Obama Lawyers Appeal to U.S. High Court on Health-Care Law

President Barack Obama’s administration asked the U.S. Supreme Court to review last year’s landmark health-care law, a move that may lead to a ruling months before the 2012 presidential election.

Calling the issue “a matter of grave national importance,” administration lawyers today appealed a lower court ruling that declared part of the law unconstitutional. Earlier in the day, 26 states filed their own appeal, saying the lower court should have gone further and voided the whole statute, which was championed by Obama.

The lower court ruling “is fundamentally flawed and denies Congress the broad deference it is due in enacting laws to address the nation’s most pressing economic problems and set tax policy,” U.S. Solicitor General Donald Verrilli argued in the administration’s appeal.

The Supreme Court usually agrees to hear appeals when both sides in a dispute seek a hearing, particularly when the federal government is one of the litigants. The justices often take cases when federal appeals courts are divided on an issue, as they are over the health-care law.

“The Supreme Court now effectively has to take the case,” said Gregory Katsas, a lawyer who filed a third appeal today, on behalf of the National Federation of Independent Business, a small-business trade group in Nashville, Tennessee, seeking to invalidate the law.

Expanding Coverage

A decision is likely to come in late June, at the end of the nine-month term that starts next week, and just as the presidential campaign will become focused on the two party nominees who will face each other in the November election.

All eight Republicans seeking the party’s presidential nomination favor repealing the health-care law. The two candidates leading in the polls, Texas Governor Rick Perry and former Massachusetts Governor Mitt Romney, each vowed at a Sept. 12 Republican debate to block the law’s implementation without waiting for Congress to repeal it.

The health law would expand coverage to an estimated 32 million Americans who lack insurance, largely through an expansion of the federal-state Medicaid program for the poor and by setting up “exchanges,” in which consumers will be able to buy insurance.

The Atlanta-based appeals court ruled in August that Congress lacked the constitutional power to pass a provision that requires people to either get insurance or pay a penalty. The government’s appeal contends that Congress enacted that mandate under its authority to regulate interstate commerce and to impose taxes.

Mandate is ‘Integral’

The mandate “is an integral part of a comprehensive regulatory scheme that the commerce power plainly authorizes Congress to enact,” Verrilli argued.

The states’ appeal focuses on different aspects of the lower court ruling. The appeals court said it would strike down only the insurance mandate, leaving intact other provisions, including a requirement that insurers accept applicants with pre-existing conditions.

There is “compelling evidence that Congress intended the mandate to function as the act’s essential lynchpin and would never have passed the act without it,” said the states’ lead lawyer, former U.S. Solicitor General Paul Clement.

The states are also asking the high court to scrutinize the law’s Medicaid expansion, which the appeals court upheld. The states contend that the provision improperly threatens states with the loss of all federal Medicaid funding if they don’t expand coverage.

Another Challenge

The law “passes the point at which pressure turns into compulsion and achieves forbidden direct regulation of the states,” Clement argued.

A different federal appeals court upheld the law in a separate case, and a Michigan public interest law firm is already appealing that ruling to the Supreme Court.

The states asked the high court to move quickly to review the Affordable Care Act, as the law is known.

“Time is of the essence,” Clement argued. “States need to know whether they must adapt their policies to deal with the brave new world ushered in by the ACA.”

The Justice Department in a statement predicted the court would uphold the law.

“Throughout history, there have been similar challenges to other landmark legislation such as the Social Security Act, the Civil Rights Act and the Voting Rights Act, and all of those challenges failed,” the Justice Department said. It said challenges to the health-care law “will also ultimately fail.”

The federal government’s appeal is U.S. Department of Health and Human Services v. Florida, 11-398. The states’ case is Florida v. U.S. Department of Health and Human Services.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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