States Take Legal Action to Counteract Federal Mandates

Some states are taking aggressive measures to stymie implementation of crippling federal health reform mandates. Of the 20 active cases in judicial districts across the United States, with 21 states as plaintiffs, three suits for legal remedies are gaining traction.

The State of Florida has taken a lead role with the most far-reaching health law legal challenges to the Patient Protection and Affordable Care Act (PPACA). Florida Attorney General Bill McCollum is lead counsel for 20 states—including 18 Republican attorneys general and governors and two Democratic attorneys general—in the suit against the U.S. Department of Health and Human Resources for violating several parts of the Constitution. They argue that Congress overstepped its bounds by unfairly burdening states with exorbitant costs to expand the federal Medicaid insurance coverage for those living in poverty. Florida, McCollum said, simply cannot afford it, and the federal government cannot mandate coverage as a venue to impose a direct tax.

Of the 20 states, six represent the South: Alabama, Florida, Georgia, Louisiana, Mississippi, and South Carolina.

Mississippi Gov. Haley Barbour, head of the Republican Governors Association, joined the plaintiffs after Democratic Attorney General Jim Hood declined, explaining, "This legislation will not only affect Medicaid costs, but also will influence how we pay for other essential public services, from law enforcement to public schools."

Milliman Inc., a consultant contracted by the Division of Medicaid, estimated the mandates would increase costs for Mississippi taxpayers by $1.7 billion over the next decade. Mississippi is the nation's poorest state. In FY 2012, Medicaid costs alone—$819 million—would consume approximately 15 percent of the state's general fund budget. "And remember," Barbour said, "Milliman's analysis focused solely on the expansion of the state's Medicaid program and not on the number of additional unfunded mandates contained in the law. I fully expect more than 400,000 new individuals will be added to the Medicaid rolls, meaning one in three Mississippians will participate in the state's Medicaid rolls. Frankly, I'm concerned that the real-world impact ... on Medicaid in Mississippi will surpass Milliman's projections."

On Oct. 14, U.S. District Court Judge Roger Vinson paved the way for a significant challenge to the Obama Administration's healthcare overhaul by noting the mandate requiring Americans to carry health insurance is unconstitutional, and writing that "the power that the individual mandate seeks to harness is simply without prior precedent." The ruling also brought to light a strange twist. The PPACA could be struck down if certain parts aren't legally allowed because the Democrats who drafted the legislation didn't include a severability clause. Both sides will present oral arguments on the motion for summary judgment on Dec. 16.

"I'm pleased the judge has allowed our challenge to the individual mandate contained in the Obamacare bill to go forward," said Barbour. "So far, three different federal judges have considered the challenges to Obamacare, and every one of them has found the challenges to be serious complaints, worthy of being resolved. The individual mandate represents an unprecedented expansion of federal power that is inconsistent with the Constitution."

Within days of the ruling, incoming Florida House Speaker Dean Cannon requested detailed activity of all state agencies implementing healthcare reform mandates by mid-November, saying that new activities after Nov. 15 would be allowed only "after notification and consultation with the Legislature."

"We cannot wait until the courts sort through the many challenges by the states to the federal health law or until a wiser Congress readdresses the law's numerous problems," said Cannon, a Republican from Winter Park. "Many provisions are taking effect now and Florida's response must be deliberate and decided by elected state policymakers rather than by default."

Cannon said the law "nationalized numerous functions of state government," adding that state agencies might be working to carry out parts of the act without having authority to do so under state law.

In two other key cases questioning the validity of healthcare reform measures, U.S. District Court Judge George Steeh recently ruled in the case of Thomas More Law Center versus President of the United States that the requirement for people to carry health insurance or pay a penalty was indeed constitutional. Law Center lead counsel Richard Thompson is expected to appeal.

The Commonwealth of Virginia versus U.S. Health and Human Services Secretary Kathleen Sebelius has gained more ground than other state-led challenges, perhaps because the suit's focus is narrower. Virginia Attorney General Ken Cuccinelli argued that state lawmakers passed a governor-approved bill earlier this year that opposed the federal requirement to buy insurance, and that the law bolsters the case. The complaint explains that, according to the Commerce Clause, whether a Virginian purchases health insurance isn't a matter of interstate commerce, and that Congress cannot regulate it as part of its powers, and that giving Congress this power undermines the concept of enumerated powers in the Constitution.

On Oct. 18, U.S. District Court Judge Henry Hudson said he would rule about the constitutionality of the Patient Protection and Affordable Care Act by Jan. 1. The case has already survived a Motion to Dismiss.

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