A federal appeals court panel Tuesday heard yet another challenge to the nation's healthcare law, in a case that revolves around the legality of the Patient Protection and Affordable Care Act's constitutionality because of which house of Congress originated it.
At issue in Hotze v. Burwell is whether the ACA is unconstitutional because it is a revenue-raising law that should have originated in the House rather than the Senate. The case is before a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans.
Plaintiffs in the case argue that the law is unconstitutional partly because it started in the Senate rather than the House, violating the origination clause of the Constitution which requires “bills for raising revenue” originate in the House. Defendants, however, argue that it did start in House, albeit as a different measure focusing on a first-time homebuyer's credit for members of the military. The Senate then transformed that bill into what became the ACA.
Democrats involved in the case say that means the bill met the requirement of starting in the House, while the Republicans involved say the measure was changed so much that it shouldn't count as having started in the House.
Andrew Schlafly, an attorney for the plaintiff, said he focused in his arguments Tuesday on the meaning of the origination clause.
“It was important when the Constitution was ratified, and it's important today,” Schlafly said of the clause in an interview after oral arguments. “What it does is it ensures maximum political accountability for revenue-raising bills. Obamacare violates it.”
The judges Tuesday engaged in lively questioning and “showed some skepticism to both sides,” he said.
Gregory Katsas, an attorney for about 90 House Republicans challenging the law, also said Tuesday the judges “seemed to press both parties reasonably hard.”
Katsas argued that if the origination clause doesn't apply to taxes with a regulatory purpose and if the Senate truly has unlimited power to amend House tax bills, then the clause is drained of its meaning.
“The Affordable Care Act is a massive set of tax increases,” Katsas said in an interview Tuesday after arguments. “The bill that became the ACA was created by the Senate. It bears no relationship to anything the House of Representatives had originated, so if these taxes are upheld then there's really nothing left of the origination clause.”
Attorney Alisa Klein, arguing for the Justice Department, said no House members argued that the origination clause was being violated when the law was making its way through Congress in 2009 and 2010.
And Attorney Elizabeth Wydra, arguing for congressional supporters of the measure, said House members still zealously guard their prerogative to start tax legislation. "The origination clause continues to be something that is alive and well in the House," Wydra said.
Before the case reached the appeals court, a U.S. District Court judge in Texas had dismissed it on the basis that the Affordable Care Act is not a law primarily designed to raise taxes.
Though no one knows how the 5th Circuit will rule, two of the three judges who heard oral arguments Tuesday were appointed by Democratic presidents.
Hotze v. Burwell is one of a number of pending cases challenging the ACA. The U.S. Supreme Court has agreed to hear one of those cases, King v. Burwell, next year. The plaintiffs in King v. Burwell argue that insurance premium subsidies should not be available to Americans in states that have not adopted their own insurance exchanges under the ACA.
Schlafly noted that the question in King v. Burwell centers on statute while the issue in Hotze v. Burwell is one of constitutionality, but he called both challenges to the healthcare law “strong.”
Earlier this year, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a lower court ruling to dismiss a case that made a similar argument to the one in Hotze v. Burwell—that the law violated the origination clause of the Constitution.
Associated Press content is included in this report
Follow Lisa Schencker on Twitter: @lschencker
