Bloomberg: U.S. Health-Care Law Requirement Thrown Out by Federal Judge in Virginia

By Tom Schoenberg and Margaret Cronin Fisk - Dec 13, 2010 11:13 AM CT

The Obama administration’s requirement that most citizens maintain minimum health coverage as part of a broad overhaul of the industry is unconstitutional because it forces people to buy insurance, a federal judge ruled, striking down the linchpin of the president’s plan.

U.S. District Judge Henry Hudson in Richmond, Virginia, said today that the requirement in President Barack Obama’s health-care legislation goes beyond Congress’s powers to regulate interstate commerce. While severing the coverage mandate, Hudson didn’t address other provisions such as expanding Medicaid that are unrelated to it. He didn't order the government to stop work on putting the remainder of the law into effect.

Hudson found the minimum essential coverage provision of the act “exceeds the constitutional boundaries of congressional power.” Hudson was appointed by President George W. Bush in 2002.

The decision left intact other provisions of the law and only affects the part that requires most U.S. citizens to maintain minimum health coverage beginning in 2014.

The ruling is the government’s first loss in a series of challenges to the law mounted in federal courts in Virginia, Michigan and Florida, where 20 states have joined an effort to have the statute thrown out. Constitutional scholars said unless Congress changes the law, its fate on appeal will probably hinge on the views of the U.S. Supreme Court’s more conservative members.

U.S. health-care stocks extended gains after the ruling. The Standard & Poor’s 500 Health Care Index rose 0.5 percent at 12 p.m. New York time. UnitedHealth Group Inc. and Coventry Health Care Inc. led gains.

Tracy Schmaler, a spokeswoman for the U.S. Department of Justice, did not immediately reply to voicemail and e-mail messages seeking comment on Hudson’s decision.

The case is Commonwealth of Virginia v. Sebelius, 10-cv- 00188, U.S. District Court, Eastern District of Virginia (Richmond).

Source: http://www.bloomberg.com/news/2010-12-13/u-s-health-care-law-requirement-thrown-out-by-judge.html