Federal judge strikes down key part of health care law

A federal judge ruled Monday that a key provision of the Obama administration's overhaul of the health care system is unconstitutional.

Judge Henry E. Hudson ruled that the requirement that Americans purchase health insurance "exceeds the constitutional boundaries of congressional power" granted by the Commerce Clause.

Hudson did not freeze the law, pending appeals. He did not throw out the entire law, but ruled on the sections requiring coverage to be purchased.

The ruling has little immediate impact, as the mandate does not take effect until 2014.

Hudson has ties to a GOP consulting firm that has worked against health care reform.

The judge owns shares worth between $15,000 and $50,000 of Campaign Solutions, Inc., financial disclosure documents show.

Since 2003, Hudson has earned between $32,000 and $108,000 in dividends from his stake in the firm.

The company has worked for John Boehner, Michele Bachmann and Sen. John McCain, along with helping to set up Sarah Palin's political action committee.

Ken Cuccinelli, the Virginia attorney general who filed the suit against health care reform that Hudson ruled on Monday, paid Campaign Solutions $9,000 for services in 2010.

The company said Monday that Hudson "is a passive investor only, has no knowledge of the day to day operations of the firm, and has never discussed any aspect of the business with any official of the company."

The law has been upheld by two other federal judges, in cases filed in Michigan and Virginia. A suit filed by 20 states, including Arizona, is pending in Florida.

Gov. Jan Brewer said she is "pleased and encouraged" by Monday's ruling.

The case is expected to ultimately be decided by the Supreme Court.

Links from Kaiser Health News

The New York Times: "A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and insuring that appellate courts will receive contradictory opinions from below." Judge Henry Hudson 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" (Sack, 12/13).

The National Journal: "The decision ... found that the insurance coverage mandate in the law 'exceeds the constitutional boundaries of congressional power,' but chose to sever the relevant sections of the law, instead of invalidating the entire statute" (McCarthy, 12/13).

The Associated Press: With this decision, Judge Hudson is "the first federal judge to strike down the law, which has been upheld by two others in Virginia and Michigan. Several other lawsuits have been dismissed and others are pending, including one filed by 20 other states in Florida. ... Administration officials told reporters last week that a negative ruling would have virtually no impact on the law's implementation, noting that its two major provisions - the coverage mandate and the creation of new insurance markets - don't take effect until 2014" (12/13).

Los Angeles Times: "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 will be able to get health benefits even if they are sick" (Levey, 12/13).

The Wall Street Journal: "The ruling by Judge Hudson is perhaps the most significant so far among a slate of state-based legal challenges to the law, which faces a broad attack by newly resurgent Republicans in Congress. ... While differing somewhat, the challenges largely rest on a core argument that Congress lacks constitutional authority to require most Americans to carry health insurance or pay a fee." But this mandate does not take effect until 2014. "Health-care consultants say employers and health-care companies are pressing ahead with their response to the law without regard for the court's decisions." In addition, states are proceeding with plans to create the law's health insurance exchanges and Medicaid expansions (Adamy, 12/13).  

The Washington Post: According to the 42-page opinion: "'Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,' he wrote. 'In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution]" (Helderman, 12/113).

CNN: "Virginia officials had argued that the Constitution's Commerce Clause does not give the government the authority to force Americans to purchase a commercial product -- like health insurance -- that they may not want or need. They equated such a requirement to a burdensome regulation of "inactivity" (Mears, 12/13).

Richmond Times-Dispatch: Virginia "Attorney General Ken Cuccinelli's office had argued that the individual mandate provision of the Patient Protection and Affordable Care Act violates the Commerce Clause of the U.S. Constitution. 'I am gratified we prevailed,' Cuccinelli said. 'This won't be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution'" (Nolan, 12/13).

The Virginian-Pilot: "Strengthening the Virginia lawsuit, Cuccinelli contends, is General Assembly approval earlier this year of a state law that exempts citizens from the mandate" (Walker, 12/13).

Politico: "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 addition, "[h]ealth reform supporters were quick to stress that the vast majority of health reform cases have come out in their favor, with judges either ruling the law to be constitutional or tossing out the suits altogether (Kliff and Lee, 12/13).