So the Obama administration has won a big one in its efforts to defend the health reform law against the conservative legal onslaught, as a three-judge panel for the U.S. Court of Appeals ruled today that it’s constitutional for Congress to require Americans to have health insurance.

The big news is that the panel included a Bush appointee who clerked for Antonin Scalia and who is seen as a major states rights advocate. In addition to that, though, the ruling takes a hard shot at the primary legal arguments conservatives have advanced against the mandate:

No matter how you slice the relevant market — as obtaining health care, as paying for health care, as insuring for health care — all of these activities affect interstate commerce, in a substantial way. Start with obtaining medical care. Few people escape the need to obtain health care at some point in their lives, and most need it regularly...

Congress could reasonably conclude that the decisions and actions of the self-insured substantially affect interstate commerce.

In choosing how to regulate this group, Congress also did not exceed its power. The basic policy idea, for better or worse (and courts must assume better), is to compel individuals with the requisit income to pay now rather than later for health care...Call this mandate what you will — an affront to individual autonomy or an imperative of national health care — it meets the requirement of regulating activities that substantially affect interstate commerce...

Does the Commerce Clause contain an action/inaction dichotomy that limits congressional power? No — for several reasons. First, the relevant text of the Constitution does not contain such a limitation. To the extent “regulate,” “commerce,” “necessary” and “proper” might be words of confinement, the Court has not treated them that way, as long as the objects of federal legislation are economic and substantially affect commerce. All three methods of paying for medical care (private insurance, public insurance and self-insurance) meet this modest requirement. And if Congress may prescribe rules for some of these methods of payments, as plaintiffs seem to agree, it is difficult to see why these words prohibit it from doing the same for all three....

Second, the promise offered by the action/inaction dichotomy — of establishing a principled and categorical limit on the commerce power — seems unlikely to deliver in practice. Level of generality is destiny in interpretive disputes, and it remains unclear at what level plaintiffs mean to pitch their action/inaction line of constitutional authority or indeed whether a workable level exists.

The ruling seems to uphold a primary argument of the health law’s backers: That the health insurance market is fundamentally different from other markets because ultimately we will all need health care. Because of this, the actions of the “self-insured” will impact the interestate market — and can thus be regulated by Congress. This can be seen as an oblique blow to the so-called “broccoli” argument, which holds that if the government can force you to buy health insurance, it can also compel you to eat vegetables against your will.

The ruling also rejects the argument that the individual mandate is unconstitutional because it constitutes regulating inactivity. The court finds the distinction between activity and inactivity to be meaningless — or at least that the line between them is impossible to discern in practice. In other words, the court’s ruling badly undermines two of the core arguments conservatives have been making against the law — and will continue to make against it, perhaps all the way to the Supreme Court — and for the first time, the court didn’t do so along partisan lines.

UPDATE: As Adam Serwer points out, the rejection of the activity/inactivity distinction is also key because conservatives concocted it to appeal to Justice Scalia.