Physician Attempts New Strategy in Stopping Affordable Care Act

A suburban Houston-based physician and prominent Republican fundraiser filed suit May 7 in a federal district court in Texas to stop the enforcement of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) (Hotze v Sebelius, No. 4:13-cv-01318, (S.D. Tex.)). Dr. Steven Hotze, who specializes in various types of alternative medicine, is also president of Braidwood Management, Inc., and employs over 70 people. In his complaint, Hotze said that PPACA violates both the origination clause and the Fifth Amendment of the U.S. Constitution.


Hotze, who is also founder and president of Conservative Republicans of Texas, states that the law forces him and other Texans “to pay enormous penalties to the federal government, or else purchase health insurance that is far more expensive and less useful than existing employer-based coverage.” Hotze employs 73 people through Braidwood Management, and offers his employees a voluntary “high-deductible” health coverage plan which directly covers them for medical expenses greater than about $4,000 per year. Employees then have the option of paying into a health savings account from which they can withdraw to pay for their deductible and minor health care expenses.

The complaint notes that this sort of health plan does not meet the “minimum essential” health coverage requirements of PPACA. It also notes that Braidwood employees would not be eligible for Medicare or other public programs of minimum essential coverage, such as Medicaid. Hotze states that as of January 1, 2014, he would either have to pay a $2,000 per employee penalty, or “shared responsibility payment,” for not providing minimum essential coverage, or drop his existing health plan and switch to one that he claims would be more expensive and less desirable.

Basis of Complaint

Citing NFIB v Sebelius, No. 11-393 (U.S.), the case that upheld the health reform law, Hotze notes that U.S. Supreme Court states that the shared responsibility payment “shall be assessed and collected in the same manner’ as tax penalties,” and constitutes a tax. Hotze further states that since the Origination Clause of the U.S. Constitution (Art. I, Sec. 7, Cl. 1.) requires all revenue raising bills to originate in the House of Representatives, PPACA is unconstitutional because the text of the law originated in the Senate.

Hotze also claims that the health reform law constitutes a “taking” within the meaning of the Takings Clause of the Fifth Amendment because it compels individuals and companies to pay money to other private entities, government-approved health insurance companies, without public use and just compensation. Hotze is seeking an order prohibiting HHS and the Treasury Department from enforcing the law.