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Health Reform Law’s Legal, Political Obstacles Continue to Mount

December 20, 2010 at 5:56 PM EDT
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Jeffrey Brown discusses the political and legal challenges of mandating Americans to pay for health coverage with White House health reform director Nancy-Ann DeParle and Virginia Attorney General Ken Cuccinelli, who filed a lawsuit against the federal mandate, which was later ruled unconstitutional by a judge there.
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JEFFREY BROWN: Next: new legal challenges for the landmark health reform law, as this past week marked a major moment in the battle between the Obama administration and a number of states.

(CHEERING AND APPLAUSE)

One of the most important and controversial pieces of the health reform law signed by President Obama last March is the so-called individual insurance mandate, under which individuals must buy health insurance beginning in 2014, or pay a penalty.

The fines would be phased in, starting at $95 per person that first year and increasing to $695 in 2016. For a family, the maximum amount that could be charged in 2016 is $2,085. The penalty would rise over time with the cost of living.

MAN: So, how are you doing today? You feeling pretty good?

WOMAN: I’m so happy my last scans were clean.

JEFFREY BROWN: The health care law faced legal challenges from the outset. And, last week, Federal Judge Henry Hudson ruled in Virginia that the mandate was unconstitutional, saying it could not be levied as an economic activity under the Commerce Clause of the Constitution.

Hudson wrote, “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.”

In the meantime, 20 other states are challenging the law in federal court in Pensacola, Florida. At a hearing last week, Judge Roger Vinson signaled that he, too, thought the government might be overreaching. Separately, two other federal judges in Michigan and Virginia have already ruled that the mandate is constitutional in cases brought by private institutions.

All told, there are some 24 lawsuits pending on the health care question around the country.

And we hear from two key players now about the legal challenges to the health reform law.

First: the reaction from the Obama administration. Nancy-Ann DeParle is the director of the White House’s Office of Health Reform. I spoke with her earlier today.

Nancy-Ann DeParle, welcome. How big a blow was last week’s ruling? How do you assess it?

NANCY-ANN DEPARLE, director, White House Office of Health Reform: Well, as you pointed out, there are about two dozen of these lawsuits across the country.

Last week’s decision by Judge Hudson was one of three that have gone to the merits. And the other two ruled that the personal responsibility or individual responsibility requirement was in fact constitutional. This is one where the judge ruled it wasn’t constitutional. And these cases are just proceeding through the system. Fourteen of them have already been dismissed.

JEFFREY BROWN: What is the constitutional argument that you think will overcome objections? The Florida judge, for example, has not ruled, but he did compare allowing the government to force people to buy insurance to forcing people to eat broccoli.

NANCY-ANN DEPARLE: Well, he did.

And I think the lawyer representing the government pointed out that we’re not talking about broccoli here. We’re not talking about shoes. What we’re talking about is ensuring that every American can purchase affordable insurance.

And if we want to be able to do that and to prohibit insurance companies from banning people who have preexisting conditions, you know, who have been sick, and making sure that everyone can get insurance, then we have to get everyone in the system.

And so what we’re talking about is a requirement that, if you can afford to buy insurance, you need to maintain insurance. That’s all we’re talking about here.

JEFFREY BROWN: Now, how — how important is the mandate to the rest of the health reform law?

NANCY-ANN DEPARLE: Well, we have already been implementing, as you know, for about nine months now. And we have implemented a number of important provisions, such as a patients bill of rights, requirement that plans allow adult children to stay on their plans until they’re 26, banning rescissions, so that you can’t lose your insurance plan just because you have made an inadvertent mistake.

So, we have made lot of changes already. But the critical point that the individual responsibility requirement relates to is banning preexisting conditions. So, if we want to have a system based on the private sector and private plans, where people can get a plan even if they have had a disease or cancer or illness before, then we have to have a requirement that everybody get in the system if they can afford it. And that’s what this is all about.

JEFFREY BROWN: But what about the judge, the judge in Virginia we cited, who the argue — the argument is that this doesn’t fit under the commerce law of the Constitution. How do you overcome that part of it?

NANCY-ANN DEPARLE: Well, and, as you pointed out, two federal judges who are at the same level as Judge Hudson have said that in fact it is constitutional.

So, that’s the argument. The Congress has regulated many swathes of the economy under the Commerce Clause, which allows Congress to set rules for things that travel on interstate commerce or that affect interstate commerce.

And we believe that health insurance is one of those things. The health part of the economy is very interdependent, and, you know, trillions of dollars flowing, and, still, millions of Americans can’t get insurance, can’t afford it. And this is a part of just getting that — getting everyone into the system, so that it works.

JEFFREY BROWN: Are you concerned, though, that the loss in Virginia and, if it comes, in Florida, that — that it has a kind of psychological impact on any popular support for the law overall?

I mean, after all, the public has been divided on this. And especially on the mandate question, there’s been a fair amount of opposition. So, are you worried about the impact of political and public support?

NANCY-ANN DEPARLE: Well, I will tell you what. This law, since the president signed it last March, as I said, it’s been delivering benefits to the American people. It’s set new rules of the road for insurance companies.

It’s banned preexisting condition exclusions for kids already. So, there are many, many things in this law that are popular and that people know are benefits for them. And, despite that, hundreds of millions of dollars have been spent by those who oppose the law.

And that has politicized it. So, you know, that’s something that we’re mindful of, but I believe, as the American people begin to see the benefits of the law, that their support for it will grow.

JEFFREY BROWN: Are you, at this point, working on a plan B alternative if the mandate is struck down?

NANCY-ANN DEPARLE: No, we’re confident that the courts will recognize the constitutionality of the mandate. In fact, last week, we had 44 states and the District of Columbia here in Washington working with the Department of Health and Human Services on setting up the exchanges, the new marketplaces where Americans and small businesses will be able to purchase affordable insurance starting in 2014.

Remember that these things don’t start until 2014, so there’s plenty of time to get this all resolved.

JEFFREY BROWN: And you do have opponents of this who want to get to the Supreme Court as quickly as they can to kind of expedite the process. What do you think should happen?

NANCY-ANN DEPARLE: Well, this process is already moving really quickly. We already have district court rulings. The — we won in the Sixth Circuit in a case in Michigan. And that case has been appealed to the Sixth Circuit. This case, the Justice Department, Judge Hudson’s decision, they have said they will appeal that to the Fourth Circuit.

So, it’s moving through the federal courts. And all this will be resolved well before the new requirements begin to kick in, in 2014.

JEFFREY BROWN: And let me just ask you briefly, we’re looking — you look ahead to January. You have House Republicans coming in now, taking over then, who have talked about not so much getting rid of the whole law, but finding ways to slow it down, not fund it.

What are you looking at come January?

NANCY-ANN DEPARLE: Well, you know, we have worked effectively with — with many leaders of the House Republican Caucus in the past. And I’m looking forward to trying to do that as we go forward, because I really think, when you talk about things like closing the doughnut hole for seniors, providing new — January 1, new preventive benefits go into effect for all seniors in Medicare.

I don’t think they’re really going to want to roll those benefits back. I don’t think they are going to want to go back to a world where insurance companies can deny people, you know, their coverage because they made an inadvertent mistake on their application.

So, I’m looking forward to working with them and really making sure that we deliver the benefits of this law to the American people.

JEFFREY BROWN: All right, Nancy-Ann DeParle from the White House, thank you very much.

NANCY-ANN DEPARLE: Thank you.

JEFFREY BROWN: A short time later, I talked with Ken Cuccinelli, the Republican attorney general of Virginia. He filed the lawsuit against the mandate there, in which the judge ruled it unconstitutional.

Ken Cuccinelli, welcome to you. Now, we — we heard Nancy-Ann DeParle say that last week’s ruling wasn’t such a big blow, in her view.

KENNETH CUCCINELLI (R), Virginia attorney general: Right.

JEFFREY BROWN: How do you assess it?

KENNETH CUCCINELLI: Well, obviously, the first win against the federal government is always the biggest, because it can be the break in the dam.

And I’m cautiously optimistic that the Florida case with the other 20 states is going to end very much like Virginia’s did, with the finding that the individual mandate is unconstitutional, that Congress doesn’t have the power to order us to buy health insurance or any other product, which is their big hurdle there that I think they’re going to struggle to get over with the Supreme Court.

Of course, you heard Mrs. DeParle say how confident they were that they would win at the Supreme Court, but they’re not so confident that we want to get there any time soon.

JEFFREY BROWN: Well, what is the — explain the constitutional argument from your end. You heard her say that health care is different in a way. Health care is part of commerce. And the argument from that end, she feels, can overcome what the Virginia judge said. And, as she pointed out, several judges have sided with her.

KENNETH CUCCINELLI: Yes, the judges that have sided with the federal government have essentially adopted their rationale. And their rationale is that the decision not to buy a product is the equivalent of engaging in commerce.

Now, think about that. Doing nothing is the equivalent of participating in commerce, because not doing something, not buying health insurance, has economic impacts.

That rationale has never been employed before. Never before has the federal government ordered the American people to buy a product, just because they’re living and breathing, under the Commerce Clause, under the power to regulate commerce. This is a completely unprecedented exercise of power.

And even judges who are somewhat favorable to their position — because no judge has ruled completely for the federal government — are — even they acknowledge the unprecedented nature of this power.

JEFFREY BROWN: Now, if the mandate is found unconstitutional, how do you see that impacting the larger law? Or do you care? I mean, would you like to see the larger law go down as well with it?

KENNETH CUCCINELLI: Well, certainly, I care a great deal.

I mean, we need health reform in this country. I really wish both sides, honestly, had focused a lot more on things where they might find agreement, things like buying health insurance across state lines, something I tried to get us the ability to do here in Virginia before I was an attorney general, when I was in the state Senate, to help our citizens access more types of coverage.

And — but that hasn’t happened. This law is actually getting in the way of that. And I would say that Mrs. DeParle talked about the things people might like in this law. And in a 2,700-page bill, I would think there’s something in there that anyone might like.

The problem is, they have stood it up on this unconstitutional foundation, and every law has to first be constitutional. And if the individual mandate continues to be found unconstitutional, as the judge did in Virginia last week, well, then even the federal government has admitted in their briefs that all of the insurance pieces fall with the individual mandate.

That’s the minimum that happens. Virginia’s asking that the entire law be stricken, because it never would have passed without the individual mandate.

JEFFREY BROWN: Of course, the judge…

KENNETH CUCCINELLI: Again, the federal government called this the linchpin of the legislation. And that’s their word, not mine.

And without that, it’s just inconceivable that this law would have been passed.

JEFFREY BROWN: Of course, the judge in Virginia didn’t go as far as you just said you wanted him to go.

KENNETH CUCCINELLI: Correct.

JEFFREY BROWN: Now, one of the arguments, if the mandate is taken out, is that, inevitably, insurance premiums go up, because how else can insurance companies afford to pay for many of these things that are in the law…

KENNETH CUCCINELLI: Right.

JEFFREY BROWN: … and some of which, as we have just said, are popular — Nancy-Ann DeParle made that case — are very popular with people.

KENNETH CUCCINELLI: Yes. And I note that some of them are.

I mean, benefits to people who get them are always popular. And I understand that. And it’s interesting to hear the Department of Justice and the White House lead in a discussion about constitutionality with sort of the emotional pitch to popularity.

And I understand it’s something we look at, but not when you’re determining whether something should be constitutional or not. This — the case, the litigation, really isn’t about health insurance. It’s about liberty, because if the federal government can order us to buy this product, because we need it, then they can order us to buy any product.

The power for the federal government is limitless under this theory of the Constitution, and the only limit left is majorities in Congress. And if it was just going to be majority rule, why have a Constitution in the first place?

JEFFREY BROWN: What is the — you talked about trying to expedite it. One question is, what’s the rush?

KENNETH CUCCINELLI: Oh, sure.

JEFFREY BROWN: You know, if this doesn’t go into effect until 2014 — things are moving along fairly quickly, as she pointed out, in various courts — why not let the process work to get to the Supreme Court eventually?

I mean, one question the skeptics have of what you’re doing is, are you worried that, the longer it plays out, gives more people time to see it and actually like parts — like more of it?

KENNETH CUCCINELLI: Well, actually, the evidence — as the speaker said, now that the bill is passed, we can see what’s in it. The evidence has been quite contrary to what Mrs. DeParle said and what the president himself said, is, once we pass it, I will get out there and sell it, the president said.

Well, the more people learned about it, the less they liked it, not the more. This whole thing is going to rise or fall on whether or not Congress has the power to order Americans to buy a private product.

JEFFREY BROWN: All right.

KENNETH CUCCINELLI: That’s what this case is going to rise or fall on. And the problem with waiting or delay, as we — we view it, is that the state of Virginia, the Commonwealth of Virginia, has an enormous amount of work to do to get ready.

Well, if the insurance pieces or the Medicare Medicaid, or the whole bill, is going to be struck down, we’re going to have wasted tens of millions of dollars trying to scramble to get ready.

JEFFREY BROWN: All right. All right. I…

KENNETH CUCCINELLI: Mrs. DeParle’s comment made it sound like you could snap your fingers and be ready on January 1, 2014. And there’s an awful lot of work that is going to go into being ready on time. And none of it may be left standing when the Supreme Court…

JEFFREY BROWN: All right, we have got to leave it there.

KENNETH CUCCINELLI: Thanks.

JEFFREY BROWN: Ken Cuccinelli is the attorney general of Virginia. Thanks very much.

KENNETH CUCCINELLI: Glad to be with you.