Obamacare Survives a Huge Constitutional Challenge

President Barack Obama’s healthcare (NYSE:XLV) legislation is constitutional … so far. The challenge was focused on the insurance mandate and the argument the government has no right to force anyone into purchasing a service or product. The U.S. Court of Appeals, the third appellate court to rule, upheld the measure Obama signed into law in March 2010 by a 2-1 vote.

“Congress reasonably determined that as a class, the uninsured create market failures; thus, the lack of harm attributable to any particular uninsured individual, like their lack of overt participation in a market, is of no consequence,” Judge Laurence Silberman wrote. The five people who filed the lawsuit in Washington in June 2010 — which has since been dismissed — argued that the government has no right to compel Americans to buy anything, and claim that they and their families could face combined tax penalties of more than $27,000 if they fail to obtain insurance.

Silberman, an appointee of Republican President Ronald Reagan, voted with U.S. Circuit Judge Harry Edwards, an appointee of Democrat Jimmy Carter, to uphold the Patient Protection and Affordable Care Act act, rejecting arguments that Congress lacked the power to enact the legislation. Agreeing with government lawyers, Silberman said the health-care market is unique in that “virtually everyone will enter or affect it and because the uninsured inflict a disproportionate harm on the rest of the market,” when they require care.

“The Washington appeals court may be the last to rule on the law before the U.S. Supreme Court takes it up. The Obama administration asked the high court to review an Aug. 12 ruling by the appeals court in Atlanta, which found the insurance mandate is unconstitutional,” according to Bloomberg.

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