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Feds Ask That Virginia Suit Challenging Health Care Law Be Dismissed

By Jane Norman, CQ HealthBeat Associate Editor

May 25, 2010 -- The Justice Department has filed a brief arguing that a lawsuit by the commonwealth of Virginia challenging the new health care law would overturn "decades of settled precedent" and should be dismissed.

The federal government said in its brief, filed on Monday, that Virginia does not have any standing to sue over the individual mandate, similar to an argument that Justice made in response to a separate suit filed in Michigan also challenging the constitutionality of the new law.

But the standing is not the only issue, the department's lawyers argued. "Even if Virginia could surmount this jurisdictional barrier, its claim still would fail because Congress, in adopting the minimum coverage provision, acted well within its authority under the Commerce Clause," says the federal government brief filed in U.S. District Court for the Eastern District of Virginia.

"Congress understood that virtually everyone at some point will need medical services, which cost money. The [Affordable Care Act] merely regulates economic decisions on how to pay for those services — whether to pay in advance through insurance or attempt to do so later out of pocket — decisions that substantially affect the vast, interstate health care market."

Virginia Attorney General Kenneth T. Cuccinelli II filed suit on March 23, hours after the health care law was enacted, against Health and Human Services Secretary Kathleen Sebelius, acting in her official capacity. Cuccinelli asks for the law to be declared unconstitutional because of its requirement that every American have health insurance.

But the Justice Department says that mandate is a linchpin of the new law. As premiums increase and healthy people decide to not purchase health insurance, that self-selection narrows the risk pool and makes premiums increase anew, creating a "premium spiral," says the brief. Those people also use emergency room services and shift costs onto providers, public programs and people with insurance, says the brief.

"In the aggregate, these economic decisions regarding how to pay for health care services — including, in particular, decisions to forgo coverage and to pay later or, if need be, to depend on free care — have a substantial effect on the interstate health care market," the brief says. "Congress may use its Commerce Clause authority to regulate these direct and aggregate effects."

The brief also says regulation of an interstate market that consumes more than 17.5 percent of the annual gross domestic product is well within congressional authority.

"Congress has repeatedly exercised its power over this field, both by providing directly for government-funded health insurance through the Medicare Act, and by adopting over a period of more than 35 years numerous statutes regulating the content of policies offered by private insurers," it adds.

But Cuccinelli said that if someone decides to not buy insurance, that person is not engaging in commerce, and "just being alive" does not constitute interstate commerce.

"If it were, there would be no limit to the Commerce Clause and to Congress's authority to regulate everything we do," he said in response to the Justice brief. "If Congress has the power to force Americans to buy health insurance, then there's nothing to stop Congress from forcing us to buy any product."

Virginia is in a unique position to argue the constitutionality of the individual mandate, officials there say.

The General Assembly in Virginia approved and the governor has signed into law a measure saying the federal government can't require Virginia residents to buy health insurance. Because of that state law and its conflict with federal law, Virginia has not joined a suit filed by 20 other states in federal court in Florida challenging the federal law.

"The Virginia law protects our citizens from being forced to buy health insurance against their will," said Cuccinelli.

Cuccinelli has until June 7 to respond to the motion to dismiss, and the government then will have until June 22 to respond.

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