Department of Justice Defends Health Reform Insurance Provision

On Wednesday, Department of Justice lawyers filed a brief arguing that U.S. residents who do not purchase health insurance pass on billions of dollars in costs to taxpayers, CQ HealthBeat reports.

The brief comes in response to a lawsuit challenging the federal health reform law that is being reviewed by the 11th Circuit Court of Appeals in Atlanta (Norman, CQ HealthBeat, 5/18).

Details of Lawsuit

Plaintiffs in the suit -- attorneys general and governors of 26 states, the National Federation of Independent Business and two individuals â€" argued that the individual mandate exceeds Congress' power to regulate interstate commerce.

In a ruling on Jan. 31, U.S. District Court Judge Roger Vinson agreed with the plaintiffs, and because he concluded that the mandate is "inextricably bound" to other provisions in the law, he invalidated it entirely.

Amid conflicting interpretations of his ruling, Vinson issued a stay, permitting implementation of the overhaul to continue in the 26 plaintiff states while the Obama administration pursued an appeal.

The appeals court in Atlanta then granted the administration's request to expedite an appeal. The court also announced that a randomly selected three-judge panel will hear oral arguments in the appeal on June 8 (California Healthline, 5/5).

Details of DOJ Brief

The DOJ brief states that the unpaid health care expenses incurred by uninsured individuals are passed on to other U.S. residents, which is "a burden on interstate commerce that plainly qualifies as substantial."

DOJ lawyers also noted in the filing that an individual's decision not to purchase insurance and to pass on these costs qualifies as an action.

In addition, the brief reiterates the Obama administration's argument that the penalty levied on those who do not purchase insurance qualifies as a tax (Daly, Modern Healthcare, 5/18).

The filing also argues that opponents of the reform law would impose "restrictions or penalties" on sick individuals who try to use medical services without paying. It continues, "Thus, under plaintiffs' scheme, the penalty for failing to maintain minimum coverage -- denial of treatment -- would be far more draconian than the tax penalty that Congress enacted" (CQ HealthBeat, 5/18).

The brief also countered a previous argument made by the plaintiffs that states would be unable to turn down additional federal money for the expansion of Medicaid under the overhaul.

The plaintiffs previously had argued that such funding was "impermissibly coercive," according to the AP/Miami Herald. However, the brief stated, "No court has ever invalidated a condition a federal spending on a 'coercion' theory, and several courts of appeals have rejected similar challenges to previous amendments to the Medicaid program" (Yost, AP/Miami Herald, 5/18).