On August 7, 2014, in Coons v. Lew, the US Court of Appeals for the Ninth Circuit held that the Affordable Care Act (ACA) preempts the Arizona Health Care Freedom Act (Arizona Act) (Ariz. Const. art. XXVII), which amended the Arizona constitution and gave Arizona citizens the option to choose not to purchase health care coverage without incurring a penalty (No. 13-15324, (9th Cir. 2014)).

This case involves challenges to the ACA's individual mandate by two private citizens. Plaintiff Coons, who was not exempt from the ACA's requirements and who did not have private medical insurance, was unwilling to purchase medical insurance and share his private medical history with third parties. Plaintiff Novack was a physician whose patients received care paid for by Medicare reimbursements. The plaintiffs alleged that:

The district court dismissed the plaintiffs’ claims following the Supreme Court’s decision in National Federation of Independent Business v. Sebelius (132 S.Ct. 2566 (2012)) (see Legal Update, Supreme Court Upholds the Affordable Care Act's Individual Mandate). The plaintiffs subsequently appealed.

The Ninth Circuit dismissed all of the plaintiffs’ arguments. First, the court rejected the IPAB challenge concluding that the claim was not ripe because Novack's possible future financial harm by an IPAB decision was speculative.

Second, the court rejected Coons' argument that the individual mandate was an unconstitutional burden on his medical autonomy because it still allowed for individuals to select their own plan and provider. The court explained that the mandate only burdens individuals financially, making it a substantive due process right that the Supreme Court no longer recognizes. Additionally, after recognizing a fundamental privacy right which must be balanced against the government’s interest in information, the court rejected the informational privacy challenge as prudentially unripe because Coons had not yet been required to disclose any medical information to a third party.

Finally, the court turned to the preemption claim. In 2010, eight months after the passage of the ACA, Arizona enacted the Arizona Act, which amended its constitution to provide, among other things, that:

The court explained that the preemption issue is evaluated under the US Constitution's Supremacy Clause and that the question is primarily one of congressional intent. In concluding that the Arizona Act was preempted, the court first recognized that the individual mandate was upheld by the Supreme Court as a proper exercise of Congress' Article I taxing power. Further, it reasoned that the Arizona Act effectively relieved Arizona citizens from exactly what the ACA's individual mandate requires. The effect was that the Arizona Act directly interfered with the federal law and Congress' intent. As a result, the court held that the Arizona Act was preempted.

Although other ACA requirements have been successfully challenged in the courts (see Legal Update, Supreme Court Strikes Contraceptives Mandate as Applied to For-Profits with Religious Beliefs), the individual mandate has survived a variety of constitutional challenges including, in this latest case, claims based on federal substantive due process and state constitutional amendments. In 2011, a individual mandate challenge based on a Virginia statute similar to the Arizona Act was dismissed by the Fourth Circuit on standing grounds.