Health Care Reform Update: District Court Rules in Favor of Commonwealth of Virginia
On Monday, December 13th, a federal district court judge ruled in favor of the Commonwealth of Virginia in its case challenging the constitutionality of the Patient Protection and Affordable Care Act (Virginia v. Sibelius). The ruling did not strike down the entire law, but the portion of it requiring Americans to purchase health insurance.
Several similar lawsuits have been dismissed or have upheld the law, but this is the first that has sided with reform opponents. The Department of Justice stated that it plans to appeal the decision and that this will have no immediate impact on implementation of the law since this provision is not effective until 2014.
The major argument centers on the Commerce Clause of the Constitution and questions whether or not Congress has the authority under its powers to regulate interstate commerce by requiring individuals to enter the market and purchase health insurance. Opponents state the clause does not grant the government the authority to require purchase of a specific product which is something unsupported in past legislation or case law.
The requirement to purchase coverage is one that many insurance companies support. While the provision creates more revenue for them, it also provides more risk spread which helps keep premiums down. This is especially important in the individual market which will bear the brunt of the removal of pre-existing condition provisions.
Hearings also begin this week in what is expected to be another landmark case. Attorneys general in approximately 20 other states have joined Florida as co-defendants in a lawsuit challenging not only the individual coverage mandate but the expansion of Medicaid as well.
There will be more to come as these cases and others make their way through the courts. Ultimately, the Supreme Court will most likely decide whether or not individuals can be required to purchase insurance - a process which might take years - though Republicans are pushing the Department of Justice to request the high court to skip the appellate process and hear the case now.
HORAN will continue to keep you updated as future developments come to light. If you have any questions or need additional information, please contact your HORAN account manager.
