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Attorneys General and NFIB File Response in Health Care Lawsuit

By Jane Norman, CQ HealthBeat Associate Editor

August 6, 2010 -- Calling the new health care law "an unprecedented intrusion on the sovereignty of the states and the freedom of their citizens," attorneys general from 20 states and the National Federation of Independent Business (NFIB) made another move Friday in their lawsuit against the overhaul.

The officials filed a response to a Justice Department motion to dismiss the states' lawsuit. Oral arguments in the suit are set for Sept. 14 in Pensacola, in federal district court in the Northern District of Florida. Florida Attorney General Bill McCollum is leading the drive among attorneys general to kill the law's requirement that Americans should be required to obtain health insurance.

"We think we will win on this," McCollum, a Republican candidate for governor, told Fox News on Thursday, predicting the suit eventually will end up at the U.S. Supreme Court and garner a 5-4 decision in the states' favor.

The U.S. government asked in June that the suit be dismissed, saying that "consistent Supreme Court precedent" shows the law is proper. The Justice Department also said that states don't have the legal standing to make a claim and that even if they did, precedent establishes that regulation of economic decisions such as how to pay for medical services is allowed under the Commerce Clause of the Constitution.

"Having failed in the legislative arena, opponents of reform are now turning to the courts in an attempt to overturn the work of the democratically elected branches of government," Stephanie Cutter, assistant to President Obama for special projects, wrote in a blog post earlier this week. She predicted the Obama administration will prevail.

The latest legal move came the same week that 71 percent of Missouri voters in a primary election voted Tuesday in favor of a proposal that would kill the requirement to obtain health insurance in the law (PL 111-148, PL 111-152). It's unclear what the legal impact of that vote will be.
In addition, a federal judge in a separate lawsuit Monday refused to dismiss a challenge to the law by Virginia Attorney General Kenneth T. Cuccinelli. That decision was not on the merits of the law or whether it is constitutional; instead, it said that the Virginia attorney general had the standing to continue.

The states and the NFIB said in their filing on Friday that they are "profoundly affected" by the law and its requirement that all Americans obtain health insurance, as well as requirements to expand Medicaid coverage to people earning above the poverty level, so they have standing to file. "Congress' commerce power extends to regulation of activities having a substantial relation to interstate commerce, but does not allow it to compel inactive individuals to enter a marketplace against their will," they added.

Besides Florida, other states involved in the lawsuit are Alabama, Alaska, Arizona, Colorado, Georgia, Indiana, Idaho, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington. Two individuals also are named, Mary Brown and Kaj Ahlburg.

Meanwhile, advocates of the law are pondering what impact it would have if the individual mandate is eliminated, either by referendum, in the courts or in Congress.

Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology and widely quoted congressional witness in favor of the overhaul, wrote in a Center for American Progress paper on Thursday that the mandate is one piece of a "three-legged stool" needed to make the system function. The other two elements are the new rules that prevent insurance companies from denying coverage or raising premiums based on preexisting conditions, and the subsidies to make insurance affordable, Gruber said.

He said that repeal of the mandate would mean more people would wait until they get sick to buy insurance in the new exchanges, increasing the average premium cost by 27 percent in 2019. Fewer than 7 million people would be covered by 2019 rather than the 32 million now projected, but federal spending would decline by only a quarter because the sickest and most costly uninsured people would be the ones most likely to gain coverage, Gruber said. "Critics who propose to 'repeal and replace' the Affordable Care Act don't seem to understand that all three legs of the stool are critical for reform," he wrote.

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