Legal Challenges

Both sides of the debate over healthcare's individual coverage mandate were reeling Wednesday from a conservative judge's ruling in favor of the provision.

Judge Jeffrey Sutton joined a 2-1 decision upholding the mandate as constitutional — the first appeals court ruling on the issue. Sutton was appointed by President George W. Bush and clerked for Supreme Court Justice Antonin Scalia. Prominent conservatives said they were shocked by his support for the mandate, and liberals were eager to trumpet Sutton's decision.

Sutton sided with the government's argument that the insurance mandate regulates how people pay for healthcare, rather than forcing them to buy it. The policy is therefore within Congress's power to regulate commerce, he said.

Healthwatch's Sam Baker has more.

Norquist backs Lieberman on Medicare: Anti-tax activist Grover Norquist said Wednesday that he supports the Medicare plan released by Sens. Joe Lieberman (I-Conn.) and Tom Coburn (R-Okla.). The Lieberman plan would require higher-income beneficiaries to pay more out-of-pocket costs and raise the Medicare eligibility age to 67. Read the Healthwatch story.

Exchange over exchanges: A controversial new report suggesting millions of American workers will get dumped into the healthcare reform law's insurance exchanges is a "great thing," former Vermont Gov. Howard Dean said Wednesday.

Legal observers expect newly installed Solicitor General Donald Verrilli to personally argue cases over the healthcare reform law, as his predecessor did.

Verrilli was sworn in as solicitor general on Friday. He replaced acting Solicitor General Neal Katyal, who argued the healthcare suits himself in federal appeals courts. Legal scholars said that move was unusual — although the solicitor general represents the federal government before the Supreme Court, the Justice Department rarely sends its top litigator into circuit courts.

Katyal’s presence was a sign of how serious the cases are, scholars said.

Simon Lazarus, public policy counsel for the National Senior Citizens’ Law Center, said he expects Verrilli will also handle arguments over the healthcare law’s requirement that most people buy insurance.

Lawsuit advances: The highest-profile legal challenge to the healthcare reform law took another step toward the U.S. Supreme Court on Wednesday. A three-judge panel of the 11th Circuit Court of Appeals heard oral arguments in the suit brought by 26 state attorneys general, and people in attendance said the judges seemed skeptical of the federal government's arguments.

Former Solicitor General Walter Dellinger said the judges spent a lot of time debating whether the entire healthcare law would fail if the individual coverage mandate were ruled unconstitutional. They won't need to answer that question unless they strike down the mandate.

Healthwatch has more reaction to the arguments.

White House, GOP trade barbs over health insurance: The White House and House Republicans are in a tough fight to shape public perception of the healthcare reform law after a consulting firm said it could lead to 30 percent of employers dropping coverage starting in 2014.

What the report shows, said Energy and Commerce Health panel member Cathy McMorris Rodgers (R-Wash.), is that "what President Obama promised during the healthcare — that if you liked your health insurance plan you'd be able to keep it — is really not true. That is an unkept promise."

The Obama administration responded with a post on the White House blog calling the report, from McKinsey & Company, an "outlier." Healthwatch's Julian Pecquet has the story.

Carney weighs in: White House spokesman Jay Carney called the report "starkly at odds with history" during Wednesday's briefing. Read The Hill's story.

Health technology boost: The Obama administration on Wednesday launched a new initiative aimed at spurring health information technology innovations and awarded the first $5 million to two projects.

In the highest-profile challenge to the healthcare reform law, judges appeared skeptical of the federal government's defense.

The legal battle over healthcare reform’s coverage mandate is often portrayed as a battle between states and the federal government. But a group of state legislators says it’s not that simple.

More than 150 state legislators have signed a brief supporting the requirement that most people buy insurance. State attorneys general from 26 states have sued over the policy, saying it’s unconstitutional.

“The benefits of national health care reform for states and their citizens will be substantial, in part because the size of the problem with health care is so great,” the lawmakers’ brief says.

Read more...

The Justice Department on Friday asked a federal court to dismiss a healthcare lawsuit in which oral arguments are scheduled for next week.

The motion comes after one of the plaintiffs in the suit acknowledged that she receives health insurance from her employer. According to the Justice Department, she therefore can’t sue over the new requirement that most people buy insurance.

The Obama administration can expect tough questioning from the three appeals judges chosen Wednesday to hear the multi-state challenge to the healthcare reform law.

Unlike the three Democratic appointees who heard the first appeals arguments in Richmond earlier this month, the 11th Circuit panel includes judges appointed by presidents of both parties. The Atlanta-based court is slated to hear appeal arguments June 8.

The 26-state lawsuit was filed in Florida the day healthcare reform was signed into law and is seen as the highest-profile challenge to the law's requirement that everyone buy insurance. District Judge Roger Vinson ruled earlier this year that the mandate and, as a result, the whole law are unconstitutional.

The judges are: 

• Chief Judge Joel Dubina, a George H.W. Bush appointee; 

• Judge Frank Hull, a Bill Clinton appointee; and

• Judge Stanley Marcus, a Clinton Republican appointee.

Also Wednesday, the states filed their reply brief in the multi-state case.

The federal government laid down an aggressive defense of the new healthcare law in court filings Wednesday, saying the law’s challengers are endorsing a system that would leave people bleeding in the street after a car accident.

The Justice Department filed its reply brief Wednesday in a suit brought by 26 state attorneys general and the National Federation of Independent Business.

It is the highest-profile challenge to the healthcare law’s requirement that most people buy insurance — an issue that’s likely to end up at the U.S. Supreme Court just months before the 2012 election.

The states’ argument against the mandate implies that “accident victims and pregnant women in labor should be turned away from the hospital if they cannot produce an insurance certificate,” the Justice Department’s brief says.

Virginia Attorney General Ken Cuccinelli took to Fox News Tuesday evening to defend his challenge to the healthcare reform law following appeals court arguments that most observers believe went in the government's favor.

Cuccinelli told the news channel that the lawsuit's outcome will hinge on whether the Obama administration succeeds in persuading the court that the mandate that everyone buy insurance is a tax rather than a penalty. Cuccinelli, a Republican, filed suit against the law the very day it was signed into law and has a lot riding on the outcome should be choose to run for governor in 2013.

"They started with a tax and they changed the name to a penalty," Cuccinelli told anchor Matha MacCallum. "But what matters under the law is how it operates. And if everybody obeys the law, obeys the diktat to buy the government- approved health insurance, not a penny is paid. It doesn't raise a single penny. So it's not a tax, it's only punishment if you don't obey the government. That's a penalty."

The three-judge panel of Democratic appointees that heard Cuccinelli's challenge in Richmond on Tuesday however seemed more interested in picking apart challengers' assertion that the law would for the first time regulate "inactivity." Challengers say the law forbids people from not being insured, but the government contends that everyone participates in healthcare market and uninsured people merely shift the cost of their care to taxpayers and people who have insurance, in the form of higher premiums.

All three of the judges hearing Virginia's challenge on Tuesday were appointed to the court by Democrats.