On August 12, 2011, the U.S. Court of Appeals for the Eleventh Circuit held that the individual mandate provision in the Patient Protection and Affordable Care Act (“Act”) is an unconstitutional exercise of Congress’ power under the Commerce Clause of the United States Constitution. However, the court refused to hold the entire Act unconstitutional, ruling instead that the individual mandate provision is severable from the rest of the Act. The decision creates a circuit split because it conflicts with the recent decision by the U.S. Court of Appeals for the Sixth Circuit, which rejected a challenge to the individual mandate provision’s constitutionality.

In its analysis, the Eleventh Circuit stated that the individual mandate provision is unprecedented, expansive in scope, and does not contain cognizable limits. The court found that there is not a sufficient nexus between decisions to abstain from purchasing health insurance, even in the aggregate, and commerce. It concluded that “what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.” The court also held that because the penalty under the individual mandate provision is a regulatory penalty and not a tax, the provision is not a valid exercise of congressional power under the Taxing and Spending Clause.

In determining that the individual mandate provision is severable and refusing to invalidate the entire Act, the court acknowledged the presumption of severability and reasoned that the rest of the Act would have passed Congress even without inclusion of the individual mandate provision. In addition, the court upheld the Act’s expansion of Medicaid eligibility, finding that it is not unduly coercive to the states, especially because the federal government, and not the states, will bear most of the costs of the expanded enrollment. The lawsuit was brought by 26 states, two private citizens and the National Federation of Independent Business.

For the full text of the decision, please go to http://www.uscourts.gov/uscourts/courts/ca11/201111021.pdf.