government

Health reform faces state suits over insurance mandate

Lawsuits alleging that Congress trampled states' rights have drawn some physician support, but many experts say Congress is on firm legal ground in regulating care.

By — Posted April 5, 2010

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More than a dozen state attorneys general wasted no time launching lawsuits aimed at central provisions in the federal health system overhaul, filing them within hours of President Obama signing the landmark legislation into law on March 23.

While many legal analysts downplayed any potential constitutional flaws in the reform package, others suggested that, as the law is breaking new ground, so might the legal attacks. At a minimum, legal observers agreed that the cases could influence public opinion on the reform's implementation, particularly given the unlikely prospects of a legislative repeal.

One of the new law's central features is a requirement that most individuals obtain health insurance beginning in 2014 or face financial penalties. It is the prime target of at least two lawsuits from the states, one filed by Virginia Attorney General Ken Cuccinelli, and a second filed in Florida by Attorney General Bill McCollum and joined by 13 other states.

"This is a power Congress has never tried to exercise before; therefore, there can be no judicial precedent on point," said Randy E. Barnett, a law professor at Georgetown University Law Center in Washington, D.C. That's likely to send the issue to the U.S. Supreme Court, where Barnett said that "those who support the law should not be 100% confident that the court will uphold it, and those who challenge the law should not put their faith in the court to strike it down."

The lawsuits charge that the health reform package exceeds Congress' authority to regulate interstate commerce and violates states' sovereignty. If individuals choose not to purchase health insurance, they are therefore not engaging in any economic activity subject to federal regulation, the suits contend. Nor can the government compel the purchase of any goods or services, they say.

If the mandate is upheld, "there would be no limit to ... Congress' authority to regulate everything we do," Cuccinelli said in a statement.

Medicaid expansion at issue

The Florida case also challenges federal provisions requiring states to expand their Medicaid programs and protests the additional administrative burdens states must bear in implementing the health reform law. Those duties include monitoring compliance by consumers and operating health insurance exchanges. In addition, the suit alleges that the tax penalty on the uninsured is illegal and would force many more to enroll in Medicaid.

"This act affirmatively constricts the states to do the federal government's bidding, and there's a line of case law that says you cannot do that, because it violates state sovereignty," said David B. Rivkin Jr., a former Justice Dept. attorney and partner at Baker Hostetler's Washington, D.C., office. He represents the states that joined in the Florida litigation.

Virginia's suit, meanwhile, also focuses on a conflict between the federal statute and a recently enacted state law prohibiting insurance mandates. Such laws could boost states' standing to challenge the federal reform law, said Christie Herrera, director of the health and human services task force for the American Legislative Exchange Council, a conservative public policy organization that helped develop the anti-mandate legislation.

Three other states have announced intentions to sign onto the joint lawsuit, although none had by this article's deadline. Arizona's governor on March 29 signed a measure that allows the state to join the lawsuit. Nevada's governor pledged to hire a lawyer to participate in the lawsuit after the attorney general said she wouldn't file. Missouri's lieutenant governor said he intends to join the suit despite the opposition of the governor and the attorney general.

Some physicians are getting behind the legal challenges.

The Florida Medical Assn. endorsed the state attorney general's lawsuit. "The federal health care legislation that is being forced upon Florida will hurt patients and taxpayers and exacerbate the state's current access-to-care crisis," the organization said in a statement.

A state-based physician advocacy group in New Jersey called NJ Physicians and the Assn. of American Physicians and Surgeons, a national medical organization, each filed separate lawsuits similarly challenging the individual mandate.

Passing constitutional muster

White House officials roundly rejected the lawsuits' merits, sentiments that were backed by numerous legal observers who said the reform law stands on solid ground. In addition, Pennsylvania Gov. Edward G. Rendell was joined by several other governors in a pledge to support the federal government's defense of the reform law.

"We're hearing about this repeal-and-replace strategy" by reform opponents, said Judy Feder, a senior fellow at the Center for American Progress, a liberal-leaning policy think tank. The legal attack "is just a last-ditch effort to stop implementation of this bill."

Erwin Chemerinsky, founding dean of the University of California Irvine School of Law, pointed to long-standing legal precedents upholding Congress' broad authority to regulate the public health and welfare as well as areas that have a "substantial effect" on the overall economy.

"Everyone at some point will need medical care," he said. "So the question is, is this economic activity that, [when] looked at across the country, will have a substantial effect, and the answer is 'yes.' "

Moreover, the insurance mandate is essential to making other provisions of the reform law work, such as prohibiting insurance companies from denying coverage to patients with preexisting conditions and providing federal subsidies to ensure affordable coverage, said Simon Lazarus. He is public policy counsel to the National Senior Citizens Law Center, a legal advocacy firm for low-income elderly and disabled patients.

The U.S. Constitution generally prohibits states from blocking implementation of federal law, Lazarus said. And when it comes to Medicaid or other federal health care programs, states have the ability to opt out.

But according to the Florida lawsuit, states don't have much choice in that regard, because dropping such programs would mean millions more uninsured.

A July 2009 Congressional Research Service report, while generally affirming Congress' authority to enact an insurance mandate, nevertheless stated that "whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question."

Georgetown's Barnett said Congress' powers, while expansive, are not unlimited. "That's not to say the court will not broaden Congress' powers. It's done it before," he said. "But it's going to have to in order to justify this law."

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ADDITIONAL INFORMATION

Case at a glance

Is the insurance mandate in the health reform law constitutional?

At least 15 state attorneys general say no and have sued to invalidate the requirement.

Impact: States and some legal observers contend that Congress overstepped its authority to regulate interstate commerce and imposed unreasonable burdens on states under the reform law. Other legal experts say court precedents have long upheld the government's ability to regulate health care and note that the mandate is central to achieving the goal of universal coverage.

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