Federal Judge Lets Virginia Challenge to Obama Healthcare Law Proceed

A U.S. judge Monday refused to dismiss a challenge by the state of Virginia to President Barack Obama’s landmark healthcare reform law, a setback that will force his administration to mount a lengthy legal defense.

In the opening salvo of the legal fight, U.S. District Judge Henry Hudson allowed Virginia to go forward with its suit, which argues the requirement that its residents have health insurance was unconstitutional.

Hudson, who noted that his ruling was an initial step, decided the law was ripe for review and that the issues the state raised had not been fully tested in court.

“While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce,” Hudson said, referring to the healthcare purchase requirement.

The new law is a major cornerstone of Obama’s domestic agenda and administration officials have vigorously defended it as constitutional and necessary to stem huge increases in costs for healthcare.

Virginia’s lawsuit is one of several trying to undo the law aimed at overhauling the $2.5 trillion healthcare system.

The fight over the healthcare law is expected to be a major theme leading up to the November mid-term congressional elections. Republicans have advocated repealing the measure, forcing the White House and Democrats to defend it.

The law is aimed at providing healthcare coverage for many of the 45 million Americans without insurance as part of the bid to lower costs and includes tax credits aimed at helping those who cannot afford to buy coverage.

The Justice Department, arguing on behalf of the Obama administration, has said the suit should be dismissed because Virginia lacks standing to challenge the healthcare law. Instead, a person having to pay a fine for not having health insurance as required by the new law would have to sue.

Virginia has countered that the healthcare law would represent the first time the U.S. government forces its citizens to buy something.

With the rejection of the Obama administration’s effort to dismiss the case, arguments now will be set to hear the merits of the arguments.

Regardless, other lawsuits will proceed, including one filed in Florida by more than a dozen states. Arguments over the Obama administration’s motion to dismiss that case are set for September.

Legal analysts say there is a good possibility one of these cases will reach the highest court in the country, but most say there is only a slim chance that the Supreme Court will rule in the states’ favor.

(Additional reporting by Lisa Lambert and Lisa Richwine; Editing by Bill Trott)

Copyright 2010 Reuters

Read more: http://www.insurancejournal.com/news/national/2010/08/02/112091.htm#ixzz0vf7nndhp

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