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Newsletter

Health Freedom Watch
June 2010

Contents:

  • Motion to Dismiss Virginia Suit Against Health Insurance Mandate to Be Heard July 1
  • Congressional Research Service Examines Mandate’s Constitutionality
  • How Does Mandatory Health Insurance Differ from Other Government Programs?
  • ACLJ Files Federal Lawsuit Challenging Constitutionality of Federal Health Care Law
  • NRF Calculator Lets Employers Determine Potential Penalties Under New Health Care Reform Law


  • Motion to Dismiss Va. Suit Against Health Insurance Mandate to Be Heard July 1

    U.S. District Court Judge Henry E. Hudson will hear arguments July 1 on the federal government's motion to dismiss Virginia’s lawsuit challenging the constitutionality of Obamacare’s health insurance mandate. The Richmond Times-Dispatch reports: 

    • “[State attorney general Kenneth] Cuccinelli…argues that Congress overstepped its authority under the Commerce Clause to mandate that every American obtain health insurance or face a fine. The insurance mandate portion of the act takes effect in 2014.” 
    • “In its response…federal lawyers argued that Congress is allowed to impose the mandate under its authority to regulate interstate commerce. It also said Virginia cannot represent individuals who have yet to be affected by the mandate.” 
    • “Regardless of how Hudson rules on the motion, however, the losing side is expected to appeal the decision to the U.S. Court of Appeals. Both sides expect the case will end up before the U.S. Supreme Court.” 

    According to Ken Klukowski, a senior legal analyst with the American Civil Rights Union and frequent Fox News contributor: 

    • “[T]he Virginia suit is raising the ‘severability’ issue. It’s not an exaggeration to say that the future of American health care may well turn on severability. Almost all legislation has a severability clause. That’s routine language—almost boilerplate—that says if any one part of this law is found unconstitutional, or otherwise invalid or unenforceable, then the remainder of the law will continue in full force and effect.” 
    • “Obamacare has no severability clause. That means is that if any one part of Obamacare is found unconstitutional, then the entire law might be thrown out in court by a single decision. It doesn’t mean that it would definitely happen, but it might. This lack of severability could be the silver bullet that destroys the entire Obamacare system. Otherwise, striking down any one part of it could just open the door to a dozen more lawsuits, some of which the Obama administration would win. And various parts of the law may get entrenched support over time, making them hard to modify or replace.” 
    • “We’re in something of uncharted waters with the Virginia case…Unlike the big multistate case, where several co-plaintiffs are private individuals lacking insurance who would be subject to the mandate, the Virginia suit only names one plaintiff, Virginia, and one defendant, HHS Secretary Kathleen Sebelius.” 
    • “So the heart of the administration’s argument for dismissal is that Virginia lacks standing to bring the suit. Article III of the Constitution requires that a plaintiff have standing to sue in federal court. To have standing, a plaintiff must allege a concrete, personal injury that is different from the public at large, that a court can redress if it grants the relief that the plaintiff is seeking. Here, Virginia’s legislature passed a law empowering and charging the attorney general to bring suit on behalf of all the citizens of Virginia that would be under the hammer of the individual mandate. Cuccinelli filed suit in accordance with that law.” 
    • “There is no Supreme Court precedent that clearly states whether such facts can create standing. The motion to dismiss makes the argument against it, and now Cuccinelli will argue why Virginia does have standing.” 

    An update on the Virginia lawsuit (May 24 press release) is posted at the Virginia AG’s website: http://www.oag.state.va.us/PRESS_RELEASES/Cuccinelli/52410_HealthCare_Response.html 

    Sources:

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    Congressional Research Service Examines Mandate’s Constitutionality

    The Congressional Research Service released a 26-page report May 7 titled “Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis.” The summary points out that “Although the federal government provides health coverage for many individuals through federal programs such as Medicare, it had never before required individuals to purchase health insurance.”  The report examines “how a court could analyze this [mandate] provision in light of a constitutional challenge based on various provisions of the Fifth and Tenth Amendments. Finally, this report discusses whether the exceptions to the individual responsibility requirement to purchase health insurance satisfy First Amendment freedom of religion protections.” 

    CRS reports are a key source of authoritative information for members of Congress and their staff.  Thus legal scholars monitoring the constitutionality issue may want to review the report and consider taking actions to correct misconceptions, if necessary.  Such actions could include writing members of Congress and/or sponsoring briefings on the Hill to educate staffers about constitutionality concerns. The report is posted here:  http://www.ncsl.org/documents/health/Constitutionality.pdf 

    Source:  “Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis,” by Jennifer Staman, Cynthia Brougher, Edward C. Liu, Erika K. Lunder, and Kenneth R. Thomas, Congressional Research Service, May 7, 2010:  http://www.ncsl.org/documents/health/Constitutionality.pdf

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    How Does Mandatory Health Insurance Differ from Other Government Programs?

    The health insurance mandate has been compared to existing government programs, such as Medicare or tax-deductions for interest on home mortgages.  However, there is a great difference between being eligible for government benefits and/or tax breaks and being forced to buy a federally defined private insurance product or face a financial penalty. 

    The following table delineates the differences between some major government programs and the new health insurance mandate.

    Existing Government Program

    Health Insurance Mandate

    Social Security:  Citizens must pay taxes and thus are entitled to benefits, but do NOT have to accept cash benefits.

    Most citizens must buy a particular private insurance product or pay a penalty.

    Medicare Part A:  Citizens pay taxes and can forgo enrolling in Medicare Part A by forgoing Social Security benefits.

    Most citizens must buy a particular private insurance product or pay a penalty.

    Medicare Part B:  Citizens pay taxes but do NOT have to enroll.  They are entitled to join the program.

    Most citizens must buy a particular private insurance product or pay a penalty.

    Medicaid:  Citizens meeting certain income requirements are entitled to taxpayer-financed health coverage.

    Most citizens must buy a particular private insurance product or pay a penalty.

    Federal Employee Health Benefits Program (FEHBP):  Federal employees are given the option to have taxpayer-subsidized private health insurance in which workers contribute toward costs, but they are not penalized for declining the benefit.

    Most citizens must buy a particular private insurance product or pay a penalty.

    Tax deduction for home mortgage interest: Citizens may claim a tax deduction for mortgage interest paid on buying the home of their choice.  They are not penalized for rejecting the tax break.

    Most citizens must buy a particular private insurance product or pay a penalty.

    Automobile insurance:  Most states require drivers to carry at least liability coverage to pay for damage to other drivers.

    Most citizens must buy a comprehensive (although it’s labeled “essential minimum” coverage) private insurance product or pay a penalty.

    Public education:  Citizens must pay taxes to support public education, but they maintain the freedom to forgo public education and homeschool or obtain education at religious or other educational institutions (such as Montessori schools).

    Most citizens must buy a federally defined insurance product or pay a penalty.

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    ACLJ Files Federal Lawsuit Challenging Constitutionality of Federal Health Care Law

    The following is a press release from the American Center for Law and Justice:

    (Washington/June 9, 2010)—The American Center for Law and Justice (ACLJ), focusing on constitutional law, announced today [June 9] it has filed a federal lawsuit challenging the constitutionality of the recently-enacted federal health care law. The ACLJ, which represents five taxpayers, asserts that the mandate forcing Americans to purchase health insurance violates the U.S. Constitution and the religious rights of several of the plaintiffs.

    "This is an unprecedented assault on the constitutional freedoms of Americans," said Jay Sekulow, Chief Counsel of the ACLJ. "The Constitution specifically grants the federal government, including Congress, limited powers. It's clear that this individual insurance mandate goes well beyond those enumerated powers and represents the ultimate power play—Congress and the federal government acting as if they possess a police power to pass and enforce any law that they deem advisable. We're confident the court will conclude that this flawed provision is not only unconstitutional but unenforceable as well."

    The ACLJ filed a federal complaint today in U.S. District Court in the District of Columbia on behalf of five U.S. residents and federal taxpayers: Susan Seven-Sky from New York, Peggy Lee Mead of North Carolina, and three Texas residents—Charles "Eddie" Lee, Kenneth Ruffo, and Gina Rodriguez.

    The complaint argues that the Patient Protection and Affordable Care Act's individual mandate, along with the imposition of shared responsibility payments for failing to buy and maintain qualifying health insurance, "exceeds the power of Congress" and is "unconstitutional and cannot be enforced."

    "Mandating that individuals purchase health insurance is an unprecedented and unconstitutional expansion of congressional power, as Congress has never before required individuals to involuntarily buy a good or service under the guise of its Commerce Clause authority," the complaint asserts.

    The suit also argues: "If Congress succeeds in asserting this unprecedented claim of authority, it would set a sweepingly broad standard unsupported by the Constitution that would allow Congress to dictate to individuals that they must, or must not, buy countless other goods or services in the marketplace. To interpret the Commerce Clause to afford Congress such vast, all-encompassing authority over the daily lives of Americans would eviscerate the idea of a federal government of limited powers."

    Further, the lawsuit contends that the health care law violates the rights of three of the plaintiffs—Seven-Sky, Mead, and Lee—under the Religious Freedom Restoration Act of 1993 (RFRA). The suit argues that the requirement to purchase health insurance, under the threat of significant financial penalties, "substantially burdens the exercise of their religion." As the suit explains: "They are forced to either join a health insurance system that contradicts the tenets of their faith or pay substantial penalties for following the tenets of their faith."

    You can read the complaint here: http://www.aclj.org/media/pdf/HC-DCT-Complaint_20100609.pdf

    The ACLJ lawsuit names as defendants: U.S. Attorney General Eric Holder, the U.S. Department of Health and Human Services, along with HHS Secretary Kathleen Sebelius as well as the U.S. Department of the Treasury and its Secretary, Timothy Geithner.

    The suit requests that the court declare the individual mandate provision unconstitutional, declare that the defendants violated the rights of three of the plaintiffs under the Religious Freedom Restoration Act, and issue a permanent injunction against the enforcement of the individual mandate provision.

    In addition to this suit, the ACLJ filed an amicus brief earlier this week—in support of Virginia's legal challenge of the health care law—representing 28 members of Congress and more than 70,000 Americans opposed to the individual mandate provision of the health care law. You can read that brief here: http://www.aclj.org/media/PDF/Virginia_Amicus_Brief_20100607.pdf

    The ACLJ is also planning to file an amicus brief in support of Florida's legal challenge of the health care law.

    Source: “ACLJ Files Federal Lawsuit Challenging Constitutionality of Federal Health Care Law,” American Center for Law and Justice, June 9, 2010: www.aclj.org

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    NRF Calculator Lets Employers Determine Potential Penalties Under New Health Care Reform Law

    The following is a press release from the National Retail Federation:

    (Washington/May 25, 2010)–The National Retail Federation has created a new online tool to help retailers and other businesses determine what penalties they might face under the recently enacted federal health care reform law.

    “The mandate penalties are both complicated and abstract,” NRF Vice President and Employee Benefits Policy Counsel Neil Trautwein said. “NRF has come up with a way to make these calculations a little easier for both the retail community and employers at large. This will allow businesses to gauge their potential penalty exposure as they plan for the future.”

    The Patient Protection and Affordable Care Act requires that companies with 50 or more full-time employees either provide health benefits to all full-time workers or pay a $2,000 annual penalty for each one not covered beginning in 2014.

    NRF’s Health Care Mandate Cost Calculator allows retailers to determine the amount of those penalties by typing in their number of full-time employees, and part-time employee hours if an employer has fewer than 50 full-time workers. It also offers guidance on penalties for those who offer insurance that isn’t considered “affordable” under the new law’s guidelines. While the formula for the penalties appears simple on the surface, the calculator takes into account exceptions, limits and other factors that affect the total.

    The calculator is available on the NRF health care reform page at www.nrf.com/healthcare or by clicking here: http://www.nrf.com/modules.php?name=Pages&sp_id=1290

    As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion.

    Source: “NRF Calculator Lets Employers Determine Potential Penalties Under New Health Care Reform Law,” Press release from the National Retail Federation, May 25, 2010: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=934

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    Health Freedom Watch is published by the Institute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2010 Institute for Health Freedom.