Tuesday, May 25, 2010

Feds: Virginia has no grounds to block health care reform law

Indicating that Congress is well within its right to require individuals to secure private health insurance under new federal law, attorneys for the Obama Administration are asking a federal judge to dismiss a suit filed by the Commonwealth of Virginia.

With President Barack Obama completing his signature on health reform law in March, Virginia’s Republican Attorney General, Ken Cuccinelli filed suit in the U.S. District Court for the Eastern District of Virginia. The suit names Kathleen Sebelius, the U.S. Secretary of the Department of Health and Human Services, as the defendant and is one of several federal lawsuits to challenge health reform law.

Virginia, however, was first to file its suit, outside of a multi-state suit filed in Florida on behalf of 20 other states.

As part of his argument, Cuccinelli claimed the Virginia Health Care Freedom Act, passed by the Virginia General Assembly and signed by Gov. Bob McDonnell would rebuff the federal government from requiring individuals to secure private health insurance.

In its court filing of May 24, lawyers for the Obama Administration say “a state cannot, however, manufacture its own standing to challenge a federal law by the simple expedient of passing a statute purporting to nullify it.

“Otherwise, a state could import almost any political or policy dispute into federal court by enacting its side of the argument into state law,” said the filing, signed by Assistant U.S. Attorney General Tony West, Deputy Assistant Attorney General Ian Heath Gershengorn and U.S. Attorney Neil MacBride.

Regarding the individual mandate to secure private insurance, or face a penalty starting in 2014, the federal attorneys said the provision applies only to individuals and not the state government.

“Because Virginia itself neither has sustained a direct or concrete injury, nor is in immediate danger of such an injury, it does not have standing to sue,” the filing states.

Spreading risk, saving money

The Obama Administration claims that Congress is well within its power under the Commerce Clause, as the body “understood that virtually everyone at some point will need medical services, which cost money,” the lawyers state.

Congress estimated that Americans spent $2.5 trillion on health care in 2009 as 45 million Americans are uninsured, mostly because they cannot afford coverage, the filing states. However, these individual still require medical care – to the tune of $43 billion in 2008 – which is passed on to the health care market.

To aid this problem, Congress enacted many initiatives in the Patient Protection and Affordable Care Act, the attorneys claim, including health insurance exchanges, also set for 2014, and the individual mandate.

“The ‘minimum coverage provision’ that Virginia challenges…is a linchpin of Congress’ reform plan,” the attorneys wrote, adding that those who can afford care spread risk across a larger pool.

In concluding its motion to dismiss, lawyers for the Obama Administration say it is outside of the federal court’s purview, but if it did, the individual mandate “falls within Congress’s authority to regulate interstate commerce, as well as power to lay taxes and make expenditures for the general welfare.”

In a statement to the Washington Post, Cuccinelli defended his suit, indicating that a person who chooses not to purchase health insurance is not engaged in commerce.

“If Congress has the power to force Americans to buy health insurance, then there’s nothing to stop Congress from forcing us to buy any product,” he told the Post.

By Keith L. Martin, kmweb@ifamedia.com

Source: Insurance & Financial Advisor

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