Today’s Health Care Court Ruling

Posted by White House

Today’s narrow ruling in Virginia on the constitutionality of a provision of the Affordable Care Act is just one of many recent rulings on similar cases that have come down in recent months. Since the law passed, opponents of reform have filed more than 20 different legal challenges. Judges have already granted the Administration’s motion to dismiss 12 of these cases. And in two cases, federal judges looked at the merits of the opponents’ arguments, determined that the Affordable Care Act is constitutional and upheld the law.

We disagree with the ruling issued today in Virginia and the Department of Justice is considering its appeal options.

We are pleased that Judge Hudson agrees that implementation of the law will continue uninterrupted. In the nine months since the health reform law was passed, we’ve made tremendous progress to strengthen our health care system, including lowering costs and implementing a new patient’s bill of rights to end some of the worst insurance company abuses. That work continues. And we’re confident that when it’s all said and done, the courts will find the Affordable Care Act constitutional.

History and the facts are on our side. Similar legal challenges to major new laws -- including the Social Security Act, the Civil Rights Act, and the Voting Rights Act -- were all filed and all failed. Contrary to what opponents argue the new law falls well within Congress’s power to regulate economic activity under the Commerce Clause, the Necessary and Proper Clause, and the General Welfare Clause.

Opponents of reform claim that the individual responsibility requirement – the requirement that all Americans carry a minimum level insurance by 2014 –exceeds Congress’ power to regulate interstate commerce because it penalizes economic “inactivity.” Make no mistake -- individuals who choose to go without health insurance are actively engaged in economic decision making – the decision to pay for health care out-of-pocket or to seek uncompensated care. Every year millions of those who have chosen to go without health insurance actively seek medical care, which is evident in the billions of dollars spent on uncompensated care every year.

The Affordable Care Act came into being precisely because of the interconnectedness of our health care costs. People who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay. Those costs – $43 billion in 2008 alone – are borne by doctors, hospitals, insured individuals, taxpayers and small businesses throughout the nation. This cost-shift added on average $1,000 to family premiums in 2009 and roughly $410 to an individual premium.

This concept is clearly seen in other areas of commerce. For example, in most states, drivers are required to carry a minimum level of auto insurance. Accidents happen and when they do, they need to be paid for quickly and responsibly. Requiring drivers to carry auto insurance accomplishes this goal. Similarly, the Affordable Care Act, through the individual responsibility requirement, will require everyone to carry some form of health insurance since everyone at some point in time participates in the health care system, and incur costs that must be paid for.

It’s no surprise then, that President Reagan’s Solicitor General Charles Fried recently wrote, “the health care law’s enemies have no ally in the Constitution.” Two federal judges that recently ruled on the challenge to the constitutionality of the reform law in Michigan and Virginia agreed. These lawsuits were dismissed, with the federal judge in Virginia concluding “how and when to pay for health care are activities…in the aggregate…substantially affect[s] the interstate health care market.”

Two federal judges have agreed with this argument. In an earlier ruling in the Western District of Virginia, a federal judge wrote:

“I hold that there is a rational basis for Congress to conclude that individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market…Nearly everyone will require health care services at some point in their lifetimes, and it is not always possible to predict when one will be afflicted by illness or injury and require care…Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.”

The Affordable Care Act also bans insurance companies from discriminating against people with preexisting conditions. However, unless every American is required to have insurance, it would be cost prohibitive to cover people with preexisting conditions. Here’s why: If insurance companies can no longer deny coverage to anyone who applies for insurance – especially those who have health problems and are potentially more expensive to cover – then there is nothing stopping someone from waiting until they’re sick or injured to apply for coverage since insurance companies can’t say no. That would lead to double digit premiums increases – up to 20% – for everyone with insurance, and would significantly increase the cost health care spending nationwide. We don’t let people wait until after they’ve been in a car accident to apply for auto insurance and get reimbursed, and we don’t want to do that with healthcare. If we’re going to outlaw discrimination based on pre-existing conditions, the only way to keep people from gaming the system and raising costs on everyone else is to ensure that everyone takes responsibility for their own health insurance.

There have been many rulings on court cases regarding health reform and we know there will be many more. In the end, the Affordable Care Act will prevail and the American people will enjoy the benefits of reform.

Also Visit: Florida Villas

Health Reform Wins Another Round in Court

Posted by White House

After the Affordable Care Act became law, opponents of reform lined up at courthouses nationwide to file lawsuits challenging the constitutionality of health reform. These kinds of challenges often happen after major legislation is enacted. In fact, legal challenges to the Social Security Act, the Civil Rights Act, and the Voting Rights Act were all filed – and all failed.

Now, lawsuits challenging the constitutionality of the Affordable Care Act are losing in federal court. Today, a federal judge in New Jersey who was appointed to the bench by President George W. Bush granted the Justice Department’s motion to dismiss a case challenging the constitutionality of the health reform law. You can read media coverage of the decision here.

The case dismissed in New Jersey can now be added to a longer list of cases challenging the Affordable Care Act that have been dismissed by the courts. That list includes:

Sollars v. Reid -dismissed 4/2/10
Taitz v. Obama - dismissed 4/14/10
Archer v. U.S. Senate - dismissed 4/12/10
Heghmann v. Sebelius - dismissed 5/14/10
Mackenzie v. Shaheen - dismissed 5/26/10
Fountain Hills Tea Party Patriots v. Sebelius - dismissed 6/2/10
Coalition for Parity Inc. v. Sebelius - dismissed on 6/21/10
U.S. Citizens Association v. OMB - dismissed 8/2/10
Baldwin v. Sebelius – dismissed 8/27/10
Burlsworth v. Holder - dismissed 9/8/10
Schreeve v. Obama - dismissed 11/4/10

And the decision in New Jersey comes after two previous victories for health reform in the Western District of Virginia and Eastern District of Michigan where judges ruled on the merits of the arguments brought by the opponents of reform. In Virginia, the judge wrote:

“I hold that there is a rational basis for Congress to conclude that individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market…Nearly everyone will require health care services at some point in their lifetimes, and it is not always possible to predict when one will be afflicted by illness or injury and require care…Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.”

And in Michigan, a federal judge issued a similar ruling and upheld the law.

The Affordable Care Act falls well within Congress’s power to regulate under the Commerce Clause, the Necessary and Proper Clause, and the General Welfare Clause. In order to make health care affordable and available for all, the law regulates how to pay for medical services – services that account for more than 17.5% of the national economy. This law came into being precisely because of the interconnectedness of our health care costs, and we need every American to act responsibly to strengthen our health care system. When people seek medical care without health insurance and don’t pay for it, it adds more than $1,000 per year to the premiums of American families who act responsibly by having coverage. To lower the cost of health care for everyone, we have to stop making those who act responsibly pick up the health care tab for those who don’t – and that means we need everyone to be a part of the health insurance marketplace. Just as you can’t wait to get car insurance until you get into a car accident or rely on others to pay for the damages, you can’t wait until you get sick to get health insurance, or rely on the fact that emergency rooms won’t turn you away even if you can’t pay.

To fix the problem of uncompensated care and the shifting of costs to those who have insurance, the Affordable Care Act requires people who can afford it to carry minimum health coverage beginning in 2014. For the 83% of Americans who have coverage today, this means they are already taking responsibility for their health care, and will need to do very little. Many of the 17% of Americans living without health insurance either can’t afford it or have been denied coverage because of a preexisting condition. The Affordable Care Act provides tax credits to people who need help paying for insurance and hardship waivers to individuals or families who can’t afford it at all. And the Act expands Medicaid coverage for many lower income Americans. Those who can afford it, but refuse to buy it, will face a penalty.

The Affordable Care Act also bans insurance companies from discriminating against people with preexisting conditions. However, unless every American is required to have insurance, it would be cost prohibitive to cover people with preexisting conditions. Here’s why: If insurance companies can no longer deny coverage to anyone who applies for insurance – especially those who have health problems and are potentially more expensive to cover – then there is nothing stopping someone from waiting until they’re sick or injured to apply for coverage since insurance companies can’t say no. That would lead to double digit premiums increases – up to 20% – for everyone with insurance, and would significantly increase the cost health care spending nationwide. We don’t let people wait until after they’ve been in a car accident to apply for auto insurance and get reimbursed, and we don’t want to do that with healthcare. If we’re going to outlaw discrimination based on pre-existing conditions, the only way to keep people from gaming the system and raising costs on everyone else is to ensure that everyone takes responsibility for their own health insurance. If a court strikes down the individual responsibility provision, then protection for people with preexisting conditions will fall with it.

In the weeks ahead, there will be additional court cases examining this matter and the health reform law. No one knows how each case will be decided, but in the end, we are confident that health reform will prevail.

Stephanie Cutter is Assistant to the President for Special Projects

Today’s Ruling in Florida

Posted by White House

Since the enactment of health reform legislation in March, Republican Attorneys General in several states have filed lawsuits challenging the constitutionality of the Affordable Care Act. Having failed in the legislative arena, opponents of reform are now turning to the courts in an attempt to overturn the work of the democratically elected branches of government. This is nothing new. We saw this with the Social Security Act, the Civil Rights Act, and the Voting Rights Act – constitutional challenges were brought to all three of these monumental pieces of legislation, and all of those challenges failed. So too will the challenge to health reform.

Today, a judge in Florida dismissed four of the six claims in the Attorneys General suit, and issued a procedural ruling allowing two claims to move forward. As the judge noted in his opinion, today’s ruling was not a decision on the merits of the constitutional claims in the case. Such a ruling will come only after the judge has had the “benefit of additional argument and all evidence in the record that may bear on the outstanding issues.”

However, last week Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan did rule on the merits when he dismissed a constitutional challenge to the Affordable Care Act. In his ruling on the constitutionality of having everyone who can afford to carry minimum health coverage, Judge Steeh, stated:

“The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers. . . . These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance.”

The Michigan decision reinforces 70 years of Supreme Court precedent by concluding that the Affordable Care Act falls well within Congress’ power to regulate under the Commerce Clause. It reaffirms precedents that, in the words of Chief Justice Roberts, are designed to preserve the “judiciary’s proper role in our system of government” and to ensure that our courts do not become forums for political debates.

There were two important points in the Judge’s ruling.

First, the judge rejects the plaintiff’s claim that the Affordable Care Act is an unprecedented exercise of the commerce power to regulate “inactivity.” People who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay.

“No one can guarantee his or her health, or ensure that he or she will never participate in the health care market. Indeed, the opposite is nearly always true. The question is how participants in the health care market pay for medical expenses – through insurance, or through an attempt to pay out of pocket with a backstop of uncompensated care funded by third parties. This phenomenon of cost-shifting is what makes the health care market unique. Far from ‘inactivity,’ by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants. As this cost-shifting is exactly what the Health Care Reform Act was enacted to address, there is no need for metaphysical gymnastics.”

Second, the judge points out that the landmark insurance market protections, including banning insurers from denying coverage to individuals with pre-existing conditions, can only be effective if everyone is part of the system. He states that “[w]ithout the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times. As a result, the most costly individuals would be in the insurance system and the least costly would be outside it. In turn, this would aggravate current problems with cost shifting and lead to even higher premiums.”

Repealing the minimum coverage provision of the Affordable Care Act would have devastating consequences for millions of Americans:

• Because we do not leave people to die at the emergency room door –spending on uncompensated care would be $43 billion or higher. According to a recent study, this cost-shift added on average $1,100 to family premiums in 2009 and roughly $410 to an individual premium.
• 39 million people would be uninsured, 16 million more than would be uninsured if the provision remains law.
• According to the Congressional Budget Office, average premiums would rise by 15 to 20 percent.

Now that this preliminary stage has ended, the government fully expects to prevail on the merits. As President Reagan’s Solicitor General Charles Fried recently wrote, “the health care law’s enemies have no ally in the Constitution.”