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Health-care reform law set back, setting stage for Supreme Court showdown

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Instead, the appeals court said it would allow the rest of the reform law to remain undisturbed. That action preserves features of the ACA, including the directive that insurance companies may not refuse coverage because of preexisting medical conditions and a measure that allows parents to continue to insure their children into their 20s.

Friday’s decision stems from a lawsuit filed on behalf of 26 states and a business group challenging the constitutionality of the ACA.

The court rejected an argument by the states that the expansion of Medicaid under the ACA, which requires the states to administer a larger program, amounts to unconstitutional coercion of the states by the federal government. The panel also rejected the Obama administration’s argument that the ACA should be upheld under the government’s taxing powers. The court said the punishment assessed for noncompliance with the insurance mandate was a penalty rather than a tax.

But the big ticket portion of the appeal related to the constitutionality of the individual mandate.

“The federal government’s assertion of power, under the commerce clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure,” Chief Judge Joel Dubina and Judge Frank Hull wrote in the jointly-authored opinion.

“Although courts must give due consideration to the policy choices of the political branches, the judiciary owes its ultimate deference to the Constitution,” they wrote.

Some analysts noted that the majority included a judge appointed by a Republican president and a judge appointed by a Democratic president. Chief Judge Dubina was appointed by George H. W. Bush, and Judge Hull was appointed by Bill Clinton.

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