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Federal Suits Threaten Health Benefits

| October 27, 2010

From the White House, presidential assistant Stephanie Cutter rallies defenders of the health care bill against legal threats, health care journalist Sharon Ufberg reports.  Two federal lawsuits brought by state attorneys general imperil the newly won benefits.

Do you live in Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia or Washington? If so, then your state has gone to court, endangering your new health benefits by contesting the federal healthcare reform law. On Thursday last week, a Florida federal judge ruled that the largest suit—brought by 20 attorneys general—could move ahead.

Except for James Caldwell, the Democratic attorney general of Louisiana, all the state officials participating in the legal fight are Republicans. Having lost in the legislative arena back when Congress passed the reform in March 2010, opponents of the Affordable Care Act (ACA) have taken their grievances to the courtroom as constitutional challenges.

The lawsuits challenge enforcement of the healthcare reform law, especially the requirement for individuals to obtain insurance coverage or else pay a penalty.  Simply stated, they argue that the ACA oversteps the power of the federal government under the Constitution's Commerce Clause and that the new requirements diminish the independent decision-making of each state.

The attorneys general lawsuit also argues that the ACA imposes hefty costs on state governments by expanding Medicaid eligibility to millions of people who fall just above the poverty line. Medicaid programs are funded jointly by states and the federal government.

While the ultimate decision is likely to rest with the Supreme Court as with such landmark cases as the Civil Rights Act and the Social Security Act, for now the law remains in effect and Americans will be required to obtain health insurance starting in 2014.

In last week's ruling, Judge Roger Vinson in Pensacola, Florida, said the AG's suit could proceed to a full hearing in mid-December, although he dismissed four of the six claims brought against the act.  A federal judge in Richmond, Henry Hudson, heard oral arguments this week and said he would rule by the end of the year on a similar suit filed by the Virginia attorney general. But earlier this month, Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan ruled favorably for ACA when he dismissed a constitutional challenge in his state brought by three individuals and a nonprofit law firm.

White House blogger Stephanie Cutter celebrated the Michigan decision that she said "reinforces 70 years of Supreme Court precedent by concluding that the Affordable Care Act falls well within Congress’ power to regulate under the Commerce Clause." She threw out a challenge to the high court, saying that the Steeh ruling "reaffirms precedents that, in the words of Chief Justice Roberts, are designed to preserve the ‘judiciary’s proper role in our system of government’ and to ensure that our courts do not become forums for political debates.

Cutter, whose duties as assistant to the President for special projects includes outreach strategy on implementing health care reform, elaborated on two points in the ruling. Judge Steeh, she said, "rejects the plaintiff’s claim that the Affordable Care Act is an unprecedented exercise of the commerce power to regulate ‘inactivity.’ People who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay." Also, said Cutter, the judge recognized that "the landmark insurance market protections, including banning insurers from denying coverage to individuals with pre-existing conditions, can only be effective if everyone is part of the system.”

Republican campaigns are being deluged with money from the insurance industry in hopes of finding a way to circumvent the regulations in the new health care law.  Reports indicate that the largest insurance lobbyists and their cohorts have given Republican candidates triple the amount of money that they've given Democratic politicians. A courtroom decision against the law's mandates would strengthen any GOP effort to repeal or defund the ACA if Republicans take over the House or Senate in the mid-term elections.

In a more positive effort in California, Governor Arnold Schwarzenegger signed into law AB 1602 and SB 900. Seen as establishing the first "Health Exchange" as envisioned under ACA, this type of resource will serve as a clearinghouse for information about health plans, services provided, and costs. It will be a webpage in the genre of a Kayak.com, Sidestep.com or Priceline.com site for health care insurance options.

Today we can thank our elected officials who passed the Affordable Care Act. Now, insurance companies cannot drop a person’s coverage when they get sick.  Every new plan will provide preventive services, mammograms and colonoscopies, with no out-of-pocket expense.  Parents can continue to insure their children until they turn 26 and insurance companies may no longer place a lifetime limit on the dollar amount of care available to an insured. We must look to the courts to protect these and other advances, and to the state legislatures to follow California's lead in implementing the provisions envisioned by federal law.

The views expressed in this commentary are those of the author alone and do not represent WMC. WMC is a 501(c)(3) organization and does not endorse candidates.

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