Health care law segment ruled unconstitutional; Arkansas to move forward

U.S. District Court Judge Henry Hudson ruled Monday (Dec. 13) that a portion of the new health care law is unconstitutional in that it “exceeds” the power of Congress to require Americans to purchase a product.

As expected, the ruling was seen by conservatives as a major blow against the law, with supporters of the health care law saying many aspects of the law have been or will eventually be upheld.

Arkansas Insurance Commissioner Jay Bradford, an appointee of Gov. Mike Beebe, said Hudson’s ruling will not prevent Arkansas from moving forward with plans to implement the new federal law.

“It is certainly in the best interest of Arkansans for us to go forward with implementing the plan giving notice that it can change. The courts can change it obviously, it’s probably going to go to the Supreme Court. And the United States Congress can change this. So we’re just going to play the hand that’s been dealt to us now,” Bradford said in an interview with Roby Brock of Talk Business. (See the complete Bradford Q&A at the end of this story.)

Approved in March, the Patient Protection and Affordable Care Act will expand access to health insurance, reform the health insurance market to provide additional consumer protections, and improve the health care delivery system to reduce costs and produce better outcomes. The Congressional Budget Office (CBO) estimates that the coverage provisions in the bill will cost $848 billion over 10 years (fiscal years 2010-2019). However, the major provisions in the bill would not take effect until Jan. 1, 2014, meaning the bill uses 10 years of revenue to pay for six years of coverage. Also, the uninsured with a pre-existing condition can get insurance and will allow retirees maintain coverage.

However, Hudson said the provision of the bill mandating that Americans buy into the new plan is unconstitutional.

“The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. 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 his opinion.

Continuing, he noted: “On careful review, this Court must conclude that Section 1501 of the Patient Protection and Affordable Care Act — specifically the Minimum Essential Coverage Provision — exceeds constitutional boundaries of congressional power.”

The White House said it not yet sure if it will appeal Hudson’s ruling, but is confident the overall law will survive legal scrutiny.

“We disagree with the ruling issued today in Virginia and the Department of Justice is considering its appeal options. We are pleased that Judge Hudson agrees that implementation of the law will continue uninterrupted,” according to The White House statement. “There have been many rulings on court cases regarding health reform and we know there will be many more. In the end, the Affordable Care Act will prevail and the American people will enjoy the benefits of reform.”

As a sign the Arkansas Insurance Department is moving forward, the department announced Monday that Cynthia Crone has been hired to help with development of an health insurance exchange to be in place by 2014. A federal grant will help fund Crone, a former instructor in Health Policy and Management at the University of Arkansas for Medical Sciences, and her planning efforts.

“The Patient Protection and Affordable Care Act, which was signed into law in March of 2010, provides for Exchanges, where consumers can compare benefits and purchase health insurance, to be available by January 1, 2014. The grant which Arkansas received will provide the necessary resources to determine how a Health Insurance Exchange can best serve Arkansas insurance consumers,” the Arkansas Insurance Department noted in the Crone announcement.

Q&A WITH JAY BRADFORD, Arkansas Insurance Commissioner
Q: Does today’s ruling change your line of thought on moving forward with health care reform at the state level?

Bradford: It is certainly in the best interest of Arkansans for us to go forward with implementing the plan giving notice that it can change.  The courts can change it obviously, it’s probably going to go to the Supreme Court. And the United States Congress can change this. So we’re just going to play the hand that’s been dealt to us now.

The bottom line is two-fold. Number one, we feel like if there’s going to be a new health plan implemented, better done at the state level than at the federal level. It’s better for Arkansans. Number two, the Governor has given me strict instructions not to involve state general revenue in this endeavor. So that’s my marching orders and we’re going to do our best to follow that plan.

We’re going to just take it a day at a time. We’ve got to have, during this session, because the federal rules and regulations are just now being promulgated and it’s a work in progress. So what I’ll have to ask the legislature to do is to give the department commissioner a lot of rules and reg making authority with legislative review so we can adapt to the federal changes. Probably 70% of the federal rules have not been promulgated yet.

Q: There will obviously be a state legislative push to repeal, defund, undo federal health care reform. What’s your take on that effort?

Bradford: Basically, my gut feeling is, there’s not any legal way for us to override those federal acts; however, I’m going to leave that fine interpretation to the courts. As far as making a stand against that, I doubt that I would because it’s in the federal courts. They’re going to be the final determination on where we’re going to go on that. If the legislature wants to pass that act, it’s certainly their prerogative.

Q: Do you have any additional advice for those who are up in arms — positively or negatively — with today’s court ruling?

The impact will not be until 2014 and it is, as I’ve said, it will be addressed over and over again by the federal legislature and the courts. I don’t think anybody should get too upset about what we’ve got now because it’s probably going to change.