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Appeals court rejects novel Obamacare challenge

By Bill Mears, CNN Senior Producer
updated 3:51 PM EDT, Tue July 29, 2014
STORY HIGHLIGHTS
  • D.C. appeals panel unanimously rejected challenge to how the health law took shape
  • A key provision, the individual mandate, originated in Senate legislation
  • The law says such consideration should have started in the House, the challengers argued

(CNN) -- Score one for Obamacare supporters in court on Tuesday.

A three-judge appeals panel in Washington unanimously rejected a novel challenge to how the Affordable Care Act took shape in Congress.

The court found lawmakers did not violate the Constitution when laying out the so-called individual mandate, which requires most Americans buy health insurance or pay a penalty.

An Iowa small business owner and a conservative legal group said the measure was unlawful, arguing it was intended to raise revenue and improperly originated in the Senate.

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Under the Constitution's Origination Clause, revenue-raising legislation must begin in the House.

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But the court concluded the challenge did not pass muster -- that the politically-charged law approved with only Democratic support in 2010 was not designed mainly to raise money for the government, but to ensure more Americans got health coverage.

"Today's decision is disappointing, because it relied on a new and unprecedented distinction to exempt the Obamacare tax from the Constitution's rules for enacting taxes," said Timothy Sandefur, principal attorney at the conservative Pacific Legal Foundation.

"We think that's wrong, and that's what we'll be taking to the Supreme Court if necessary," Sandefur said.

The challenge was raised by Matt Sissel, a Cedar Rapids, Iowa, artist, gallery owner and part time National Guard member. He opposes being forced to purchase health insurance under the government mandate.

His lawyers argued Senate Democratic leaders pushed a "shell game" -- taking an unrelated bill that had passed in the GOP-controlled House, removing every word, and replacing it with key parts of the Affordable Care Act, including the individual mandate.

Study: Obamacare gave 10 million Americans health insurance

A divided Supreme Court, in a blockbuster decision, ruled in 2012 that the law's individual mandate was constitutional, labeling it a tax.

Last week, the D.C. circuit dealt Obamacare supporters an appeals court setback when it limited subsidies and tax breaks available for millions of people who signed up for coverage through a federally-run insurance marketplace.

A separate appeals panel in Richmond concluded the exact opposite on the same day -- saying the subsidies were lawful. That conflict likely will land that issue before the Supreme Court in coming months.

Conversely, the Sissel challenge now faces a potentially uphill battle for Supreme Court consideration following the appeals decision.

Appeals courts differ on Obamacare; Supreme Court case likely

FAQ: What the Obamacare court decisions mean for you

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