Health Reform Act Challenged By State Suits, Va. Bill

Gov. McDonnell signed a measure, passed last month by the Virginia General Assembly, stating in part that no resident "shall be required to obtain or maintain a policy of individual insurance coverage except as required by a court or the Department of Social Services…"

The state statute is in direct conflict with the new Patient Protection and Affordable Care Act, mandating that all Americans buy some form of health insurance starting in 2014.

Yesterday, the state's attorney general, Ken Cuccinelli, filed a lawsuit in U.S. District Court in Richmond, arguing the Virginia law is valid despite the Supremacy Clause in the U.S. Constitution because the federal act is unconstitutional.

The action argues that the federal health reform law is an impermissible overreaching of the government's ability to regulate U.S. business under the Commerce Clause of the Constitution.

Meanwhile, in Florida, a suit challenging the federal law was filed in U.S. District Court in Pensacola by 12 Republican attorneys general and one Democrat.

The Democrat who signed on was Attorney General James Caldwell of Louisiana, who said he did so after Republican Gov. Bobby Jindal made a request, which he agreed with.

The filing argues that the health reform act is an "unprecedented encroachment of the sovereignty of the states"and has a tax penalty" for the uninsured that violates sections of the Constitution dealing with taxes.

White House domestic policy chief Melody Barnes was quoted by Associated Press as saying of the suits, "Bring it on," adding: "If you want to look in the face of a parent whose child now has health care insurance and say we're repealing that…go right ahead." She also cited the failure of legal challenges brought after passage of Social Security and the Voting Rights Act.

Senior White House adviser David Axelrod yesterday commented that every single major piece of legislation "that's ever been passed in this country has engendered lawsuits. That's the nature of our system and we expected that. We're not concerned about these lawsuits."

Mr. Hartwig noted that the majority of states have not sued, and he said he believed that legally such a challenge is "a steep uphill climb."

Some insurers may agree and some may disagree with the legislation, "but ultimately every industry is going to adjust to the new health care bill."

Among the provisions that insurers should appreciate, he said, is one that allows them to charge smokers 50 percent more for coverage. "They have to pay more, [just] like a bad driver," he noted.

Another provision provides that employees enrolled in a company wellness program or meeting certain health standards can get a 30 percent reduction in premiums, which could prove a benefit for disability and workers' comp insurers if it prods employees to improve their health and lower their number of claims.

"The American work force is a ticking time bomb. In many states the majority of the work force is overweight," which produce more medical coverage claims, he noted.

Gov. McDonnell, signed the Virginia Healthcare Freedom Act at 3 p.m. with Attorney General Cuccinelli and members of the General Assembly present.

He later issued a statement noting that, "The Act was passed with bipartisan support, in sharp contrast to the narrow straight line partisan vote that enacted the federal health care bill on Sunday night. Virginia's Healthcare Freedom Act received the votes of leading Democratic Senators, as well as the Democratic House Minority Leader. It was an important step to sign this bipartisan legislation today."