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Judge strikes down entire new health-care law

By N.C. Aizenman and Amy Goldstein
Washington Post Staff Writers
Tuesday, February 1, 2011; 9:32 AM

A federal judge in Florida on Monday became the first to strike down the entire law to overhaul the nation's health-care system, potentially complicating implementation of the statute in the 26 states that brought the suit.

The decision by U.S. District Judge Roger Vinson represents a more sweeping repudiation of the law than the December ruling in a suit brought by Virginia that found the requirement that most Americans purchase health insurance to be unconstitutional.

As the judge ruled in the Virginia case, Vinson held that Congress overstepped its authority by compelling nearly all Americans to be insured or pay a fine. But Vinson went further: Likening the law to "a finely crafted watch" in which "one essential piece is defective and must be removed," he ruled that the insurance mandate cannot be separated from the rest of the statute and therefore the entire law must be voided.

"There are simply too many moving parts ... for me to try and dissect out ... the able-to-stand-alone from the unable-to-stand alone," he wrote.

Even as he struck down the statute as a whole, Vinson rejected the plaintiffs' arguments against the part of the law that will expand Medicaid, the public insurance program for the poor and disabled that is jointly funded by the states and the federal government. The states contended that the expansion, to begin in 2014, infringes on their sovereignty. Vincent sided with the federal government, which argued that there is no infringement because states have the choice whether to participate in Medicaid. The Virginia case did not address the Medicaid issue.

Still, the decision bolsters Republican efforts to overturn the law through the courts. All but one of the state officials who brought the suit are Republican.

The case is one of 25 challenges that have been filed in federal courts since the law was enacted last March. Four suits have now been decided on their merits - two rulings upholding the law and, with Monday's decision, two finding all or part of it unconstitutional. The law's constitutionality is widely expected to ultimately be settled by the Supreme Court.

Vinson stopped short of granting an injunction, as the plaintiffs requested, to prevent the law from going forward while the case is appealed. He said such a step was unnecessary because of a "long-standing presumption" that the federal government adheres to rulings of this type.

That part of Vinson's ruling triggered an immediate dispute about the practical effects of the opinion.

David Rivkin, a conservative lawyer in Washington who represents the plaintiffs, said that the 26 states that are party to the lawsuit are no longer subject to any of the law's requirements - unless the federal government obtains a stay of Vinson's order from an appeals court. White House officials firmly rejected that view. "Implementation will proceed apace," one senior White House official said in a background briefing for reporters.

If the plaintiffs prove right, the provisions that could be thrown in doubt at least temporarily include some that are already in effect, such as one prohibiting states from saving money by tightening their eligibility standards for Medicaid.

The law's requirement that individuals purchase health insurance - the issue at the center of the lawsuit - will not take effect until 2014; nor will other important elements of the law, including the requirement that states set up "exchanges," or marketplaces, through which individuals and small businesses will be able purchase private insurance with federal subsidies.

"All of that is dead with regard to these 26 states," Rivkin said.

White House aides declined to discuss the opinion for attribution. But two senior officials, speaking to reporters on the condition of anonymity, disparaged the judge's ruling, repeatedly calling it an "outlier." One of the officials said, "The analysis on the whole is, to put it charitably, very unconventional."

Asked by several reporters whether the ruling could give states that oppose the law permission to stop work on putting it into practice, the officials were adamant that it would not. "He is one court," one of the officials said. "I don't think you should view this as the opening of the government shutting down implementation."

The Justice Department immediately announced that it plans to appeal the decision to the U.S. Court of Appeals for the 11th Circuit.

A Justice spokeswoman, Tracy Schmaler, also said in a statement, "We are analyzing this opinion to determine what steps, if any - including seeking a stay - are necessary while the appeal is pending" in order to continue implementing the law.

David Engstrom, a Stanford Law School faculty member, said that he does not interpret the opinion as preventing the law from going forward. "The issue that the court has ruled on has been specifically contradicted by two other district courts," he said. "So, the idea that the Obama administration should somehow stand down from implementing the act, based on a fourth district court, doesn't have any basis in law."

In his 78-page opinion, Vinson, who was appointed by President Ronald Reagan, offered the most lengthy consideration to date of the legal questions at issue. Specifically, he agreed with the states' argument that a person's refusal to buy health insurance does not amount to economic activity and is therefore beyond Congress's power to regulate under the Constitution's commerce clause.

Attorneys for the government have argued that since virtually everyone will need health care at some point and that, because hospitals cannot turn away patients who cannot pay for emergency care, people who do not obtain insurance are effectively making an economic decision about how and when they will pay for that care. Instead of paying now through insurance premiums, they are choosing to pay later, either out of their own pocket, or by passing the cost on to hospitals, governments or paying patients. Because this decision, when taken in the aggregate, has enormous impact on the health-care and insurance markets, the government contends that Congress is entitled to regulate it.

But Vinson held that this line of reasoning "is without logical limitations."

"Every person throughout the course of his or her life makes hundreds or even thousands of decisions that involve the same general thought process that the defendants maintain is 'economic activity,' " he wrote.

Vinson also rejected the government's argument that Congress also was justified in imposing the insurance mandate under the clause empowering Congress to make all laws "necessary and proper" to carrying out its enumerated constitutional powers.

The government maintains that, without the insurance mandate, many of the law's regulations on insurers would not be feasible - most notably its prohibition against insurers denying insurance or charging higher rates to those with preexisting conditions. If individuals could wait until they were on their way to a hospital before buying insurance, and insurers were forced to accept them, the companies would go bankrupt or be forced to raise their rates to unsustainable levels.

Once again, Vinson found no logical limit to the government's argument.

"Rather than being used to implement or facilitate enforcement of the Act's insurance industry reforms, the individual mandate is actually being used as the means to avoid the adverse consequences of the Act itself," Vinson wrote. "Under such a rationale, the more harm the statue does, the more power Congress could assume for itself under the Necessary and Proper Clause."

aizenmann@washpost.comgoldsteina@washpost.com

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