Virginia Supreme Court Rules on Healthcare Mandate

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Virginia judge rules health care mandate unconstitutional
By Bill Mears, CNN Supreme Court Producer
STORY HIGHLIGHTS
A U.S. district judge found against an individual health care purchase mandate
Virginia law says residents can't be forced to buy insurance
Other judges have issued contradictory rulings
The dispute is probably headed for the Supreme Court
(CNN) -- A Virginia federal judge on Monday found a key part of President Barack Obama's sweeping health care reform law unconstitutional, setting the stage for a protracted legal struggle likely to wind up in the Supreme Court.

U.S. District Judge Henry Hudson struck down the "individual mandate" requiring most Americans to purchase health insurance by 2014. The Justice Department is expected to challenge the judge's findings in a federal appeals court.

Hudson's opinion contradicts other court rulings finding the mandate constitutionally permissible.

"An individual's personal decision to purchase -- or decline purchase -- (of) health insurance from a private provider is beyond the historical reach of the U.S. Constitution," Hudson wrote. "No specifically constitutional authority exists to mandate the purchase of health insurance."

"Despite the laudable intentions of Congress in enacting a comprehensive and transformative health care regime, the legislative process must still operate within constitutional bounds," Hudson added. "Salutatory goals and creative drafting have never been sufficient to offset an absence of enumerated powers."

A federal judge in Virginia ruled in favor of the administration earlier this month over the purchase requirement issue, mirroring conclusions reached by a judge in Michigan back in October.

Virginia officials had argued that the Constitution's Commerce Clause does not give the government the authority to force Americans to purchase a commercial product -- like health insurance -- that they may not want or need. They equated such a requirement to a burdensome regulation of "inactivity."

Virginia is one of the few states in the country with a specific law saying residents cannot be forced to buy insurance.

"I am gratified we prevailed," said Virginia Attorney General Ken Cuccinelli, a conservative Republican elected in 2009. "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."

Incoming House Majority Leader Eric Cantor, R-Virginia, urged Obama and Attorney General Eric Holder to request an expedited appeal to the Supreme Court.

"Ultimately, we must ensure that no American will be forced by the federal government to purchase health insurance they may not need, want, or be able to afford," Cantor said. "In this challenging environment, we must not burden our states, employers, and families with the costs and uncertainty created by this unconstitutional law, and we must take all steps to resolve this issue immediately."

White House Press Secretary Robert Gibbs told reporters the decision by Hudson -- a 2002 George W. Bush appointee -- was not "a surprise to anybody."

"We disagree with the ruling," he said. Among other things, the provisions requiring everyone to buy insurance allow the government to "finally address the lingering discrimination" against individuals with pre-existing conditions, he said.

"When all the legal wrangling is said and done ... this is something that will be upheld," he predicted. "I think we have a good argument. I think the merits of the case are strong."

A Justice Department spokeswoman also expressed confidence the administration will eventually win the legal fight.

"We are disappointed in today's ruling but continue to believe -- as other federal courts in Virginia and Michigan have found -- that (the law) is constitutional," Tracy Schmaler said. "There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law and we are confident that we will ultimately prevail."

Obama signed the Patient Protection and Affordable Care Act in March, after promoting Democratic-led health reform efforts for months after taking office. The law is widely considered to be the signature legislative accomplishment of the president's first two years in office.

Among other things, the measure was designed to help millions of uninsured and underinsured Americans receive adequate and affordable health care through a series of government-imposed mandates and subsidies. The federal government stated in court briefs that last year, 45 million Americans were without health insurance, roughly 15 percent of the country's population.

Critics have equated the measure to socialized medicine, fearing that a bloated government bureaucracy will result in higher taxes and diminished health care services. About two dozen challenges have been filed in federal courts nationwide.

On November 8, the Supreme Court rejected the first constitutional challenge to the health care reform effort, resisting a California conservative group's appeal. The justices refused to get involved at a relatively early stage of the legal process.

The high court rarely accepts cases before they have been thoroughly reviewed by lower courts.

Legal experts say they expect several of the larger issues in the health care debate to ultimately end up before the Supreme Court. A review from the high court may not happen, however, for at least a year or two.

The highest-profile lawsuit may come from Florida. State officials there have objected not only to the individual coverage mandate but also to a requirement forcing states to expand Medicaid. Florida's litigation is supported by 19 other states: Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North and South Dakota, Pennsylvania, South Carolina, Texas, Utah and Washington.

Health care reform, a top Democratic priority since the Truman administration, passed the current Congress in a series of virtual party-line votes. Opponents derisively labeled the measure "Obamacare." Republican leaders, who captured the House of Representatives in the midterm elections, have vowed to overturn or severely trim the law.

"While this court's decision may set the initial judicial course of this case, it will certainly not be the final word," the 63-year-old Hudson wrote in October.

The case decided Monday is Virginia v. Sebelius (3:10-cv-00188).

CNN's Alan Silverleib contributed to this report

[Andrew J.]

Fix the title; this is a decision from a federal District Court, not the VA Supreme Court.

[Mr Bean]

This is a federal case it won't hit the VA Supreme Court but the Supreme type Court.

This is going to be tossed out in the Appeals and then be kicked up to the Supreme Court which will hopefully toss it out

No specifically constitutional authority exists to mandate the purchase of health insurance."

I guess because the constitution does not mandate something it can't ever be done! Quick name 500 laws that require Americans to do things that are not mentioned in the constitution and if we don't do that thing we can be fined or jailed. By the judge's logic all of those laws are also unconstitutional because they are not explicit mentioned in the constitution.

[Gerald Tarrant]

No specifically constitutional authority exists to mandate the purchase of health insurance."

I guess because the constitution does not mandate something it can't ever be done! Quick name 500 laws that require Americans to do things that are not mentioned in the constitution and if we don't do that thing we can be fined or jailed. By the judge's logic all of those laws are also unconstitutional because they are not explicit mentioned in the constitution.

That's not an accurate depiction of the argument. Many Federal laws can have local impact because of the Interstate Commerce Clause. That clause has been used to apply Federal drug laws to many local issues (including for instance the Americans With Disabilities Act). But it seems a bit raw to justify the Mandate (i.e. buy insurance or you will be fined) under the Commerce clause, since that's not commerce, that's the lack of commerce. If not purchasing something can be treated as Commerce that Feds can regulate, then there's no very little legal grounds to say what the Feds can't make laws about. Which is a rather large expansion of the powers under the commerce clause. This could boil down a few ways. First a fairly standard Conservative vs Liberal justice split where Conservatives oppose expanding the range of things that can be covered under the commerce clause. It's also possible to do a narrow ruling of this and just treat the mandate as a tax, and there's almost no real argument against Congress's ability to enact those.

I think it's important enough that the US Supreme Court can't leave the argument unresolved, either to say yes/no on the expansion of Congressional regulatory ability, or to determine whether or not it qualifies as a tax.

[StarshipTitanic]

This is a federal case it won't hit the VA Supreme Court but the Supreme type Court.

This is going to be tossed out in the Appeals and then be kicked up to the Supreme Court which will hopefully toss it out

That turn of events would make the mandate unconstitutional. One court has to reverse the ruling.

The hand-wringing about the personal mandate makes me wonder about Romney's presidential aspirations. Will he escape from his Romneycare legacy in Massachusetts?

[StarshipTitanic]

Henry Hudson, the federal judge, owns part of a consulting firm that worked with the Republicans against healthcare. One of that firm's clients? AG Cuccinelli.

Federal judge Henry E. Hudson's ownership of a stake worth between $15,000 and $50,000 in a GOP political consulting firm that worked against health care reform -- the very law against which he ruled today -- raises some ethics questions for some of the nation's top judicial ethics experts.

---

Late Update: So guess who ends up to be a client of Campaign Solutions? None other than Cuccinelli himself. He racked up $9,000 in website and credit card processing expenses in 2010, as noted in this story.

[Darksider]

How in the hell is that not a conflict of interests?

Why was he not asked to recuse himself from this case?

[Mr Bean]

How in the hell is that not a conflict of interests?

Why was he not asked to recuse himself from this case?

Judges generally speaking recuse themselves, no one asks them except in extreme cases.

[Beowulf]

That's not an accurate depiction of the argument. Many Federal laws can have local impact because of the Interstate Commerce Clause. That clause has been used to apply Federal drug laws to many local issues (including for instance the Americans With Disabilities Act). But it seems a bit raw to justify the Mandate (i.e. buy insurance or you will be fined) under the Commerce clause, since that's not commerce, that's the lack of commerce. If not purchasing something can be treated as Commerce that Feds can regulate, then there's no very little legal grounds to say what the Feds can't make laws about. Which is a rather large expansion of the powers under the commerce clause. This could boil down a few ways. First a fairly standard Conservative vs Liberal justice split where Conservatives oppose expanding the range of things that can be covered under the commerce clause. It's also possible to do a narrow ruling of this and just treat the mandate as a tax, and there's almost no real argument against Congress's ability to enact those.

I think it's important enough that the US Supreme Court can't leave the argument unresolved, either to say yes/no on the expansion of Congressional regulatory ability, or to determine whether or not it qualifies as a tax.

There's no real argument against Congress's ability to enact a tax. However, this would be the first tax that applied to those that didn't take an action, rather than a tax on taking an action. And if Congress can tax inaction, then there's no limit to what Congress can require to be done, under penalty of "tax".

[Edi]

The relevant point of law here is that people are free to choose who they enter into contracts with (freedom of association). The law is a basic assault on that, because it mandates people to enter into contracts with private parties even against their will. It further imposes a limitation on who they can enter into these contracts with, because selling health care insurance over state lines is AFAIK illegal, which severely limits the available pool.

I can't even begin to tell you how fucked up that is. It's essentially similar to a hypothetical law that would mandate that all Americans must shop at Walmart or Target or Costco regardless of whatever else they do.

Thus, the judge's decision has no error of law in it and he only threw out the individual mandate portion of the law, not the entire law itself even though that was what the plaintiff asked for.

[Lord MJ]

Well if this part of the law is thrown out, but the rest remains in effect, this isn't so bad right?

There will still be the problem with the fact that the reason this requirement was put into effect was to hold down the cost of providers having to provide insurance even if someone has a pre-existing condition, and that providers are not allowed to drop recipients. If sufficient numbers of people decline to purchase insurance, that means the cost of the insured will increase. But it could be that enough people would get insurance even without the requirement that it could all work out in the end.

[Sea Skimmer]

The relevant point of law here is that people are free to choose who they enter into contracts with (freedom of association). The law is a basic assault on that, because it mandates people to enter into contracts with private parties even against their will. It further imposes a limitation on who they can enter into these contracts with, because selling health care insurance over state lines is AFAIK illegal, which severely limits the available pool.

The state lines limitation is supposed to go away in the future, 2013 or 2014 I think. The insurance companies are supposed set up exchanges in which all providers polices in all states are offered together by that time.

I can't even begin to tell you how fucked up that is. It's essentially similar to a hypothetical law that would mandate that all Americans must shop at Walmart or Target or Costco regardless of whatever else they do.

I do think its fucked up myself, but legally I don’t think that comparison works because you do in fact have the option of directly paying the government a tax/fine instead of buying health insurance. You are not completely being forced into a private contract.

[White Haven]

Being able to opt for the punishment to avoid obeying the law doesn't make the law less...lawful. Legally you are not required to refrain from murdering someone. You just have to be willing to pay the government the rest of your natural life in prison if you want to do so.

[General Zod]

I do think its fucked up myself, but legally I don’t think that comparison works because you do in fact have the option of directly paying the government a tax/fine instead of buying health insurance. You are not completely being forced into a private contract.

What's someone supposed to do if they're homeless and have no means of paying for any insurance whatsoever? Do they get smacked with fines if they ever manage to get on their feet again after not having insurance for a long time? Sounds like a way of punishing people for being poor.

[Mr Bean]

I do think its fucked up myself, but legally I don’t think that comparison works because you do in fact have the option of directly paying the government a tax/fine instead of buying health insurance. You are not completely being forced into a private contract.

What's someone supposed to do if they're homeless and have no means of paying for any insurance whatsoever? Do they get smacked with fines if they ever manage to get on their feet again after not having insurance for a long time? Sounds like a way of punishing people for being poor.

There are tax breaks the poor can get in order to compensate for having to buy heath insurance. However they are not tied to the law meaning you can remove the tax credits from the law without removing the requirement to buy insurance. Yes it is a method of pushing people to poor to pay for heath-care. And yes I am in that group. I can't afford heath care now and the tax credits don't pay 100% of the cost.

[Rogue 9]

The government's argument is that without the individual mandate to compensate for the ban on rescission and pre-existing condition denials, insurance premiums will skyrocket, since healthy people will simply not buy insurance while the ill can't be denied.

[General Zod]

The government's argument is that without the individual mandate to compensate for the ban on rescission and pre-existing condition denials, insurance premiums will skyrocket, since healthy people will simply not buy insurance while the ill can't be denied.

It seems like it would be better to just create a health-care tax in addition to regular payroll stuff instead of this half-assed measure. But that would probably be socialist or something.

[Thanas]

That is what happens when you throw out the public option.

[Sea Skimmer]

What's someone supposed to do if they're homeless and have no means of paying for any insurance whatsoever? Do they get smacked with fines if they ever manage to get on their feet again after not having insurance for a long time? Sounds like a way of punishing people for being poor.

You could say the same thing about mandating that people buy car insurance or else can’t drive, and by effectively can’t live or work in a large section of the United States. It might not be the best thing ever, but saying its unfair to the poor isn't much of a basis to have a court overrule a law.

[Simon_Jester]

I'd argue that this is a bug in the US court system. Law should not discriminate by class.

[General Zod]

You could say the same thing about mandating that people buy car insurance or else can’t drive, and by effectively can’t live or work in a large section of the United States. It might not be the best thing ever, but saying its unfair to the poor isn't much of a basis to have a court overrule a law.

Except nobody has ever been fined for not driving before. You generally don't punish people because they can't do something without rather exceptional circumstances.