Status of Legal Challenges to Obama Health Reform Law

December 13, 2010

Within hours of President Barack Obama signing into law last March the healthcare reforms he had championed, several states filed lawsuits challenging the constitutionality of new requirements, including one that individuals buy health insurance.

Most legal scholars expect one of the suits to reach the U.S. Supreme Court. Individuals, advocacy groups, and hospitals have also sued.

Here are some details about the current state of the challenges being made:

RULINGS SO FAR

  • U.S. District Judge Henry Hudson Monday ruled that the federal government could not compel a person to buy health insurance in a lawsuit brought by Virginia, which had sued over the requirement. The government is expected to appeal. Hudson also said the penalty charged for not having health insurance is not a tax, shooting down the federal government’s argument that it is empowered to levy taxes. But the judge did not invalidate the entire law, saying he could not determine if the law would stand without the individual mandate.
  • The U.S. District Court for the District of New Jersey dismissed on Dec. 9 a lawsuit filed by a cardiologist, a patient, and a physicians’ advocacy organization that had alleged the law violates the Commerce Clause and also violated the fifth amendment.
  • On Nov. 30, a federal judge ruled the individual mandate and a requirement some employers buy coverage for employees was legal under the Commerce Clause in a lawsuit filed by Liberty University, a college founded by the conservative evangelical leader Jerry Falwell.
  • In October, another federal judge partly dismissed a suit filed in Michigan by the Thomas More Law Center, ruling Congress had the authority to enact the law under the Commerce Clause.
  • A California court has also dismissed a lawsuit, now under appeal at the Ninth Circuit Court, that said the healthcare law violates individual rights, increases taxes, and violates physician-patient privileges, along with violating the Commerce Clause.
  • In November, U.S. District Court Judge David Dowd partially denied and partially granted a motion to dismiss a lawsuit filed by U.S. Citizen’s Association in Ohio. While he dismissed arguments that the law violates freedom of association, due process and privacy protections, Dowd is still considering arguments that the law exceeds federal authority granted by the Commerce Clause.

PENDING CASES

  • Altogether, at least 24 lawsuits have been filed in federal courts by states and private parties.
  • Oral arguments on a motion for summary judgment will take place on Dec. 16 in a lawsuit filed by Florida and 20 states that says the U.S. Constitution’s Commerce Clause does not apply to economic inactivity, such as not buying health insurance, and that the law threatens state sovereignty.

WHAT IS AT ISSUE?

  • The states’ main concern is that the federal government is now allowed to force people to buy things because the law’s “individual mandate” requires that all Americans purchase health insurance or pay a penalty. The federal government counters that everyone will inevitably pay for healthcare, whether through insurance or during an emergency, and that without the individual mandate, premiums will rise.
  • If the courts decide the individual mandate is unconstitutional, the issue arises of whether the mandate can be cut away from the law, and leave the other requirements intact. The states say that without the individual mandate the entire law is rendered toothless.
  • Parts of the U.S. Constitution that have come into play are the Commerce Clause, which allows the federal government to regulate commerce among the states, the Supremacy Clause, which makes federal power supreme to states’ power, and the 10th amendment, which leaves to states all powers not explicitly granted to the federal government.
  • Some of the suits include those complaints and also focus on whether abortions are funded with taxpayer dollars under the law.
  • When Obama lobbied for the bill, he said there would not be a new tax associated with the individual mandate requiring coverage. The penalty for not having health insurance, though, is collected through tax filings and the federal government now argues the fine is indeed a tax it is empowered to levy. States say the U.S. government does not have the authority to charge the fine and point to the discrepancy between Obama’s statements and the U.S. government’s arguments.

Sources: Court documents, Pacific Legal Foundation.

(Reporting by Lisa Lambert and Jeremy Pelofsky in Washington; Editing by Andrew Hay and Sandra Maler)

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