A federal district court ruling that a core provision of the health care reform law is unconstitutional, if upheld eventually by the Supreme Court, won't have a major direct effect on the law's information technology provisions, according to an attorney following the case.

But the ruling--that the reform law unconstitutionally mandates individuals to obtain health insurance and face tax penalties if they do not--if upheld would make the entire law's economic sustainability questionable, says Howard Burde, principal at Howard Burde Health Law LLC in Wayne, Pa.

Judge Henry Hudson of the U.S. District court for the Eastern District of Virginia in Richmond ruled: "While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate--and tax--a citizen's decision not to participate in interstate commerce. Neither the U.S. Supreme Court nor any circuit court of appeals has squarely addressed this issue. No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person's decision to not purchase a product, notwithstanding its effect on interstate commerce."

The ruling, in the case of Commonwealth of Virginia v. Kathleen Sebelius, is one of several lawsuits filed against the reform law. The Supreme Court eventually will have the final say.

Judge Hudson severed the individual mandate from the rest of the law, which means declaring the mandate unconstitutional does not make the rest of the law unconstitutional, attorney Burde says. The ruling, however, could affect the requirement that states build Web-based health insurance exchanges to aid consumers in comparing and buying insurance policies. "My sense is the exchanges probably could exist without an individual mandate," Burde contends.

Absent the mandate, however, it may not make sense for many provisions of the reform law to continue. The mandate is the linchpin of the law, which imposed many new demands on insurers but promised them tens of millions of uninsured individuals coming onto the insured rolls.

That, theoretically, made it financially feasible to require insurers to offer multiple types of insurance, cover certain adult children on their parent's policies and outlaw pre-existing conditions and lifetime limits on coverage. Further, Burde notes, the law caps the premium ratio between young and older individuals. But if the young aren't mandated to get insurance, does the cap still work?

The bottom line is that the entire law is predicated on the individual mandate, so all provisions, including those covering insurance exchanges, operating rules for HIPAA transactions and other I.T. provisions could be affected, Burde believes. "There's no direct implication for I.T. provisions. But if the economics are upset by the absence of a mandate, the rest of the law won't work."

All parties for and against the reform law know that challenges to the individual mandate and other provisions eventually will end up in the Supreme Court, and there are legitimate constitutional questions, Burde says. "If the ruling is upheld, then I think the whole law has to be rethought."

Judge Hudson's decision is available on the CNN Web site.

--Joseph Goedert

 

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