Health Law Suffers New Blow In Court

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By JENNIFER HABERKORN | 2/1/11 4:38 AM EST Updated: 2/1/11 6:11 AM EST

The Obama administration is vowing to move full speed ahead with implementation of the health care reform law, even after a federal judge Monday declared the legislation unconstitutional.

It was the most striking blow yet to President Barack Obama’s signature domestic initiative, though it certainly won’t be the last ruling on the issue. The Justice Department plans to appeal. Judge Roger Vinson of the U.S. District Court of the Northern District of Florida ruled that the law’s requirement that nearly all Americans purchase health insurance is not within the legal bounds of Congress’s power under the commerce clause. But he stopped short of issuing an injunction to keep the federal government from enacting the law.

The administration called the ruling “well outside of the mainstream judicial opinion” and said implementation won’t change.

“I don’t think you should view this as the opening of the government shutting down the implementation effort,” a senior administration official said. The ruling is unlikely to derail implementation of the health reform law in the states. Each of the states that are party to the lawsuit has received some funding to implement provisions of the Affordable Care Act.

Even more conservative states concede that while they oppose the law, they would rather lay the groundwork themselves than cede control to the federal government. That’s the view of Rep. John Zerwas, a Republican in the Texas House of Representatives who introduced legislation to authorize his state to set up a health insurance exchange. “There’s one thing we know for sure: Health care reform is the law of the land,” he said Monday. “All of our efforts to declare it unconstitutional are aspirational at this point. I’d much rather be in a situation where we have a way to deal with this at a state level than have the federal government come in.”

The Florida case is now quite likely headed for the 11th Circuit Court of Appeals, which is based in Atlanta and considered one of the most conservative circuit courts. Other reform-related lawsuits are proceeding through the 4th and 6th Circuits. The issue is expected to be decided by the U.S. Supreme Court.

Monday’s ruling, the first time a federal judge has declared the whole law unconstitutional, is likely to further amplify the partisan politics of health reform.

Hours after the ruling, Senate Assistant Majority Leader Dick Durbin (D-Ill.) called a hearing on the law’s constitutionality, to be held Wednesday before the Judiciary Committee. Republicans have scheduled a similar hearing in the House Judiciary Committee.

Vinson said Monday that the requirement to buy insurance is pivotal to the rest of the law, and thus the entire legislation is unconstitutional. The law also doesn’t have a severability clause, a common legal phrase that typically prevents courts from striking down a whole law because one piece has been found to be illegal.

“Because the individual mandate is unconstitutional and not severable, the entire act must be declared void,” he wrote in his 78-page ruling. “This has been a difficult decision to reach, and I am aware that it will have indeterminable implications.”

So far, four district court judges have ruled on the merits of the health reform law. Raising the political tinge of reform, they have ruled along party lines. Two judges, appointed by Republican presidents, have struck down the law or its main provision. Two others appointed by Democrats have upheld the law as constitutional.

A dozen more legal challenges to reform have been knocked out of court on procedural grounds.

But the Florida suit is the most high-profile and politically charged legal challenge to reform. It was brought by 26 states and the National Federation of Independent Business. Several members of Congress signed briefs in support of or against the case.

Proponents of health reform argue that the individual mandate is pivotal to delivering key insurance industry reforms in the law, such as a ban on denying coverage for pre-existing conditions. It’s due to go into effect in 2014. They tried to downplay the decision as a display of extreme judicial activism.

“Judge Vinson’s decision is radical judicial activism run amok, and it will undoubtedly be reversed on appeal,” said Ron Pollack, executive director of Families USA, an advocacy group that supports health reform. “The decision flies in the face of three other decisions, contradicts decades of legal precedent and could jeopardize families’ health care security.”

“I remember when Republicans thought that activist judges shouldn’t legislate from the bench,” said Rep. Pete Stark (D-Calif.). “Several other judges across the country have already ruled that the health reform law is constitutional, a viewpoint that will win the day at the end of all this partisan posturing.”

Republicans praised the ruling, saying the courts have finally recognized their long-held contention that the law is not legally sound.

“This ruling confirms what Americans have been saying for months,” said Senate Minority Leader Mitch McConnell (R-Ky.). “The health spending bill is a massive overreach, and Democrats ‘exceeded the bounds’ of congressional authority under the Constitution in passing the law with the individual mandate.”

The key legal question in the suits over the individual mandate has come down to whether the Constitution’s commerce clause gives Congress power to regulate the decision to buy insurance.

The states and the NFIB said in oral arguments in December that Congress has no constitutional right to force Americans to buy insurance. They said that while Congress is authorized to regulate activity, it can’t regulate inactivity — or not buying insurance.

The federal government argued that Congress has a right to regulate the insurance market because it is unique; it’s fair to assume that everyone will need health care at some point. If people are not insured, their costs will have to be picked up by others, driving up rates for everyone and putting them in the market whether they planned to join or not.

During oral arguments in December, Vinson suggested it would be a “giant leap” for the Supreme Court to say a decision not to buy insurance is the same as activity. He questioned whether Congress could require people to buy other products if they have a positive impact. Could it “mandate [that] everybody has to buy a certain amount of broccoli?” Vinson asked, comparing the positive impact both could have on health.

The federal government argued that health insurance and health care are unique markets and that Congress has the power to regulate them. “It’s not shoes. It’s not broccoli,” said Ian Gershengorn, arguing for the federal government. “Health insurance is a product that is a financing mechanism.”

It’s the lack of the severability clause that could make the legal challenges more complicated. The clause typically prevents a law from being voided over one provision. It most likely wasn’t included in the Senate bill that eventually became law because the Senate legislation was never expected to be final. When Sen. Scott Brown (R-Mass.) was elected in January 2010, Democrats were forced to let the legislation pass the House with only the alterations that were allowed in the technical reconciliation process. Proponents of reform have frequently said the missing severability clause shouldn’t hold up the whole law.

The states and the NFIB also argued that the law’s mandatory expansion of Medicaid commandeered the states into federal service. But Vinson ruled against the states on that point.

Sarah Kliff contributed to this report.

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