Judge Hears Arguments on Health Overhaul Challenge

For the first time since President Obama signed the health care law, the federal government faced off in open court Thursday against one of the 21 states that are seeking to invalidate the law by challenging the requirement that most Americans obtain insurance.

In a two-hour hearing before a federal district judge here, Justice Department lawyers argued that the Commonwealth of Virginia did not have legal standing to challenge the law, and that it could not, in any event, win its argument that Congress had exceeded its constitutional authority.

Judge Henry E. Hudson, who was appointed by the first President George Bush, questioned both sides aggressively and said he would rule within 30 days. The judge predicted that the challenges to the health care law “will at some point in time define the outer boundaries” of federal regulatory power.

Virginia’s lawsuit, filed by Attorney General Ken T. Cuccinelli II with the support of Gov. Robert F. McDonnell, is one of more than 15 legal challenges to various components of the health care law. Both Mr. Cuccinelli and Mr. McDonnell are Republicans.

Filed immediately after the measure was signed, the Virginia case is the first to reach oral arguments on a motion by the Justice Department to dismiss the lawsuit. If Virginia survives that challenge to its standing to sue, a second hearing in October, on the state’s motion for summary judgment, will put Judge Hudson in position to decide the constitutional merits.

Twenty other states, led by Attorney General Bill McCollum of Florida, a Republican who is running for governor, have joined in a similar lawsuit in federal district court in Pensacola, Fla. The first oral arguments in that case are scheduled for September. Two other cases, one in Michigan and one in California, have hearings scheduled for this month.

A ruling this month in Virginia would have no direct impact on the other cases, but Judge Hudson’s reasoning could be taken into consideration by his counterparts in other states.

Assuming the cases are allowed to move forward, the attorneys general hope the United States Supreme Court will ultimately strike down the health care law and, in the process, clarify the limits on Congress’s authority to regulate interstate commerce. Their central argument is that the Commerce Clause of the Constitution cannot be interpreted to allow government penalties on Americans for refusing to buy a product, or as Virginia’s lawsuit puts it for “an absence of commerce.”

“We’re saying you can’t draft someone into activity so you can regulate him,” Virginia’s solicitor general, E. Duncan Getchell Jr., told Judge Hudson.

Mr. Getchell said the Justice Department’s defense of the law “evinces a hostility to federalism.” He called the law “a radical, radical claim of power” that, if upheld, would allow the federal government to require citizens to buy most any commercial product in the name of advancing the national interest.

Ian H. Gershengorn, a deputy assistant United States attorney general, countered that the insurance requirement fitted well within the Supreme Court’s parameters for Congressional regulation of interstate commerce. A choice not to obtain coverage, he said, is not inactivity, as Virginia and the other state plaintiffs claim, but an active decision to pay for future medical care out of pocket. Because many Americans cannot afford the cost of surgeries and hospitalization, their choice to go uninsured shifts the uncompensated cost of their care to hospitals, taxpayers and commercial policyholders.

“What Congress did,” Mr. Gershengorn said, “is regulate the way that people who consume health care will ultimately pay for it. The appearance of inactivity here is just an illusion.”

Because the health care law would impose an income tax penalty on those who do not obtain insurance, the Justice Department is also defending it as a constitutional exercise of Congress’s power to levy certain taxes.

That placed Mr. Gershengorn in the politically awkward position of insisting that the penalty was in fact a tax, although Mr. Obama and leading Democrats in Congress have asserted vigorously that the measure is not a tax increase.

Conversely, Mr. Getchell, representing Republican elected officials, found himself arguing that it was merely a penalty. If the law worked ideally, he said, everyone would obtain insurance and no revenue would be raised, meaning it could not be a tax.

Mr. Cuccinelli, who attended the hearing, has said he chose to file a separate lawsuit rather than join the Florida case because Virginia has unique circumstances. In March, it became the first state to enact a law intended to nullify the federal law by declaring that no resident could be required to obtain health insurance. The law took effect on Thursday.

The Justice Department’s court filings contend that Virginia cannot “manufacture its own standing” to challenge a federal law simply by passing a statute seeking to nullify an act of Congress. In court, Mr. Gershengorn also said the state had no authority to sue because the individual mandate, as the insurance requirement is called, imposes “no concrete injury” on states and does not take effect until 2014.

In an interview, the state’s secretary of health and human resources, Dr. William A. Hazel, said the state’s nullification law and the court challenge reflected public distaste in Virginia for the health care overhaul. Without citing examples, he said that hostility toward the law in Richmond had prompted something of a wait-and-see approach for preparing to carry it out.

“It’s like anything,” Dr. Hazel said. “If everyone felt there was an overwhelming mandate for health system reform, clearly you would be eager to move. In our case, we know there are issues to be resolved. It causes us to stop and pause and say, What can we do that’s consistent with what Virginians want?”

By Kevin Sack

Source: NYTimes.com