Appeals Court Rules Individual Mandate Unconstitutional

August 12, 2011

A U.S. appeals court in Atlanta ruled today that the “individual mandate” in the Affordable Care Act that requires Americans to purchase health insurance or face penalties is unconstitutional. The decision stated that the individual mandate “exceeds Congress’s enumerated commerce power.”

The three judge panel of the 11th Circuit Court of Appeals was divided 2 to 1 in their ruling. While the court struck down the individual mandate, it overturned an earlier decision that voided the entire health-care law, stating that remaining provisions are “legally operative.”

Seen as a victory for the 26 states that challenged the law, some are calling this a big defeat for the Obama administration’s battle over health care. However, losing the individual mandate may not be critical to the success of the ACA. See this post from our CEO Bryce Williams on his blog: “The Individual Mandate Doesn’t Matter” where he makes the case that there are other effective ways to incentivize people to buy health insurance; for example, he argues that an annual enrollment period like that used for Medicare would be very effective.

So what’s next? Today’s ruling conflicts with the June decision by the appeals court in Cincinnati that upheld the law. A third appeals court ruling is due soon from the 4th Circuit Appeals Court in Richmond, VA. Despite the outcome in Atlanta today, it’s clear that this issue will end up going to the U.S. Supreme Court for a final decision. Whichever side of the debate you’re on, there’s plenty of excitement ahead. Stay tuned!

Visit Extend Health — the nation’s largest private Medicare exchange.

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