Federal Judge Upholds Healthcare Reform in Virginia

December 2, 2010

Reuters reported yesterday that a Virginia lawsuit challenging the healthcare law known colloquially as “Obamacare” was dismissed by a federal judge. The challenge, one of several such attempts to strike down healthcare reform, was brought by Liberty University (a conservative Christian school) and individuals who claimed that the law is unconstitutional.

U.S. District Judge Normal Moon, however, ruled that the law that requires individuals to purchase health insurance and requires employers to provide coverage for their employees was legal under the U.S. Constitution’s Commerce Clause.

Moon’s findings were that without the coverage requirements mandated by the law, the cost of health insurance would increase as the number of individuals with insurance declines, which is, “…precisely the harms that Congress sought to address with the Act’s regulatory measures.” He also found that since interstate commerce would be adversely affected by large businesses failing to offer adequate healthcare coverage to employees, “…the employer coverage provision is a lawful exercise of Congress’ Commerce Clause power.”

Liberty University was founded by the conservative evangelist Jerry Falwell. Its legal counsel was not available for comment.

The state of Virginia has also filed a challenge to the healthcare law, as have twenty other states, in a federal court in Florida, with many of the challenges addressing whether or not the government is allowed to regulate the purchase (or not) of a good or service under he Commerce Clause, and whether the fines are really a tax. Rulings are expected during the coming weeks and months.

While the challenging states believe the fines are taxes, Judge Moon found that the fines were merely “penalties” as they are not meant to raise revenue, but just to, “…enforce the requirement that individuals and employers purchase or provide health insurance.”

Addressing the opponents of the law who have argued that it illegally permits federal funding for abortion, Moon said “they fail to allege how any payments required under the Act, whether fines, fees, taxes, or the cost of the policy, would be used to fund abortion,” and stressed that there are safeguards in place to prevent that from occurring.

President Obama’s administration is pleased about Moon’s decision, the second major ruling in favor of the healthcare reform law. A federal judge in Michigan was the first, upholding the provisions requiring American citizens to purchase health insurance coverage.

In a blog post, Stephane Cutter, a White House adviser, wrote, “The judge’s ruling today only underscores the importance of the law’s individual responsibility provision. In order to make health care affordable and available for all, the Act regulates how to pay for medical services.”