Obama Administration Seeks PPACA Ruling Stay

Vinson also has ruled that, because PPACA has no "severability" clause declaring that the act as a whole remains in effect even if one part is declared unconstitutional, a finding that one portion is unconstitutional makes the entire act unconstitutional.

Vinson did not issue an injunction blocking implementation of the law, but the decision appears to give the 26 states that joined the case the authority to stop implementation.

Virginia sued separately March 23, 2010, and Oklahoma filed its own suit Jan. 21. A U.S. District judge in Richmond, Va., Henry Hudson, ruled in November 2010 that the mandate provision is unconstitutional, but he did not void the rest of the law. The Justice Department has appealed Hudson's decision to the 4th U.S. Circuit Court of Appeals.

REACTIONS

Stephanie Cutter, a White House advisor, says in a White House blog entry that Vinson's decision "contradicts decades of Supreme Court precedent that support the considered judgment of the democratically elected branches of government that the act's individual responsibility provision is necessary to prevent billions of dollars of cost-shifting every year by individuals without insurance who cannot pay for the health care they obtain."

Peter Marathas Jr., a lhealth care awyer in the Boston office of Proskauer Rose L.L.P., says Vinson's decision is "thoughtful and well-considered."

Vinson "clearly knows his constitutional law and lays out a remarkable summary of the commerce clause's judicial interpretive history to reach the conclusion that it is in fact … the Congress that was over-reaching when it passed a law requiring citizens to purchase a private product," Marathas says. "In the end, the decision is less about health care than it is about federalism and states' rights. The fact that a majority of the states signed on to the Florida case demonstrates that more than half of the states in this country believe that PPACA intrudes into authority not properly with the federal government."

Analysts at Washington Analysis, Washington, predict in a note to investors that the controversy could reach the U.S. Supreme Court in late 2012.

"In the end, we give slight odds that the Supreme Court upholds the law's individual mandate as constitutional," analysts Ira Loss and Beth Mantz-Steindecker write.

Even if the Supreme Court rules that the individual mandate is unconstitutional,

it could let the rest of the Affordable Care Act stand, the analysts say.

"Under that scenario–where the individual mandate is found unconstitutional but the rest of the law stands–insurers, drug makers, providers, [pharmacy benefits managers] and distributors would suffer because they would fail to see the expected increased business from higher volumes while some sectors would still be subject to the excise fees and reimbursement cuts required by the law," the analysts say.

Joel Wood, senior vice president for government affairs at the Council of Insurance Agents and Brokers (CIAB), Washington, says the CIAB likes the linkage in Vinson's ruling between the individual and employer mandates and the rest of the act.

"Without a working mandate, the law's universal coverage aspirations will never be achieved, and adverse selection will make the private health insurance marketplace implode," Wood says. "Pulling out the individual mandate isn't sufficient to correct the very significant defects of this law."