Obama Administration Appeals Virginia Judge's Health Care Ruling

(Reuters)

RICHMOND, Va. -- President Obama's administration said in court papers Monday that a federal judge in Virginia erred in striking down the centerpiece of its health care reform law.

The administration urged the 4th U.S. Circuit Court of Appeals to reverse the judge's ruling, arguing in a 62-page opening brief that the law's requirement that citizens buy health insurance or pay a penalty starting in 2014 is allowable under the Commerce Clause, a constitutional provision giving Congress power to regulate interstate commerce.

"As Congress found, the means of payment for services in the interstate health care market is economic activity that substantially affects interstate commerce," the Justice Department wrote. "The requirement that participants in the health care market have insurance to pay for the services they consume is thus a quintessential exercise of the commerce power."

Virginia Attorney General Ken Cuccinelli, who challenged the provision, had no immediate comment. His office is expected to file a brief in response within in a month, and a three-judge panel of the appeals court is scheduled to hear oral arguments in May.

Both sides agree that the U.S. Supreme Court will have the final word on the health care reform law. Cuccinelli has filed a petition seeking to leapfrog the appeals court, but the Justice Department opposes that idea and the Supreme Court has not yet ruled.

Virginia's lawsuit is one of several challenging the law, and results have been mixed. In the most prominent case, a judge in Florida sided with 26 states that challenged the law's constitutionality but went a step further than Hudson and struck down the entire statute -- not just the insurance mandate provision.

In his Dec. 13 ruling, Hudson said no court had expanded the Commerce Clause to allow the government to regulate a person's decision not to buy a product.

"At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage -- it's about an individual's right to choose to participate," Hudson wrote.

In filing a separate lawsuit rather than joining the Florida case, Cuccinelli said he was defending a new state law that prohibits the government from compelling Virginia citizens to buy insurance.

The Justice Department said in its brief that Virginia cannot simply opt out of a federal law it doesn't like.

The administration also argues that the insurance provision is authorized by congressional taxing powers.