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Virginia Takes Health Reform Fight Through Courts

Country: 
USA
Partner Institute: 
Department of Behavioral Science and Health Education, Rollins School of Public Health, Emory University
Survey no: 
(16)2010
Author(s): 
Elena Conis
Health Policy Issues: 
Political Context
Reform formerly reported in: 
Virginia Takes Steps to Undo Health Reform
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Abstract

In Round 15, we reported on a Virginia law that became the first to restrict the provisions of the new federal health reform law. The Virginia law was part of a national state-led movement to challenge the Obama administration?s federal health reforms. As of October 2010, lawmakers in 40 states had proposed measures to restrict or undo the federal reforms, and several current lawsuits are now testing the federal law's provisions, with a suit filed by Virginia's attorney general leading the way.

Recent developments

In Round 15, we reported on a set of Virginia bills that led to the first state law-the Virginia Health Care Freedom Act-to oppose or restrict the provisions of the Patient Protection and Affordable Care Act (PPACA), the federal health reform bill that became national law this past March. Virginia's law, which states that no law or regulation may force individuals to purchase health insurance, earned the state national attention, as did the lawsuit that Virginia's Republican Attorney General, Ken Cuccinelli, subsequently filed against the federal government.

The Virginia bills were part of a nationwide, state-led movement to challenge the Obama administration's federal health reform law. To date, according to the National Conference of State Legislatures (NCSL), lawmakers in at least 40 states have proposed legislation to oppose, change, or restrict federal health reforms. Many of these states, like Virginia, have sought to keep health insurance optional; other state legislatures have targeted features other than the individual insurance mandate, such as the PPACA's Medicaid expansion and penalties for being uninsured. According to the NCSL, proposed bills have been either defeated or were otherwise not passed in 26 states so far. However, six states-Georgia, Idaho, Louisiana, Missouri, Utah and Arizona-have joined Virginia in passing laws that oppose the individual mandate provision of the federal law. As the NCSL points out, the laws generally state that no law or rule may compel any person or entity to purchase health insurance or participate in a health care system.

Cuccinelli's lawsuit (Virginia ex rel. Cuccinelli v. Sebelius) is likewise one of several that have been filed across the country since last March. By June of this year, at least six similar suits had been filed; all of them, like Virginia's, focused in essence on the individual mandate provision of the PPACA. By October, the total number of such lawsuits had grown to 15; three of these, including Virginia's, had gained considerable momentum and national attention. A suit filed by Florida Attorney General Bill McCollum (Florida et al v. Sebelius et al) has been joined by attorneys general and governors from 19 other states; the Florida suit challenges both the individual mandate and the Medicaid expansion. A suit filed by the Thomas More Law Center in Michigan (Thomas More Law Center et al v. Barack Hussein Obama) claimed the PPACA infringes upon religious freedom. Michigan federal district Judge George C. Steeh rejected the suit filed in that state, ruling in early October that the federal law was constitutional. Later that month, by contrast, Florida district judge Roger Vinson ruled that that state's challenge to the constitutionality of the mandate and Medicaid expansion (he dismissed four separate complaints) could proceed. Opening arguments for the Florida case are scheduled to begin in mid-December.

Virginia's suit, filed the same day as Florida's, is already further along in the courts. In August, Virginia federal district court Judge Henry Hudson denied the Department of Health and Human Services' request to dismiss the suit, instead permitting it to proceed to hearings. The hearings were held in mid-October, and Judge Hudson is expected to announce his decision on the case by the end of the calendar year.  

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Characteristics of this policy

Degree of Innovation traditional rather traditional innovative
Degree of Controversy consensual neutral highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low very high very high
Transferability strongly system-dependent neutral system-neutral
current current   previous previous

The lawsuits and Republican antagonism toward federal health reform generally are frequent newsmakers and therefore highly visible. Because of their high visibiilty, the suits have been popular election season tools for demonstrating a commitment to overturning Democratic policies. The Democrats suffered losses in the recent election in large part due to the continuing economic recession; popular dissatisfaction with certain aspects of health reform only compounded Democratic losses.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Initiators of idea/main actors

  • Government
  • Patients, Consumers
  • Private Sector or Industry

Stakeholder positions

Across the nation, federal health reform remains highly divisive. In an October 2010 poll by the Associated Press and research firm GfK, just over a third (36%) of Americans wanted the federal health reform law strengthened, and the same number (37%) wanted the federal law repealed. Just 15% of Americans reported that they were satisfied with the law in its current state.

While some features of the PPACA are broadly popular (including provisions that prevent insurers from dropping sick enrollees and that allow young adults to remain on their parents' insurance plan until age 26), the so-called individual mandate is hotly contested-and yet, it has been called, repeatedly, the lynchpin of federal health reform. The mandate would fill the pool of insured with low-cost, healthy individuals, which would help insurers adhere to other provisions of the PPACA that restrict their ability to limit or deny coverage to high-cost individuals (such as those with pre-existing conditions) or charge premiums based on health status, age, or gender. Despite the centrality of the mandate, it's opposed by a significant fraction of Americans on largely ideological grounds; that is, it is seen as an unwarranted expansion of federal power. In Virginia, at the very least, the opposition to the mandate is not strictly ideological, but it may have been political. The state's Democratic and Republican legislators supported the Virginia Health Care Freedom Act by large margins in both the House and the Senate last spring. Support for the state's lawsuit is also strong-particularly among conservatives-despite its cost to taxpayers.

Actors and positions

Description of actors and their positions
Government
VA Attorney General Cuccinellivery supportivevery supportive strongly opposed
Judge Henry Hudsonvery supportiveneutral strongly opposed
DHHSvery supportivestrongly opposed strongly opposed
House Republicansvery supportivevery supportive strongly opposed
Patients, Consumers
Consumersvery supportiveneutral strongly opposed
Private Sector or Industry
Insurersvery supportiveopposed strongly opposed
current current   previous previous

Influences in policy making and legislation

Cuccinelli is arguing that the PPACA is unconstitutional because it invokes the Commerce Clause to regulate "inactivity" or "noneconomic activity"-that is, the failure to purchase health insurance. If an individual chooses not to participate in commerce, according to Cucinelli, the Commerce Clause should not be used to regulate his activity. Cuccinelli's case is based on the premise that the PPACA represents an expansion of the Commerce Clause that could, theoretically, be used to (in his words) "ordering citizens to buy a particular brand of car." (Conservative commentators have expressed the fear that the PPACA could set a precedent that would permit the federal government to force citizens to buy electric cars or solar panels.)

The administration, meanwhile, has argued that the Commerce Clause is a just basis for the PPACA, since it is virtually impossible to not consume healthcare, and therefore all U.S. residents will, at some point, participate in the health care market. Legal scholars also point to a precedent set by a 2005 Supreme Court case that determined that even noneconomic activity could be subject to Congressional regulation if it was a crucial part of regulating a broader aspect of interstate commerce (see Perkins, in Sources, below).

As Virginia's suit has proceeded, Attorney General Cuccinelli has attained the label of "rising star" in conservative politics. During the fall election season he spoke at high profile conservative events and campaigned for congressional candidate in his own state as well as Republican attorney general candidates in other states. He has frequently argued that his case is not about healthcare, but about liberty and freedom, and his frequent invocations of Revolutionary era politics and Founding Father principles have undoubtedly resonated with the burgeoning Tea Party movement. The suit has thus transformed Cuccinelli from a state attorney general into an influential political figure at the national level, and he has likewise put his own state's politics on the national map.  

Actors and influence

Description of actors and their influence

Government
VA Attorney General Cuccinellivery strongvery strong none
Judge Henry Hudsonvery strongstrong none
DHHSvery strongvery strong none
House Republicansvery strongvery strong none
Patients, Consumers
Consumersvery strongneutral none
Private Sector or Industry
Insurersvery strongneutral none
current current   previous previous
VA Attorney General Cuccinelli, House RepublicansConsumersJudge Henry HudsonInsurersDHHS

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

While some features of the federal law began to take effect in July, the insurance mandate does not go into effect until 2014. For this reason, some judges have dismissed lawsuits on the ground that they have "no standing" and are not yet "ripe" - that is, the plaintiffs are not currently experiencing harm because the mandate is not in effect and won't be for several years.  

Expected outcome

In permitting both cases to proceed, the district court judges in Florida and Virginia expressed that questions regarding the constitutionality of the mandate and the Medicaid expansion are unresolved. The district judge who rejected the Michigan case ruled that the federal government is acting within its authority by enacting the mandate and the penalty that will be levied on those who chose not to purchase insurance. The rulings have so far followed partisan lines; Florida and Virginia Judges Vinson and Hudson were nominated by Republican presidents (Ronald Reagan and George W. Bush, respectively); Michigan Judge Steeh was nominated by Democrat Bill Clinton.  

Judge Hudson is expected to rule on the Virginia case by the end of 2010. Even if he rules in favor of the state of Virginia, the case is expected to be appealed and will likely make it to the Supreme Court. White House and U.S. Justice Department spokespersons, meanwhile, have expressed confidence that PPACA will endure, just as the Social Security Act, the Civil Rights Act, and the Voting Rights Act held up to constitutional challenges in the past (see Kaiser, in Sources).

Regardless of judicial rulings, the PPACA may end up stalled on other fronts. Republicans won substantial victories in the November 2010 elections, shifting the House majority to the right. Shortly after obtaining the majority position, Republic lawmakers announced that although they may be unable to repeal the PPACA in its entirety, they intend to weaken it by putting draconian spending restrictions in effect. In the meantime, the Virginia and Florida suits, along with others, will proceed.  

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable system less equitable system more equitable
Cost Efficiency very low very low very high
current current   previous previous

Should the courts ultimately find the individual mandate unconstitutional, health care reform will likely be stymied and costs will likely continue to rise unsustainably.

References

Sources of Information

Alonso-Zaldivar, Ricardo, and Jennifer Aglesta. "Poll: U.S. Split Over Health Care Repeal." Atlanta Journal Constitution, Oct 23, 2010, A4.

Commonwealth of Virginia, Ex Rel. Kenneth T. Cuccinelli, II v. Sebelius. http://dockets.justia.com/docket/virginia/vaedce/3:2010cv00188/252045/

Kaiser Health News. "Suit Against Health Law Will Move to Trial After Florida Judge's Ruling." October 15, 2010. www.kaiserhealthnews.org/Daily-Reports.

National Conference of State Legislatures. "State Legislation and Actions Challenging Certain Health Reforms, 2010," updated Oct 26, 2010. www.ncsl.org/default.aspx?tabid=18906.

Perkins, Jane. Overview of Litigation Filed to Stop Health Reform. National Health Law Program, June 2010. www.healthlaw.org/images/stories/Overview_of_Litigation_Filed_to_Stop_Health_Reform
_Jun2010.pdf

Pear, Robert. "G.O.P. to Fight Health Law With Purse Strings." New York Times, Nov 7, 2010, p A1. 

Reform formerly reported in

Virginia Takes Steps to Undo Health Reform
Process Stages: Legislation

Author/s and/or contributors to this survey

Elena Conis

Suggested citation for this online article

Elena Conis. "Virginia Takes Health Reform Fight Through Courts". Health Policy Monitor, October 2010. Available at http://www.hpm.org/survey/us/a16/3