September 2010:
State Actions Against Health Care Law Take Root

Washington Watch | September 2010
By Bruce Moyer

The new health care reform legislation—the Patient Protection and Affordable Care Act— has triggered several high-profile lawsuits in the federal courts. These suits are aimed at undermining one of the law’s bedrock and controversial features. Some other states have passed laws or created ballot initiatives that attempt to achieve the same result. (Robert Harrison, chair of the FBA’s Health Law Section, discusses health care reform further on page 52 of this issue.)

The legal maneuvering swirls around the law’s “individual mandate” requirement, which compels every person to purchase health insurance from a private insurer or face a penalty for not doing so. As noted in this column last February, the authority underlying the individual mandate is unprecedented and untested.

All these legal challenges to the new health care law transcend the merits of health care policy. The cases raise fundamental questions that are likely to be decided ultimately by the Supreme Court and test the role and limits of federal power and state sovereignty.

Supporters of the individual mandate contend that Congress acted within its power in imposing the insurance requirement, because the financial viability of the health care overhaul relies on universal articipation.Proponents argue that, under the Constitution’s Commerce Clause, the federal government is permitted “to regulate commerce ... among the several states.” The argument points to a line of Supreme Court cases that apply an expansive view toward the government’s commerce power, permitting Congress to regulate and prohibit economic activity, even if it does not itself involve interstate commerce, but substantially affects it. But does that same authority to regulate economic activity extend to federal regulation of economic inactivity—that is, when an individual declines to purchase health insurance or risk a penalty?

Opponents of the Patient Protection and Affordable Care Act argue that federal power under the Commerce Clause does not go that far, and three states have filed lawsuits on those grounds: Florida, Michigan, and Virginia. In addition, five states (Georgia, Idaho, Louisiana, Utah, and Virginia) have enacted laws declaring, with variations, that residents do not have to purchase health insurance, employers do not have to contribute to employees’ coverage, and no penalties will be imposed for failing to do so. Ballot efforts testing the new law also have popped up in four states: Missouri, Florida, Arizona, and Oklahoma.

The Michigan lawsuit, Thomas More Center v. Obama, was brought by a national public interest law firm in the Eastern District of Michigan. On July 21, U.S. District Judge George Steeh heard arguments on the merits and the Thomas More Center’s request for a preliminary injunction. A decision remains pending.

Right behind the Michigan lawsuit is one in the Eastern District of Virginia, Commonwealth of Virginia v. Sibelius, filed by Virginia Attorney General Ken Cuccinelli. In August, U.S. District Judge Henry Hudson denied the federal government’s motion to dismiss the litigation, finding that the lawsuit raised legitimate issues. Judge Hudson will hear arguments on the merits in his Richmond courtroom on October 18.

In the Northern District of Florida, attorneys general from 20 states have joined in filing a similar lawsuit, State of Florida v. U.S. Department of Health & Human Services. Senior Judge Roger Vinson will hear arguments on the government’s motion to dismiss the case on September 14.

The Virginia lawsuit differs in a significant way from the Florida and Michigan suits. At the heart of Virginia’s case is a recently enacted state law establishing the right of Virginia residents to refrain from buying health insurance. Virginia’s sovereign right to create such a law, the state argues, is undermined by the federal health care law’s penalties against anyone who does not purchase health insurance.

Should Virginia triumph in its challenge, other states are likely to erect similar barriers. According to the National Conference of State Legislatures, in the past 12 months, 39 states have considered, or are considering, some type of legislative measure proposing to challenge, opt out, or push back on federal health insurance reform.

Finally, voters in some states will be given the chance to weigh in on the reform. In July, nearly 80 percent of voters in Missouri adopted a referendum rejecting the federal legislation’s individual mandate. Arizona and Oklahoma have placed similar proposed constitutional amendments on their November ballots. Similar measures were proposed and rejected in 25 states during their legislative sessions, which have now ended.

Bruce Moyer is government relations counsel for the FBA. © 2010 Bruce Moyer. All rights reserved.

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