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20 State Lawsuit Over Health Care Heard Before Escambia Judge

Combatants in the fight over national health care reform squared off Thursday in Pensacola federal court, the latest battleground over national health insurance requirements that will likely ultimately be decided by the U.S. Supreme Court.

Attorneys representing 20 states faced off with Department of Justice lawyers for the Obama administration over whether the new federal health insurance mandate oversteps constitutional limits on federal power.

Specifically, the states’ lawsuit claims the sweeping reform, pushed through by President Obama’s fellow Democrats in the Congress after months of bitter partisan wrangling, violates states’ rights in the U.S. Constitution and will force massive new spending on hard-pressed state governments.

“Congress can achieve many things in the public interest but it must always stand through and by its enumerated powers,” said plaintiffs’ attorney David Rivkin.”It certainly cannot exercise general police powers, however laudable the goal might be.”

The arguments come days after a federal judge in Virginia threw out a key component of the Affordable Care Act. In his ruling, U.S. District Judge Henry Hudson said Congress did not have the power to require individuals to carry health insurance or face a tax penalty.

U.S. District Judge Roger Vinson said he would rule on the Florida challenge quickly, but didn’t give a date.

Florida’s case includes a challenge to the individual mandate, but also charges that the expansion of Medicaid, which plaintiffs contend could add 18 million to the Medicaid roles – a 30 percent increase – is an unconstitutional expansion of the federal-state program that will cost states billions more to put in place.

State officials said their objection to the expansion of Medicaid the law appears to require was not just based on immediate cost concerns, but worries about the larger notion that the federal government could require different types of spending by states even when they don’t have money.

“In a grant program like Medicaid, there is only so far you can go,” said Florida Attorney General Bill McCollum, who spearheaded the lawsuit. “There is some point when it turns into compulsion.”

“The ACA transforms Medicaid fundamentally,” said Blaine Winship, special counsel for McCollum, added.

Though originally crafted as a voluntary program for the states, Winship told Vinson that the health care system for the poor has become so large that states, in practical terms, have no alternative but to comply. The federal program, which on average pays about 55 percent of Medicaid costs, now pumps $251 billion a year to the states, the largest single federal grant and aid program to states.

“The states have no real choice other than to accept this new Medicaid regime,” Winship said – because without it, they lose federal funding and would never be able to provide care on their own. “The defendants claim the states can withdraw but the argument is outside of logic. The ACA, by its very structure… cannot function if states withdraw from Medicaid.”

Attorneys for the federal government argued that Congress has been given the authority to regulate the parameters of the Medicaid program and who qualifies for coverage. Since its creation, the courts have not struck down expansions of the safety net program required by Washington.

“That authority has repeatedly been upheld,” said Ian Gershengorn, attorney for the U.S. Department of Justice.

The new healthcare law is a cornerstone of President Obama’s domestic agenda and aims to expand access to health insurance for millions more Americans while curbing costs. Obama officials have insisted it is constitutional and necessary to stem huge projected increases in health care costs that currently result, in part, from picking up the tab for the uninsured.

In regard to the individual mandate, plaintiffs’ attorney David Rivkin said requiring individuals to obtain medical coverage would be a “radical interpretation” of federal power by allowing individuals to be punished for not doing something.

“Commerce requires activity,” Rivkin said. “Individuals cannot be regulated under the Commerce Clause unless they at first voluntarily participate in some activity that Congress would otherwise (regulate.)” With the health care law, they don’t, but rather would be punished for not participating.

Gershengorn countered that the nation’s $2.5 trillion health care market is unique in that unlike other economic decisions, participants receive health care whether they pay for it or not.

“The decision to finance your health care services out of pocket or by insurance is not inactivity,” Gershengorn said. “The decision to run the risk of incurring health care costs without paying for them and… and relying on other people to pick up the tab is not inactivity.”

Throughout Gershengorn’s arguments, Vinson repeatedly returned to the issue of whether Congress can force individuals, in essence, to purchase a product or face penalties if they don’t. He also questioned whether Congress would be able to regulate other personal activities, a step that would open the doors for a wide range of legislation.

“It would be a giant leap,” Vinson said.

Following three hours of testimony, Vinson declined to lay out a timetable for deciding the case.

“I will make a decision as quickly as possible,” he said.

Plaintiffs in the lawsuit include the National Federation of Independent Business, which describes itself as the leading association representing small U.S. businesses in America.

Apart from Florida, states joining in the lawsuit include Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, South Dakota, Pennsylvania, Texas, Utah and Washington.

Plaintiffs said they were encouraged by Vinson’s repeated questions as to what would stop Congress from requiring other activities if the courts approve the health care plan.

“Finally, it appeared as if they said there were no limits (on what the federal government might require people to buy) and that’s concerning, especially for small businesses,” said Karen Harned, executive director of NFIB’s small business legal center.

By Michael Peltier
The News Service Florida

Pictured top: Outgoing Florida Attorney General Bill McCollum does a television interview Thursday outside the Federal Courthouse in Pensacola. Photo by Michael Peltier for NorthEscambia.com, click to enlarge.