U.S. judge rejects key part of new healthcare law

The ruling in Virginia strikes the most serious legal blow yet to the Obama-backed law requiring Americans to get health insurance.

By Noam N. Levey and David G. Savage, Tribune Washington Bureau

10:09 AM PST, December 13, 2010 - Los Angeles Times

Washington

A federal judge in Virginia on Monday rejected part of the new healthcare law, becoming the first court to rule that Congress had placed an unconstitutional requirement on Americans to get health insurance.

The much-anticipated decision, which the Obama administration is expected to appeal, will not stop implementation of the sweeping overhaul that the president signed in March.

The new mandate is not set to go into effect until 2014, when Americans will also gain guarantees that they can get health benefits even if they are sick.

On Monday, U.S. District Judge Henry Hudson denied a request from Virginia Atty. Gen. Ken Cuccinelli, the lead plaintiff, to stop implementation of the law while higher courts consider the case.

But the ruling by Hudson, a Republican appointed to the bench by President George W. Bush, strikes the most serious legal blow to the law thus far and moves the case toward an expected showdown in the U.S. Supreme Court, perhaps in 2012.

The core of the state of Virginia's lawsuit is the unprecedented insurance mandate in the new law, which will require most Americans to get health insurance starting in 2014 and penalize those who do not.

The requirement is seen as critical by most health policy experts because it would spread risk more broadly, controlling insurance premiums for everyone and allowing federal government to prohibit insurers from denying coverage to higher-risk Americans with preexisting medical conditions.

Without a mandate, Americans would be able to buy insurance only when they got sick, driving up premiums, a phenomenon that has occurred in several states that have guaranteed coverage without any requirement.

Obama administration lawyers have defended the mandate as permissible under what is known as the Commerce Clause, which gives the federal government broad powers to regulate interstate economic activity.

But conservatives have countered that the new law oversteps this authority by requiring Americans to obtain a specific product, something that has never before been mandated by the federal government.

Hudson was unequivocal in his 42-page decision.

"Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause power to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market," the judge concluded.

He added: "Despite the laudable intentions of Congress in enacting a comprehensive and transformative healthcare regime, the legislative process must still operate within constitutional bounds."

Other federal judges in Virginia and Michigan have offered different interpretations, dismissing constitutional challenges to the new mandate.

But the Virginia case is one of two being pursued largely by Republican-elected officials in front of conservative judges that are seen as the biggest challenge to the new law.

The other case — being led by Florida Atty. Gen. Bill McCollum — is scheduled for a hearing in Pensacola, Fla., later this week.

Nineteen states have joined the suit: Alabama, Alaska, Arizona, Colorado, Georgia, Indiana, Idaho, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington.

Except for Louisiana, the states are represented by Republican attorneys general or governors.

The National Federation of Independent Business, a leading conservative small-business group, has also joined the suit. And newly elected GOP governors in several more states have indicated they will join the suit when they take office.

noam.levey@latimes.com