By Sara Rosenbaum

After a spring and summer of warm-up action in multiple courts, the first judicial verdict is in: health reform is constitutional. In Thomas More v Barak Hussein Obama (Case No. 10-CV 11156, E.D. Mich., October 7, 2010), Judge George Steeh quickly disposed of plaintiffs’ claims that the Affordable Care Act was unconstitutional.

As in all federal court cases, the starting point is a determination as to whether the court has the power to hear the case at all, that is, whether the plaintiffs have suffered the type of legal “injury” that allows them to seek judicial redress and whether the case is ripe for review by a court. Finding that the plaintiffs had standing given the impact of the mandate on their current financial circumstances and that no further factual development was necessary before it entered the fray, the court then turned to the merits of the claims.

In Judge Steeh’s view, extensive United States Supreme Court precedent identifies two separate but related issues in determining the constitutionality of a law under the Commerce Clause. (Because the opinion holds that the Act falls squarely within the purview of the Commerce Clause, it was unnecessary in Judge Steeh’s view to consider whether the law was a separate constitutional exercise of Congress’ taxing and spending powers under the General Welfare Clause). The first issue focuses on whether the type of activity that a federal law seeks to regulate has a direct and substantial effect on interstate commerce, in this case, the national market for health insurance. The second issue is whether regulation of the individual activity is essential to the Act’s broader regulatory scheme.

Although the Thomas More plaintiffs, like those in Virginia and Florida attempt to characterize the law as one that regulates economic inactivity, the court had no problem finding that the conduct – the decision to go without health insurance – was precisely the type that is reachable under the Commerce Clause. In the court’s view, “[t]he decision to forego health insurance coverage in preference to attempting to pay for health care out of pocket” is “plainly economic” and has a direct impact on the national market for health insurance; some $43 billion in cost-shifting occurs annually as a result. Flatly rejecting the assertion that the uninsured exist outside of the market, Judge Steeh concluded that all persons are “inseparable and integral members of the health care market” and furthermore, that “living breathing beings” cannot opt out. Everyone needs health care; how to pay for it is the type of economic decision that lies well within Congress’ reach.

As to the second issue – whether the mandate is part of a larger regulatory scheme, the court placed the obligation to secure coverage at the heart of the Act, finding that the mandate is explicitly designed to address insurance stabilization and the problem of cost-shifting. Without the mandate, the broader market regulations, including the bar against discrimination based on health status would not be possible; as long as people can remain outside of the insurance system, the conditions for market stability cannot exist, and costs inevitably will spiral out of control for those who do buy coverage. It was the “prospect of driving the insurance market into extinction that led Congress to find that the minimum coverage provision was essential” to the Act’s larger regulatory scheme.

The constitutional odyssey that the Affordable Care Act is traveling will continue, quite possibly for years to come. But the court’s plain-spoken analysis cuts to the heart of the matter and is the last word — for the moment.