Obamacare Loses in Court, or Does It?

The health reform law suffered a significant defeat in court last week. A federal appeals court in Atlanta ruled that its mandate requiring everyone to have health insurance is unconstitutional.

Does this put Obamacare legally on the ropes? Not at all. The decision contains much more than the headlines may indicate. (Click here for the full text of the opinion.)

This is the second appeals court to rule on the issue. The first, located in Ohio, upheld the mandate in June. So, appellate decisions are now one for and one against the mandate. Of five lower courts that had considered the mandate, 3 ruled in favor and 2 against.

And, supporters of the law actually gained two important victories in the most recent ruling.

First, the mandate is only part of the law’s plan for expanding coverage. An equally important piece is Medicaid, the health insurance plan for the poor. Health reform extends this benefit to 16 million more people.

Opponents had challenged the Medicaid expansion as an unconstitutional burden on the states. The appeals court disagreed. It joined every other court that has considered this claim in rejecting it.

Second, the court found that the mandate is severable from the rest of the law. In other words, even if the mandate is unconstitutional, every other part of health reform remains in effect. This includes the insurance exchanges through which individuals will be able to buy coverage, consumer protections, cost control measures, and public health initiatives.

The decision may also have signaled a shift in the politics of the health reform legal challenges. Just as in the Ohio decision in June, one of the judges crossed party lines. This time, Judge Frank M. Hull, a Clinton appointee, ruled against the law.

The breach of partisan lines holds important implications for the law’s eventual consideration in the Supreme Court. An ideological divide there would doom the law in a 5-4 split. The trend in the appeals courts may signal that ideology is not the only force at work among judges.

Two other federal appeals courts – one in Virginia and one in Washington, D.C. – will also consider the health reform law before the Supreme Court has its say. We can look to these rulings for further clues as to the role that partisanship will play.

So, the legal status of health reform remains as unsettled as ever.

Supporters have not gained the slam dunk victories that some had predicted. But the outcomes so far have given opponents anything but the clear repudiation of the law that they have been hoping for.

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