On February 22, United States District Judge Gladys Kessler for the District of Columbia ruled in favor of the constitutionality of the “individual mandate” provision in the Patient Protection and Affordable Care Act (PPACA), and dismissed the lawsuit brought by individual plaintiffs for failure to state a claim (Mead v. Holder).

The plaintiffs contested § 1501 of the PPACA, titled the “Requirement to Maintain Minimum Essential Coverage,” and commonly referred to as the “individual mandate,” which requires individuals to obtain health care coverage or a pay a monetary penalty. The plaintiffs argued that the federal government lacks the constitutional authority to impose this requirement.

The court upheld the constitutionality of the individual mandate, and concluded that the federal government has the authority under the commerce clause to regulate an individual’s decision to purchase health insurance. In reaching this conclusion, the court found that the decision to purchase health insurance is “economic” in nature because the decision to purchase health insurance, as well as the decision not to purchase health insurance, relates to the consumption of a commodity—a health insurance policy. Further, the court highlighted the cost-shifting effect—uninsured individuals shift the uncompensated health care costs to other health care market participants, the federal and state governments, and American taxpayers, in finding that the individual decision to forgo health insurance, when considered in the aggregate, is an activity sufficiently related to interstate commerce.

This ruling brings the score 3 to 2, in favor of constitutionality. Two prior district court decisions in the Thomas More and Liberty University cases upheld the same PPACA provision as a lawful exercise of congressional power, and more recently, the Florida and Virginia cases ruled the provision unconstitutional. Faegre & Benson will continue to provide updates on this evolving litigation.