Virginia, feds make cases in health care reform challenge

John O'Brien Sep. 7, 2010, 2:16pm


RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli is calling the federal government's defense of its decision to require citizens to purchase health insurance or face a financial penalty "strange and awkward."

Both Cuccinelli and the federal government filed their motions for summary judgment Friday in Virginia's challenge of federal health care reform that was passed in March. Cuccinelli claims a state law protects Virginians from a financial penalty imposed by the federal reform package.

Individuals must pay a $695 penalty annually if they do not purchase health insurance. The mandate begins in 2014.

"(Department of Health and Human Services Secretary Kathleen Sebelius) pleads that the status of being uninsured is 'an economic decision' that 'has a substantial effect on interstate commerce,' Cuccinelli's motion says.

"This strange and awkward formulation serves merely to emphasize the correctness of this Court's ruling that the Secretary's position is well outside of the currently established limits of the Commerce Clause. Although the Commonwealth's position is in accord with existing precedent, acceptance of the Secretary's position would require a change in the existing law."

Cuccinelli added that allowing the federal government to penalize individuals for not participating in a marketplace would create an unlimited power "indistinguishable from a national police power."

U.S. District Judge Henry Hudson ruled in August against the feds' motion to dismiss, advancing the case to the summary judgment phase.

DHHS argues that Congress determined the mandate is essential to the law's success.

"That judgment rested on a number of Congressional findings," DHHS wrote.

"Congress found that, by 'significantly reducing the number of the uninsured, the requirement, together with the other provisions of this Act, will lower health insurance premiums.'

"Conversely, and importantly, Congress also found that, without the minimum coverage provision, the reforms in the Act, such as the ban on denying coverage or charging more based on pre-existing conditions, would amplify existing incentives for individuals to 'wait to purchase health insurance until they needed care,' thereby further shifting costs onto third parties."

Each side has 20 days to respond to the other's motion. The replies and any amicus briefs are due to Hudson Oct. 4.

"While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate -- and tax -- a citizen's decision not to participate in interstate commerce," Hudson wrote in August.

"No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person's decision not to purchase a product, notwithstanding its effect on interstate commerce."

Cuccinelli filed his lawsuit soon after President Barack Obama signed the legislation into law in March. It is separate from a 21-state suit filed in Florida federal court that claims the mandate is unconstitutional and has no state law issues.

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