Post by sapuco on Dec 13, 2010 23:41:25 GMT 4
The Obama administration’s requirement that most citizens maintain minimum health coverage as part of a broad overhaul of the industry is unconstitutional a federal judge ruled, striking down the linchpin of the plan.
U.S. District Judge Henry Hudson in Richmond, Virginia, today rule that the requirement in President Barack Obama’s health-care legislation goes beyond Congress’s powers to regulate interstate commerce. While severing the coverage mandate, which was to become effective in 2014, Hudson didn’t address other provisions such as expanding Medicaid.
“At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage -- it’s about an individual’s right to choose to participate,” wrote Hudson, who was appointed by President George W. Bush in 2002.
The ruling is the government’s first loss in a series of challenges to the law mounted in federal courts in Virginia, Michigan and Florida, where 20 states have joined an effort to have the statute thrown out. Constitutional scholars said unless Congress changes the law, its fate on appeal will probably hinge on the views of the U.S. Supreme Court.
‘Lot of Activity’
“There’s a lot of activity focused now on alternatives to the mandate,” said Dan Mendelson, chief executive officer of Avalere Health, a Washington-based consulting firm. One option might be to provide access to all people, even ones with pre- existing conditions, to buy insurance, and limit the times they could sign up.
“It’s using a carrot instead of a stick,” Mendelson said in a telephone interview last week.
Robert Zirkelbach, a spokesman for health insurers’ Washington lobby group America’s Health Insurance Plans, declined to comment on the record about whether insurers had discussed such an alternative with the administration or whether there was a way to design such a policy in a way that would be sufficient to replace the effects of the individual mandate.
“I am gratified we prevailed,” Virginia Attorney General Ken Cuccinelli, who brought the suit, said in a statement. “This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution.”
Appeals Court Hearing
The government may ask the judge to reconsider his ruling, or seek a hearing by the U.S. Court of Appeals in Richmond. Two opinions from federal judges in Virginia and in Michigan have sided with the government on the law’s constitutionality.
A measure of health-care stocks advanced as much as 0.5 percent on news of the ruling. UnitedHealth Group Inc. and Coventry Health Care Inc. both advanced almost 2 percent, to $37.37 and $27.10, respectively.
“We are disappointed in today’s ruling but continue to believe -- as other federal courts in Virginia and Michigan have found -- that the Affordable Care Act is constitutional,” Justice Department spokeswoman Tracy Schmaler said in a statement. The government is “confident that we will ultimately prevail,” she said.
Reid Cherlin, a White House spokesman, didn’t immediately reply to an e-mailed request for comment.
“Some prominent conservative justices will go against it, but there is no serious indication that every single one will go against it,” Mark Hall, a professor at Wake Forest University School of Law, who serves on a federal advisory board set up to help implement the law, said ahead of the ruling.
Cornerstone of Overhaul
Justice Department lawyers in court papers called the mandatory insurance measure the cornerstone of the overhaul as it pushes younger and healthier people into the insurance pool. Through the individual mandate and expansions of Medicaid and employer-based coverage, the law is estimated to provide 32 million more people with coverage by 2019, according to the Congressional Budget Office.
The law bars insurers from denying coverage to people who are sick or imposing lifetime limits on costs. Without payments generated from the required policies, the health-insurance market would face extinction, the government argued. The mandate falls under Congress’s power to regulate interstate commerce as $43 billion in unpaid medical bills are absorbed by the market each year, U.S. lawyers said.
Virginia’s suit claimed Congress has only the power to tax, not to force participation in a market. Its case defended the Virginia Health Care Freedom Act, a state law barring compulsory purchase of health insurance by its citizens.
Florida Suit
Florida, joined by 19 other states, filed a separate lawsuit challenging the law’s constitutionality and arguing it puts too big a burden on its budget by expanding state-run Medicaid programs. U.S. District Judge Roger Vinson in Pensacola, Florida, scheduled oral argument for Dec. 16.
The Florida case, involving 20 states, has drawn the most attention from outside interests.
Sixty-three, mostly Republican, members of the U.S. House of Representatives filed a court brief backing the states while incoming House of Representatives Speaker John Boehner, an Ohio Republican, and 32 Republican U.S. senators separately submitted papers arguing the legislation represents an unconstitutional expansion of congressional legislative powers. U.S. District Judge Roger Vinson is slated to hear arguments Dec. 16 on motions by each side to decide the case in their favor.
A group of about 40 economics scholars, including Nobel laureates Eric Maskin, George Akerlof and Kenneth Arrow, filed their own brief, arguing in favor of the legislative package called the Patient Protection and Affordable Care Act.
The challenges brought by the attorneys general in Virginia and Florida are the most likely to reach the Supreme Court, according to health-care and constitutional lawyers.
“The Florida and Virginia cases have both been well briefed and well drafted,” said Peter Urbanowicz, a managing director at Alvarez & Marsal Healthcare Industry Group in Washington.
The case is Commonwealth of Virginia v. Sebelius, 10-cv- 00188, U.S. District Court, Eastern District of Virginia (Richmond).
source: Tom Schoenberg in Richmond, Virginia, federal court at tschoenberg@bloomberg.net and; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net;
U.S. District Judge Henry Hudson in Richmond, Virginia, today rule that the requirement in President Barack Obama’s health-care legislation goes beyond Congress’s powers to regulate interstate commerce. While severing the coverage mandate, which was to become effective in 2014, Hudson didn’t address other provisions such as expanding Medicaid.
“At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage -- it’s about an individual’s right to choose to participate,” wrote Hudson, who was appointed by President George W. Bush in 2002.
The ruling is the government’s first loss in a series of challenges to the law mounted in federal courts in Virginia, Michigan and Florida, where 20 states have joined an effort to have the statute thrown out. Constitutional scholars said unless Congress changes the law, its fate on appeal will probably hinge on the views of the U.S. Supreme Court.
‘Lot of Activity’
“There’s a lot of activity focused now on alternatives to the mandate,” said Dan Mendelson, chief executive officer of Avalere Health, a Washington-based consulting firm. One option might be to provide access to all people, even ones with pre- existing conditions, to buy insurance, and limit the times they could sign up.
“It’s using a carrot instead of a stick,” Mendelson said in a telephone interview last week.
Robert Zirkelbach, a spokesman for health insurers’ Washington lobby group America’s Health Insurance Plans, declined to comment on the record about whether insurers had discussed such an alternative with the administration or whether there was a way to design such a policy in a way that would be sufficient to replace the effects of the individual mandate.
“I am gratified we prevailed,” Virginia Attorney General Ken Cuccinelli, who brought the suit, said in a statement. “This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution.”
Appeals Court Hearing
The government may ask the judge to reconsider his ruling, or seek a hearing by the U.S. Court of Appeals in Richmond. Two opinions from federal judges in Virginia and in Michigan have sided with the government on the law’s constitutionality.
A measure of health-care stocks advanced as much as 0.5 percent on news of the ruling. UnitedHealth Group Inc. and Coventry Health Care Inc. both advanced almost 2 percent, to $37.37 and $27.10, respectively.
“We are disappointed in today’s ruling but continue to believe -- as other federal courts in Virginia and Michigan have found -- that the Affordable Care Act is constitutional,” Justice Department spokeswoman Tracy Schmaler said in a statement. The government is “confident that we will ultimately prevail,” she said.
Reid Cherlin, a White House spokesman, didn’t immediately reply to an e-mailed request for comment.
“Some prominent conservative justices will go against it, but there is no serious indication that every single one will go against it,” Mark Hall, a professor at Wake Forest University School of Law, who serves on a federal advisory board set up to help implement the law, said ahead of the ruling.
Cornerstone of Overhaul
Justice Department lawyers in court papers called the mandatory insurance measure the cornerstone of the overhaul as it pushes younger and healthier people into the insurance pool. Through the individual mandate and expansions of Medicaid and employer-based coverage, the law is estimated to provide 32 million more people with coverage by 2019, according to the Congressional Budget Office.
The law bars insurers from denying coverage to people who are sick or imposing lifetime limits on costs. Without payments generated from the required policies, the health-insurance market would face extinction, the government argued. The mandate falls under Congress’s power to regulate interstate commerce as $43 billion in unpaid medical bills are absorbed by the market each year, U.S. lawyers said.
Virginia’s suit claimed Congress has only the power to tax, not to force participation in a market. Its case defended the Virginia Health Care Freedom Act, a state law barring compulsory purchase of health insurance by its citizens.
Florida Suit
Florida, joined by 19 other states, filed a separate lawsuit challenging the law’s constitutionality and arguing it puts too big a burden on its budget by expanding state-run Medicaid programs. U.S. District Judge Roger Vinson in Pensacola, Florida, scheduled oral argument for Dec. 16.
The Florida case, involving 20 states, has drawn the most attention from outside interests.
Sixty-three, mostly Republican, members of the U.S. House of Representatives filed a court brief backing the states while incoming House of Representatives Speaker John Boehner, an Ohio Republican, and 32 Republican U.S. senators separately submitted papers arguing the legislation represents an unconstitutional expansion of congressional legislative powers. U.S. District Judge Roger Vinson is slated to hear arguments Dec. 16 on motions by each side to decide the case in their favor.
A group of about 40 economics scholars, including Nobel laureates Eric Maskin, George Akerlof and Kenneth Arrow, filed their own brief, arguing in favor of the legislative package called the Patient Protection and Affordable Care Act.
The challenges brought by the attorneys general in Virginia and Florida are the most likely to reach the Supreme Court, according to health-care and constitutional lawyers.
“The Florida and Virginia cases have both been well briefed and well drafted,” said Peter Urbanowicz, a managing director at Alvarez & Marsal Healthcare Industry Group in Washington.
The case is Commonwealth of Virginia v. Sebelius, 10-cv- 00188, U.S. District Court, Eastern District of Virginia (Richmond).
source: Tom Schoenberg in Richmond, Virginia, federal court at tschoenberg@bloomberg.net and; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net;