds. Yesterday, U.S. District Judge Roger Vinson ruled that that case can move forward and scheduled arguments for Dec. 16.

Do you think the Michigan ruling will impact the states' case?

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