Opponents present case against Obama's health care law

PENSACOLA, Fla. - A year ago, thousands of Americans were so enraged by the pending health care overhaul bill that they packed their Congress members' summer town hall meetings, transforming the annual political rituals into emotional screaming matches.

On Tuesday, as 20 states seeking to nullify the law squared off against the Obama administration in a federal courthouse in Pensacola, the popular outpouring was largely limited to a single man who braved the withering heat to brandish a sign reading "Healthcare Makes Us Sick."

Yet the paltry showing comes as polls indicate that the public remains profoundly ambivalent about the president's signature legislative achievement. And there's a chance that the soft-spoken lawyers may accomplish what the most vocal protestors at last year's town halls could not: By the end of Tuesday's hearing, Judge Roger Vinson of the U.S. District Court for the Northern District of Florida said he was likely to rule against the Obama administration's motion to throw out the case "on at least one count."

If the judge, who said he will render his decision no later than Oct. 14, rules in the states' favor, he will only be upholding their standing to argue the merits of their claim that the law violates the Constitution.

Virginia, which is mounting a similar but distinct federal suit, already won that battle and is preparing for an Oct. 18 hearing on its motion for summary judgement.

Attorneys in the multi-state lawsuit - originally filed by Florida Attorney General Bill McCollum, R, and the Republican attorneys general of 12 other states within hours of the law's adoption in March - would probably face a hearing on summary judgement on Dec. 16.

In addition to Florida, the states party to the suit are South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia and Alaska. Two individuals and the National Federation of Independent Business have also joined.

Along with Virginia's suit, the multi-state effort appears to be the most promising among the 15 to 20 lawsuits challenging some aspect of the health care law, according to a Justice Department estimate.

So far the other suits don't appear to have fared as well, with judges in California and Maryland dismissing two of them.

As with the debate over the law itself, the effort to overturn it through the courts is causing political rifts in many states. Four governors who disagreed with the decisions by their attorneys general to join the multi-state suit have attempted to file amicus briefs supporting the Obama administration's position. (Vinson did not accept them for the early stage of the case but did not rule out allowing them if it moves forward.)

Meanwhile, for all the public's discomfort with the new law, it is not clear that voters will reward those who seek to overturn it. Three attorneys general who took a prominent role in the lawsuit were recently defeated in Republican primaries, including McCollum, who lost his bid to be the GOP's nominee for governor of Florida.

Still, McCollum was both ebullient and determined after Tuesday's hearing, declaring at a news conference on the courthouse steps that "this is going to be the most significant case in my lifetime. ... Our system of federalism rests on the decisions of this court."

During Tuesday's oral arguments, Vinson, an appointee of President Ronald Reagan, asked questions that gave both sides reason for optimism.

One example was the issue of the law's expansion of Medicaid eligibility to include low-income individuals, as well as the poorest of the poor. Although the federal government will initially fund the entire cost of the newly eligible, by 2020 states will have to foot 10 percent of the bill.

Medicaid is a voluntary program. If states don't wish to spend the extra money to expand coverage, they can - at least theoretically - pull out. However, the states argue that because doing that would force them to give up a huge cash infusion from the federal government and would leave millions of their poorest citizens without insurance, the government has them over a barrel. Therefore, they are effectively being coerced to increase their spending - a violation of their sovereignty under the Constitution.

Administration lawyers have countered that this line of reasoning would make it impossible for Congress to make any changes to Medicaid, and they point to court decisions that have upheld such changes in the past.

But the judge seemed sympathetic to the states' perspective. "Doesn't this really put all 50 states on the short end of the stick? . . . The states are in a catch-22 situation because the government dominates the ability to raise income. The states are left almost powerless."

A similar exchange occurred when Deputy Assistant Attorney General Ian Heath Gershengorn attempted to counter the states' claim that Congress exceeded its constitutional authority by requiring that virtually all Americans obtain health insurance or pay a tax penalty.

Although the Constitution grants Congress the power to regulate interstate commerce, attorneys for the states argued in legal briefs that the failure to buy insurance is a form of "inactivity" that "by its nature cannot be deemed to be in commerce."

They say that "to do so would arm Congress with unbridled top-down control over virtually every aspect of persons' lives." And they contend that there is no legal precedent for regulating such "inactivity."

Gershengorn argued that because "virtually everyone at some point needs medical services," choosing not to purchase insurance is merely a decision about whether to pay for those services in advance, through insurance, or later, out of pocket. Either way, it's an economic decision that falls within the scope of the commerce the law seeks to regulate.

But Vinson pressed him on the point, stating that "even the Congressional Budget Office, which is supposed to be relatively neutral . . . back in 1994 said that this 1/8argument 3/8 is unprecedented and has never been done in any case law."

Still, Vinson at times appeared to agree with the government's further argument that because the uninsured generally cannot be turned away from emergency rooms, they often end up passing on a substantial share of the cost of their care to third parties - hospitals and local governments, for example. Americans who wait until they are older and sicker to get insurance end driving up premiums for everyone by skewing the risk pool toward the unhealthy.

Unless the risk is spread evenly, it would also be impossible for insurers to comply with the law's requirements that they cease practices such as discriminating against people with preexisting conditions. So the administration argues that the requirement that everyone obtain minimum insurance "forms an essential part of a comprehensive interrelated regulatory scheme" well within the scope of Congress's power.

Vinson also occasionally voiced skepticism over the narrowness with which the states interpreted some of Congress's constitutional powers, at one point telling one of the states' attorneys, David Rivkin, "Your arguments would have been good in 1930, but is there a single case in the last 90 years that supports this?"