NYT: Court in FL Lawsuit Declares Health Reform Law Unconstitutional

January 31, 2011

Federal Judge Rules Health Law Violates Constitution

By KEVIN SACK

A second federal judge ruled on Monday that it had been unconstitutional for Congress to enact a health care law that requires Americans to obtain commercial insurance, evening the score at two-to-two in the lower courts as conflicting opinions begin their path to the Supreme Court.

Like a Virginia judge in December, Judge Roger Vinson of Federal District Court in Pensacola, Fla., said he would allow the law to remain in effect while the Obama administration appeals his ruling, a process that could take two years. But unlike his Virginia counterpart, Judge Vinson ruled that the entire health care act should fall if the appellate courts join him in invalidating the insurance requirement.

“The Act, like a defectively designed watch, needs to be redesigned and reconstructed by the watchmaker,” Judge Vinson wrote.

In a 78-page opinion, Judge Vinson held that the insurance requirement exceeds the regulatory powers granted to Congress under the Commerce Clause of the Constitution. Judge Vinson wrote that the provision could not be rescued by an associated clause in Article I that gives Congress broad authority to make laws “necessary and proper” to carrying out its designated responsibilities.

“If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain,” Judge Vinson wrote.

In a silver lining for the Obama administration, the judge rejected a second claim that the new law violates state sovereignty by requiring states to pay for a fractional share of a Medicaid expansion that is scheduled for 2014.

Judge Vinson, the first judge to address that question, dismissed the contention that states were being illegally commandeered by the federal government. He said they always have the option, however impractical, to withdraw from Medicaid, a joint state and federal insurance program for those with low-incomes.

The judge’s ruling came in the most prominent of more than 20 legal challenges to some aspect of the sweeping health law, which was enacted last year by a Democratic Congress and signed by President Obama in March.

The plaintiffs include governors and attorneys general from 26 states, all but one Republican, as well as the National Federation of Independent Business, which represents small companies. Officials from six states joined the lawsuit this month after shifts in party control brought by last November’s elections.

The ruling by Judge Vinson, a senior judge who was appointed by President Ronald Reagan, solidified the divide in the health litigation among judges named by Republicans and those named by Democrats.

Last month, Judge Henry E. Hudson of Federal District Court in Richmond, Va., who was appointed by President George W. Bush, became the first to invalidate the insurance mandate. Two other federal judges named by President Bill Clinton, a Democrat, have upheld the law.

The Florida plaintiffs ensured they would draw a Republican-appointed judge by filing the lawsuit in Pensacola.

Like Judge Hudson before him, Judge Vinson declined to enjoin the law and ruled that it could remain in place pending appeals. The insurance requirement, known as the individual mandate, does not take effect until 2014.

Judge Vinson had telegraphed his leanings last year in a preliminary ruling and in comments from the bench during a pair of hearings. His opinion hangs on a series of Supreme Court decisions that have defined the limits of the Commerce Clause by granting Congress the authority to regulate ”activities that substantially affect interstate commerce.”

The plaintiffs in the Florida case characterized the insurance requirement as an unprecedented attempt to regulate inactivity because citizens would be assessed an income tax penalty for failing to purchase a product. Their lawyers argued there effectively would be no limits on federal authority, and raised the specter of government-mandated gym memberships and broccoli consumption.

Justice Department lawyers, representing the Obama administration, asserted that a choice to not obtain health insurance is itself an active decision. Taken in the aggregate, they said, those decisions place a heavy economic burden on hospitals, governments and privately insured ratepayers that absorb the cost of uncompensated care for those without coverage.

In his decision, Judge Vinson wrote: “It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause.” If Congress has such power, he continued, “it is not hyperbolizing to suggest that Congress could do almost anything it wanted.”

The Pensacola case now likely heads to the Court of Appeals for the 11th Circuit in Atlanta, considered one of the country’s most conservative appellate benches. The Richmond case is already with another conservative court, the Court of Appeals for the 4th Circuit in Richmond, which has set oral arguments for May.

That court will consider diametrically opposed rulings from courthouses situated 116 miles apart, as it was a judge in Lynchburg, Va., Norman K. Moon, who issued one of the two decisions upholding the law. Meanwhile, the Court of Appeals for the Sixth Circuit in Cincinnati is already receiving briefs on the other decision backing the law, which was delivered by Judge George C. Steeh in Detroit.

Although Judge Vinson’s ruling will have no instant effect on implementation, it further arms Republicans in Congress who are waging a fierce campaign against the health care act. The new Republican majority in the House voted early this year to repeal the law, a largely symbolic measure that is given no chance in the Democratic-controlled Senate.

The Obama administration argues that the insurance mandate is essential to its goals of covering more than 30 million uninsured and offering protections to those with pre-existing health conditions. Unless everyone is required to have insurance, the administration contends, consumers might simply wait until they are sick to enroll, undercutting the actuarial soundness of risk pooling and leading to an industry “death spiral.”

But the mandate’s legal and political problems have prompted a few Democratic senators to join Republicans in exploring alternatives that would encourage citizens to buy insurance without requiring it.

For instance, people could be given a narrow window to enroll, and those who miss the deadline would face lengthy waiting periods for coverage. Alternately, those who apply late and are eligible for government tax credits under the law coverage could be penalized through a reduction of their subsidies.

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Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

kwrege

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Updated Gray Administration Cabinet Line-Up & Contact Information

See the attached list of Gray administration cabinet officials and their contact information. Interim titles typically signify Fenty administration officials who have yet to be nominated to permanent posts.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

DC Cabinet Heads Contact Information 1.27.11.docx

Business Journal: MD to Move Forward on Health Care Reform Implementation Legislation

Brown to push health reform bills in Annapolis

Baltimore Business Journal – by Emily Mullin , Staff

Date: Thursday, January 27, 2011, 4:54pm EST

Related:

Nicholas Griner | Staff

Lt. Gov. Anthony Brown plans to push health care reform bills in this year’s General Assembly.

Lt. Gov. Anthony Brown said Thursday he plans to head up efforts to pass a package of bills that will help the state implement health care reform.As part of his legislative agenda during this General Assembly session, Brown hopes to pass the following legislation:

• Maryland Health Benefit Exchange Act of 2011 (House Bill 166/Senate Bill 182): This would establish the framework for a new health insurance marketplace, or exchange, as outlined in the federal health care reform law. The exchange will provide individuals and small businesses options for affordable insurance options and help an estimated 180,000 low-income Marylanders access federal subsidies for coverage.

• Health insurance reform (House Bill 170/Senate Bill 183): This bill aligns Maryland law with the consumer protections in the Patient Protection and Affordable Care Act. It would ban insurance companies from denying individuals coverage based on pre-existing conditions and lifetime limits on benefits. It would also require insurance companies to cover certain preventive services like mammograms and flu shots, and would allow young adults to stay on their parents’ policies until age 26.

• Health Quality and Cost Council (House Bill 165/Senate Bill 175): This legislation would establish the council in law and expand the state’s effort to bring public agencies and the private sector together to improve the quality and reduce the cost of health care in Maryland.

DC Fiscal Policy Institute Weighs in to Support Combined Reporting Tax

Mayor Gray and DC Council: Implement Combined Reporting Now or DC Taxpayers Will Pay For It Later

January 27th, 2011 | by Ed Lazere

DC’s budget situation is not pretty, and it has potential to get even uglier. Just last week, Mayor Gray’s budget office hinted that the gap between revenues and expenses for next year could be $600 million, when we thought it was only $400 million. Considering that Mayor Gray will have no federal stimulus funds left next year, and that he pledged not to dip into the city’s reserves, the challenges are immense.

That is why it seems utterly crazy that that Gray and the DC Council could be making the gap even bigger— by failing to follow through on an important corporate tax reform the Council adopted in 2009. If they don’t take action soon, the city could lose $22 million in needed tax revenue by allowing big multi-state corporations to continue to avoid paying taxes to the District.

Right now, corporations like CVS and Starbucks are taking advantage of weaknesses in our tax system by shifting profits they make in DC to other states that have lower — or no — businesses taxes. The result? They avoid paying their fair share of DC taxes while local businesses and residents pick up the slack in tax revenue.

This is bad tax policy, and the DC Council seemed to agree 18 months ago, when it passed an important tax reform known as “combined reporting” to prevent this abuse of corporate tax shelters.

The problem is that the Mayor and Council haven’t spelled out the rules and details so that corporations can actually start abiding by combined reporting this year as planned. If they do not act, the $600 million budget hole will grow by $22 million, because the new tax collections from combined reporting already are built into next year’s revenue forecast. It’s worth noting that a majority of states with a corporate income tax use combined reporting, and DC’s Chief Financial Officer Natwar Gandhi endorses it. In fact, Gandhi has made it easy for the Council to take action because his office has drafted the legislation needed to implement this important reform.

There really is no excuse for inaction. Either Mayor Gray, Council Chair Kwame Brown, or Finance Committee Jack Evans should get moving on this right away.

DCFPI reported on combined reporting late last year, we put together a spiffy video, and we wrote about it in our column that appears in the Hill Rag. We will keep following and writing about combined reporting until this important tax protection tool is fully in place.

This report was posted on January 27th, 2011 by Ed Lazere and is filed under Blog: The District’s Dime.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Mayor Gray Modifies Contracting Procedures

Mayor Gray has informed all agency directors to obtain approval from the Council on contracts worth more than $1 million "regardless of whether the contract was originally awarded before or after October 15, 2009." The mayor delivered the message in person and is sending a memo via email to key agency staff. See the attached press release.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Gray Contract Approval Notice 1.27.11.pdf

Guardian Withdraws From Health Insurance Market

Guardian Life Insurance Company of America is pulling out of the health insurance market, transferring about 50,000 policies over to UnitedHealth. "As a smaller, niche medical carrier, Guardian is not able to effectively compete with larger, national carriers," Guardian wrote. "Our medical enrollment has steadily declined over the years, leaving us with less than 0.1 percent total medical market share." The decision was not a reaction to the health reform law, Guardian spokesman Richard Jones says in an interview. "This is not a new action," he says. "It’s been taking place over the course of several years," noting that the insurer has systematically scaled back its medical insurance offerings from about 200,000 enrollees in 2003, down to half that in 2007, and half again today. Policies will be phased out over the coming two years. The carrier’s notice is attached.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Guardian Withdrawal.pdf

VA Lawsuit Appeal to be Heard in May

Published on Washington Examiner (http://washingtonexaminer.com)

Home > Court to hear Va. health care case in May

DC Budget Hearing Schedule

The referenced budget hearings are likely to be especially urgent this year, given anticipated agency budget cuts.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

kwrege

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

fy12_budget_hearing_notice_24(1).xlsx

AP Fact Checks Health Care Claims in the SOTU Speech

Fact-checking the State of the Union

Last Modified: Jan 26, 2011 06:58AM

WASHINGTON — A look at some of President Obama’s statements Tuesday night and how they compare with the facts:

OBAMA: Tackling the deficit “means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit.”

THE FACTS: The idea that Obama’s health care law saves money for the government is based on some arguable assumptions.

To be sure, the nonpartisan Congressional Budget Office has estimated the law will slightly reduce red ink over 10 years. But the office’s analysis assumes that steep cuts in Medicare spending, as called for in the law, will actually take place. Others in the government have concluded it is unrealistic to expect such savings from Medicare.

OBAMA: “I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.”

THE FACTS: Republicans may be forgiven if this offer makes them feel like Charlie Brown running up to kick the football, only to have it pulled away, again.

Obama has expressed openness before to this prominent Republican proposal, but it has not come to much. It was one of several GOP ideas that were dropped or diminished in the health care law after Obama endorsed them in a televised bipartisan meeting at the height of the debate.

OBAMA: Praised the “important progress” made by the bipartisan fiscal commission he created last year.

THE FACTS: The panel’s co-chairmen last month recommended a painful mix of spending cuts and tax increases, each of them unpopular with one constituency or another, including raising the Social Security retirement age, cutting future benefit increases, raising the gasoline tax and rolling back popular tax breaks like the mortgage interest deduction. But Obama has yet to sign on to any of the ideas, even though he promised when creating the panel that it would not be “one of those Washington gimmicks.”

AP

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

US House Energy & Commerce Committee Investigation on Experience of Federal Pre-Exsiting Condition Health Plans

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Fed’l HRP Investigation Letter 1.26.11.pdf

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