Legal Challenges

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.

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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.

The Obama administration released a report Tuesday that defends the need for healthcare reform's individual mandate ahead of the first appeals court arguments challenging the requirement. 

Uninsured families can only afford to pay about 12 percent of hospitalization costs on average, according to the study. In all, only about 5 percent of uninsured patients' hospital bills are paid in full.

The result, the study says, is a heightened risk of financial catastrophe for people who can't find insurance because of a pre-existing condition, or can't afford it, and billions of dollars' worth of cost-shifting to insured patients' premiums.

"To lower the cost of healthcare for everyone, we have to stop making those who act responsibly pick up the healthcare tab for those who don’t — and that means we need everyone to be a part of the health insurance marketplace," White House communications official Stephanie Cutter said on the White House blog. "Bringing everyone into the system will also enable us to finally ban discrimination against individuals with pre-existing conditions."

The liberal Health Care for America Now (HCAN) breaks down the state of play ahead of Tuesday's appeal of the healthcare reform law in a new column this morning at the Huffington Post.

The 4th Circuit Court of Appeals in Richmond is the first to hear arguments at the appeals level, and observers will be watching the three-judge panel closely for any signs of how they're inclined to rule.

"The encouraging news for those of us who support the law … is that the results so far are good: Of the 31 lawsuits challenging the ACA in federal courts, only two judges have ruled against part or all of the law," writes HCAN Executive Director Ethan Rome. "Most of the other cases have been dismissed or are still wending their way through the lower courts. Of the five judges who have ruled on the merits, three have upheld the law."

The plaintiffs in the 26-state challenge against the healthcare reform law filed their briefs in the 11th Circuit Court of Appeals on Wednesday.

Florida, the lead plaintiff, argued that the law unconstitutionally infringes on individual freedoms, exceeds Congress’s enumerated powers, and coerces the states in violation of the Tenth Amendment. The brief challenges both the law's individual mandate that everyone have health insurance and its vast expansion of Medicaid.

It goes on to argue that the whole law should be struck down if part of it are found to be unconstitutional.

"There is no basis for suggesting that the mandate is severable from some but not all of the core, interrelated health insurance reforms – and the government is careful not to do so in this Court, and not to argue that Congress would have enacted any of the ACA’s core insurance reforms without the individual mandate," the brief reads.

The National Federation of Independent Business, a co-plaintiff, also filed a brief challenging the law.

"Congress does not have the power to dictate that its citizens engage in a specific area of commerce," Karen Harned, executive director of NFIB's Small Business Legal Center, said in a statement Wednesday. "The individual mandate in the health care law does not regulate commerce itself nor does it regulate a class of economic activities that substantially affect interstate commerce. Instead, for the first time, the mandate compels all Americans to engage in commerce and divert precious resources to buy a product they neither need nor want."

Federal Judge Roger Vinson ruled Jan. 31 that the entire law should be struck down after finding its individual mandate unconstitutional. The appeals court is scheduled to hear oral arguments June 8.

Update: This post was updated at 4:30 p.m. with references to Florida's brief. 

Despite legal challenges and Republican opposition, the former president thinks healthcare reform will stay largely in tact.