Small-Business Lobby Joins Florida Health-Care Suit

    May 14 (Bloomberg) -- The National Federation of Independent Business, a small-business lobbying group, joined Florida’s legal challenge to the health-care reform law passed in March, becoming the first private organization seeking to overturn the measure.

The group’s filing today came as the end-of-week deadline approached for amending the complaint initially brought by Florida Attorney General Bill McCollum. The lawsuit’s plaintiffs now include 20 states.

The states claim the legislation places an unconstitutional burden on their budgets by expanding Medicaid, the federal-state program that provides health care for the poor. Virginia sued separately in March, contending that a requirement that people buy health insurance exceeds Congress’s powers.

The legislation “could force some small businesses to close,” Karen Harned, executive director of the organization’s Washington legal center, said today in a press conference in Tampa, Florida. The organization warned that new mandates, rules and taxes would hurt earnings and keep small businesses from creating new jobs.

Joining Florida in a suit filed in Pensacola were Alabama, Colorado, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington. The suit was amended to include Alaska, Arizona, Georgia, Indiana, Mississippi, Nevada and South Dakota.

Both the Florida and Virginia lawsuits ask the courts to declare the legislation unconstitutional.

The Justice Department has said it would vigorously defend the constitutionality of the law.

Medicaid Extension

The health-care overhaul will extend Medicaid coverage to 16 million more Americans, according to the nonpartisan Congressional Budget Office. The legislation will cost the states billions of dollars to administer, the attorneys general claim.

The attorneys general opposing the health law claim it infringes on states’ sovereignty and violates the Constitution’s 10th Amendment, which says powers not granted to the national government are reserved by the states.

“Such an unprecedented claim of power, if allowed to stand, will fundamentally change the relationship between the people of the United States and their government,” said Randy Barnett, a constitutional law professor at Georgetown University.

Dan Gelber, the Democratic candidate for Florida’s attorney general, said the lawsuit is nothing more than a “shameful campaign prop” for McCollum’s gubernatorial campaign. “Floridians have more pressing matters on their minds,” he said.

The case is State of Florida v. U.S. Department of Health and Human Services, 10-cv-00091, U.S. District Court, Northern District of Florida (Pensacola).

To contact the reporter on this story: William McQuillen in Washington at bmcquillen@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.