Monday, December 13, 2010

Virginia U.S. District Judge Henry Hudson Severs And Strikes Down Mandate In Obamacare; Obamacare Headed For The U.S. Supreme Court

On December 13th, 2010, Virginia U.S. District Judge Henry Hudson struck down the individual mandate provision in Obamacare which requires most Americans to purchase health insurance by 2014 or else pay a penalty on their Federal tax returns. Because two other Federal judges, one in Virginia and one in Michigan, previously ruled in favor of Obamacare, the issue is headed for a U.S. Supreme Court showdown, although this is not expected until 2012 at the earliest. Incoming House Majority Leader Eric Cantor (R-VA) is calling for Barack Obama to request an expedited appeal to the Supreme Court. There is also a class-action suit originated by Florida but joined by Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North and South Dakota, Pennsylvania, South Carolina, Texas, Utah and Washington at stake.

-- Read the full 42-page ruling in Virginia v. Sebelius (3:10-cv-00188) HERE.

Judge Hudson ruled that an individual's personal decision to purchase or decline purchase of health insurance from a private provider is beyond the historical reach of the U.S. Constitution. He finds no specific constitutional authority exists to mandate the purchase of health insurance. But Judge Hudson said he will allow the law to remain in effect while appeals are heard, meaning there is unlikely to be any immediate impact on other provisions that have already taken effect. The 2014 implementation date of the mandate did not make an enjoinment necessary at this time.

After the ruling, Virginia Attorney General Kenneth Cuccinelli II expressed satisfaction. "This case is not about health insurance. It is not about health care. It's about liberty...We've won the first round of this particular fight, but we know there are others to come", said Cuccinelli. Cuccinelli was specifically challenging Section 1501 of the Patient Protection and Affordable Care Act (commonly nicknamed "Obamacare"), which is the Minimum Essential Coverage provision. Cuccinelli claimed that Section 1510 is beyond the outer limits of the Commerce Clause, an illegitimate exercise of the Congressional power of taxation under the General Welfare Clause, and a violation of the Virginia Health Care Freedom Act. In the latter case, Cuccinelli contends that Section 1510 is an unlawful exercise of police power, an encroachment upon the sovereignty of the Commonwealth of Virginia, and an offense against the Tenth Amendment to the U.S. Constitution.

Both Judge Hudson and Attorney General Cuccinelli are Republicans, a fact which some liberals might use as grist for their propaganda mills in discrediting opponents of Obamacare.

White House Press Secretary Robert Gibbs was not surprised by the ruling, and of course disagrees with it. He defended the mandate as being financially necessary to allow the government to finally address the lingering discrimination against individuals with pre-existing conditions. Both Gibbs and the Justice Department believe Obamacare will eventually be upheld.

Other Reaction: U.S. House Speaker-elect John Boehner (R-OH) said "The individual mandate at the heart of Obamacare puts the federal government in the business of forcing you to buy health insurance and taxing you if you don't. This is unwise, unaffordable, and as we have argued all along, unconstitutional." Senator Orrin Hatch (R-UT) characterized the decision as a great day for liberty, saying "If the government can tell you what to buy, then what limits on federal power exist? The $2.6 trillion health law is an astonishing expansion of that power and bursts the limits that the Constitution imposes on the federal government."

But the equally-conservative RedState thinks there are some potential problems with the opinion that may result in this opinion being a net loss down the road. First, RedState thinks that severing the mandate from the rest of the Act could ultimately result in the wholesale destruction of private health insurance companies in the United States. RedState also believes the judge's refusal to enjoin the implementation of Obamacare could also be problematic, although this is not coherently explained in the analysis.

How the Supreme Court would decide this is anybody's guess. What's likely is that it will be a close 5-4 decision.

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