Health Care Reform Declared Unconstitutional

This news has just broken.  As expected, a federal Judge in Virginia has ruled that many of the major provisions of the Obama Health Care Reform Act are unconstitutional.  This probably means the law will be reviewed by the Supreme Court.   This first link is from the NYT.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.

The judge wrote that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.”

Judge Hudson is the third district court judge to reach a determination on the merits in one of the two dozen lawsuits filed against the health care law. The others — in Detroit and Lynchburg, Va. — have upheld the law. Lawyers on both sides said the appellate process could last another two years before the Supreme Court settles the dispute.

The case is Virginia v. Sebelius. The ruling is posted  here.

Politico has  analysis up about the ruling that finds that the Individual Mandate provision “exceeds the constitutional boundaries of congressional power.”  The Judge has not blocked implementation of the act.

The White House does not believe the decision will have any impact on the ongoing implementation of the health care law. Officials downplayed the suggestion that rulings against the law would create uncertainty in the middle of its implementation, largely because some of the key provisions don’t take effect until 2014. The White House anticipates all challenges to the law will have worked their way through the system by then.

The Virginia ruling has been a longtime in the making. The state was the first to pass a law barring the mandated purchase of health insurance, setting the stage for Cuccinelli’s lawsuit. Cuccinelli’s suit, like most of the health reform challenges, argues that the individual mandate – which means that everyone must buy health insurance — is an unconstitutional expansion of the Commerce Clause.

Administration officials concede that the lack of a mandate would cut the number of uninsured people who would get coverage in half and threaten the ban on denying coverage people with pre-existing conditions – one of the president’s signature selling points on the law. Other parts of the law, such as the insurance exchanges and Medicaid expansion, could arguably move forward unaffected.

In related news, a Rasmussen poll has shown that the act is still  unpopular.  Support for repeal reached a high in September.

The latest Rasmussen Reports national telephone survey shows that 60% of Likely U.S. Voters at least somewhat favor repeal of the health care law while 34% are opposed. As has been the case since the law was first passed, those who favor repeal feel more passionately than those who want to keep the law–46% Strongly Favor repeal while just 23% who are Strongly Opposed. (To see survey question wording, click here.)

Total support for repeal is up four points from a week ago but consistent with opposition to the law for months. Support for repeal has ranged from 50% to 63% in weekly tracking since Democrats in Congress passed the law in late March.

Voters remain almost even divided over whether the law will mean they have to change their existing health insurance coverage. Forty-four percent (44%) think it is at least somewhat likely they will have to change their health insurance, including 20% who say it is Very Likely. Nearly as many (42%) believe they are unlikely to have to change their coverage, with 15% who say it is Not Likely At All. Thirteen percent (13%) are not sure.

BB here–

Ezra Klein says that unnamed “health reformers” are pleased with the ruling by Judge Hudson, who was a Bush appointee. Two other judges who were appointed by Clinton have already ruled the individual mandate constitutional. Klein writes:

The real danger to health-care reform is not that the individual mandate will be struck down by the courts. That’d be a problem, but there are a variety of ways to restructure the individual mandate such that it doesn’t penalize anyone for deciding not to do something (which is the core of the conservative’s legal argument against the provision). Here’s one suggestion from Paul Starr, for instance. The danger is that, in striking down the individual mandate, the court would also strike down the rest of the bill. In fact, that’s exactly what the plaintiff has asked Hudson to do.

Hudson pointedly refused. “The Court will sever only Section 1501 [the individual mandate] and directly-dependent provisions which make specific reference to 1501.” That last clause has made a lot of pro-reform legal analysts very happy. Go to the text of the health-care law and run a search for “1501.” It appears exactly twice in the bill: In the table of contents, and in the title of the section. There do not appear to be other sections that make “specific reference” to the provision, even if you could argue that they are “directly dependent” on the provision. The attachment of the “specific reference” language appears to sharply limit the scope of the court’s action.

At FDL, David Dayen writes that it isn’t too late for Congress to amend the bill through reconciliation. He also points out:

This problem, of course, could have completely been avoided. You don’t need an individual mandate penalty forcing Americans to buy insurance from a private company to create a near universal health care system. There are dozens of ways to design a health care system without using the government to force people to give money to private companies.

An easy way around the constitutional issue would have been to include a public option and make the whole system more like Medicare. Instead of an individual mandate, you could “tax” individuals and provide them with insurance through the public option. You could then grant everyone who had private insurance a waiver from the tax. Even if the state doesn’t have the right to compel an individual to buy a private product, its constitutional right to tax individuals in exchange for government services is not in doubt.

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48 Comments on “Health Care Reform Declared Unconstitutional”

  1. Minkoff Minx says:

    Hey Dak that was quick…I will put this link here, I just posted it on Monday Reads:
    Federal Judge Finds Individual Mandate Unconstitutional | FDL News Desk

    As for what happens if SCOTUS affirms this ruling, it’s not as simple as assuming that the law could go forward by just jettisoning the mandate, however. The drafters of the law did not include a severability clause that would have allowed the whole law to easily go forward without elements ruled unconstitutional. Depending on the rulings, a judge could actually take down most, if not all, of the law. However, Hudson said specifically in his ruling that any portion of the law which does not rest on the individual mandate could proceed.

    The outcome may get fast-tracked to the Supreme Court…

  2. Thursday's Child says:

    I’d like to see Obamacare thrown out. I would be required to buy pricey junk insurance I couldn’t afford and then be fined when I didn’t. I’d like to see it go back to the drawing board and to come out single payer universal health care, Medicare for all.

  3. cwaltz says:

    What I found interesting is he makes the distinction that the government can not force someone to buy from a PRIVATE entity. As I said in the last thread it aears that if Obama had created a PUBLIC federal option that would have been the default if you chose not to buy from a private entity the ruling might have been different.

    Obama’s aversion to stumping for a government solution may tank his centeriece legislation.

    • fiscalliberal says:

      The fundamental question is: What do we do when people show up at the emergency rooms without insurance, do we treat them or do we deny service. Oh by the way, if we treat them, what should we do with the Bill. Hillary said that it averages out to $1200 per person which is free loading onto other peoples insurance. It happens by the hospital chargeing it off as a loss which then gets absorbed into the paying policies.

      We just need to get hard headed on this stuff to make people understand that all these legal niceties do not solve the problem.

      • cwaltz says:

        We treat them.

        There should have been a government run option that would have been a default option for those that didn’t want to buy from private entities. It should have had the same restrictions on it that Medicare did. Basically it should have required the hospitals to cover patients if they want federal dollars. It should have gotten rid of Medicaid and provided subsidies for the poor to use the federal exchange. Unfortunately it’s start up would have cost money and apparently we’re only willing to spend money on the rich.

    • janicen says:

      cwaltz @12:31, I think this highlights how Obama and the Democrats got rolled on the healthcare legislation. The Republicans likely knew all along that the bill was unconstitutional without the public option. That’s why they insisted it be taken off the table right from the start.

    • bostonboomer says:

      If we just had medicare for all, the government could collect taxes and no one would even have to have insurance. That would be the cheapest option too. But that was off the table from day one.

      • NW Luna says:

        “medicare for all”

        You’re so sensible, BB. Please run for office.

        And I was so glad to read today that forcing someone to buy a private product has nothing to do with Congress’ authority over commerce. Just hope that decision doesn’t get overruled.

  4. Ann says:

    IMO

    public option = legal

    mandating a buy from a private company and fining those that do not buy = illegal

    That seems to be what so many have said/thought.

  5. Health says:

    Yes…not unexpected and perhaps the beginning of a long battle. But so much can change between now and 2014. Defunding seems to be a popular notion.

    • Woman Voter says:

      Like I could get another 83% Insruance RATE HIKE AGAIN! Obama isn’t a reader, albeit he spends more time supposedly writing, but he didn’t read this bill that is for sure.

      Oh, HEALTH where is the PUBLIC OPTION??? Personally I don’t intend to take another chance with someone that took out the Public Option to please the GOP, when he could have changed the lives of so many and brought on some real competition to bring about affordable health care.

  6. I have to agree that killing the individual mandate does little to solve the overall problem. Health care services need to be paid for. If people don’t have to buy health insurance, then you have to implement taxes to cover the costs or somehow prevent people from using the health services when they haven’t contributed. This is especially the case in the emergency rooms where denying service is fairly difficult given the state in which people often arrive.

    • Woman Voter says:

      Had Obama kept the Public Option in, people would have been able to afford insurance and care. It is possible, but not when all the focus was on fluffing the pillows of the insurance companies, without making insurance afforable.

      The Pulbic Option, should have been an option.

  7. Dee says:

    And on another note – Moody’s does not like The Tax Deal.

    They may downgrade our AAA rating if it goes through.

    oh the irony

    http://www.moneynews.com/Headline/Moodys-Cut-US-Rating/2010/12/13/id/379784?s=al&promo_code=B498-1

  8. SHV says:

    “ethanol is a waste for every one except corn farmers and corn farmers’ politicians.”
    **********
    A short article on Energy Economics (wonks only)

    “Applying Time to Energy Analysis”

    http://www.theoildrum.com/node/7147

    Corn based Ethanol, in addition to being a money pit and other problems, is an energy sink.

  9. dakinikat says:

    Richard Holbrooke has died.

  10. Fannie says:

    Richard Holbrooke, he was only 24 years old when he became a significant diplomat. That’s quite amazing. He never knew his family genealogy, and had searched and searched for a connection to who his father was. I can only hope that now he knows.

    R.I.P.

    • soupcity says:

      Never knew that, wow. Like you said, I hope he knows now. I’m surprised he made it to the hospital in the first place. Gotta be strong to survive that initial aortic tear. RIP.

    • Minkoff Minx says:

      Remarks from Madame Secretary re: Richard Holbrooke

      This was today, before the news came that he had died.

      “But one very dear friend in particular is not with us, and our thoughts are with him tonight. Ambassador Richard Holbrooke has been a giant of the diplomatic corps for almost 50 years. He is practically synonymous with American foreign policy of that time period. He’s taken on the hardest assignments, from Vietnam to the Balkans to Afghanistan and Pakistan. And this week, his doctors are learning what diplomats and dictators around the world have long known: There’s nobody tougher than Richard Holbrooke. He’s a fierce negotiator. I’m sure there are some shoulders here tonight that are still a little bit sore from his arm-twisting.

      But he is a fiercer friend and a beloved mentor and an invaluable counselor. He has been a friend of mine for many years and I am deeply grateful for his presence and support. When I came to the State Department, I was delighted to be able to bring Richard in and give him one of the most difficult challenges that any diplomat can face. And he immediately put together an absolutely world class staff. It represents what we believe should be the organizational model for the future – people not only from throughout our own government, but even representatives from other governments all working together. And we know that with Richard, loyalty runs deep and it runs both ways. So tonight, our thoughts and prayers are with Ambassador Holbrooke, his wife Kati, their family, who are here with us as well.”

      Remarks at Holiday Reception for the Chiefs of Diplomatic Missions to the United States

  11. Dario says:

    There are dozens of ways to design a health care system without using the government to force people to give money to private companies.

    Making people pay to private insurance companies was not a bug but a feature.

  12. bostonboomer says:

    Henry Hudson, the judge in the HCR case, has a conflict of interest. He had a fairly large investment in the Republican consulting firm that has opposed the health care law. Also the VA atty general donated $9,000 to something associated with the same firm this year. This is from Keith Olberman’s show–I can’t find the details on line yet.

    • Minkoff Minx says:

      WH Response to Individual Mandate Court Ruling: We Have to Have the Mandate, or Else! | FDL News Desk

      Here is a Dayen article about the WH official word on this ruling…I heard about this judge and his connections with that GOP firm…”shocking”

      • bostonboomer says:

        Actually, the conflict for the Attorney General is worse. And Dalia Lithwick was on Rachel tonight. She says this attorney general in VA wants to rewrite the constitution. He’s apparently very right wing.

      • Uppity Woman says:

        I have to tell the truth. Obamacare has been a disaster for me and any of my friends who are single pay. I got a premium hike in January of 32+ percent and got a letter in October saying my premium would rise again by nearly 15% in January. Then, last week I got another letter saying the rate rise total was a mistake and it’s closer to 24%. Here in NY, a single pay crappy HMO is more than a thousand dollars a month for ONE person. For a family, it’s between 2000 and 4000 a month. I kid you not. At this very moment before the new hike, the cost of insuring two people is more money than any mortgate we ever imagined. He has priced me out of the insurance market with his scam and I’m still waiting for his bulls*t promise of reducing premiums by $2500 a year. Obama is deliberately crippling the middle class and he knows it. I despise him for this. I have never been uninsured and have paid six figures in premiums over the past decade. But this time, this pig has priced me out of the market. I predict Obamacare is about to create MORE uninsured due to the outrageous rate increases. I hope this program goes down in flames. And even if it does we all know there won’t be a REDUCTION in premiums, the insurers will just toot along fat and happy with the extra profits. This man is a curse upon the health of Americans and the insurers will be laughing all the way to the bank on this one.

        • bostonboomer says:

          I agree.

        • Woman Voter says:

          Uppity Woman,

          I agree, this July my health Insurance Skyrocked by a premium hike of 83%, I thought I opened the mortgage. My sister, was, chiding me about carrying on about Obama until I dropped her premium hike by. I have never heard that women scream with such a high pitch, “Are they joking!”….NOPE.

          Next time I saw her, she had contacted the insurance commissioner, her congressperson, her State reps and even some local one, and she isn’t into politics. The year before the premiums hikes were 23% and this last one, was over the top.

          My brother, dropped his insurance and he by the way voted for Obama, but says he will go Green next election. Obama was a big let down for my brother and I presume so many others too.

          Any hoo, I hear ya and I agree, they have to do some thing.

        • Minkoff Minx says:

          I agree too UW…I really wanted HCR but this Obamacare is ridiculous. My mothers premiums when up too, and she had to cancel her health insurance.

        • Sima says:

          Every word you said is true. I completely agree.

          I will never be able to be insured, until I reach the old age. I simply can’t afford it and the way things are going, I won’t be able to afford it even with government help in old age.

  13. Chris Taus says:

    I think the judge was right–this was heard on motions for summary judgement and the other 400 provisions were not involved. The doctrine of severability does not allow the dumping of an entire law in the absence of a severability provision, just all those provisions intertwined with the provision which is struck down. And that is exactly what Judge Hudson has done.

    • bostonboomer says:

      I think the judge is right too. I don’t see how it could be constitutional for the government to force people to buy something from a private company. In the case of car insurance, you still have a choice of whether to buy a car. The plan should have been set up like Medicare, paid for with a tax, and with an inexpensive government run plan as a choice. But that is not what AHIP wanted.

      My understanding is that the bill doesn’t include a severability clause, but that could still be remedied. Frankly, I hope SCOTUS shoots the whole thing down, and they are forced to start over.

  14. paper doll says:

    It’s all about stealing every last dime, sticking us with thier China loans and then throwing our broke old ass onto the street… If we looked at legacy parties as crime families…much becomes very clear.imo