Key healthcare provision voided by federal judge

Declaring a core part of the new healthcare law unconstitutional, a federal judge in Virginia has launched President Obama’s signature domestic achievement into a gantlet of conservative-leaning courts that will almost certainly conclude at the Supreme Court just as the 2012 election is cresting.

In the first such decision since Obama signed the law in March, U.S. District Judge Henry Hudson ruled Monday that Congress had overstepped its power in requiring Americans to get health insurance by 2014.

The Obama administration is expected to appeal the decision.

“It is acknowledged by all that we expect this case to end in the Supreme Court,” Virginia Atty. Gen. Ken Cuccinelli, a conservative Republican who brought the case, said after Hudson issued his ruling.

Hudson denied a request to throw out the mandate while higher courts consider the case.

Legal experts are divided on whether the Supreme Court is likely to void the law.

The justices, including its conservatives, have repeatedly said that elected lawmakers, not judges, should set national policy. But the court’s conservative majority has also shown itself willing to set aside precedent and strike down laws in politically charged cases.

The legal attack on the mandate is a key element of the conservative strategy to derail Obama’s healthcare overhaul, which depends on adding an estimated 30 million more Americans to insurance rolls.

The much-anticipated decision by Hudson added new fuel to the gathering Republican drive. Even in the courts, the partisan nature of the debate is apparent: Two other federal district judges, both Democratic appointees, had previously ruled that the insurance mandate was constitutional. Hudson is an appointee of President George W. Bush and, according to financial disclosure records, has received dividends from Campaign Solutions, a political consulting firm with strong Republican ties.

The unprecedented insurance mandate will require most Americans to get health insurance starting in 2014 and penalize those who do not.

The requirement was designed to spread risk more broadly and control insurance premiums for everyone, enabling the federal government to prohibit insurers from denying coverage to patients with preexisting medical conditions. Without a mandate, Americans would be able to avoid buying insurance until they got sick, driving up premiums, a phenomenon that has occurred in several states that have guaranteed coverage without any requirement.

Most defenders of the law think that eliminating the mandate would undo the healthcare overhaul.

“Unfortunately, striking the ‘individual responsibility’ provision could also jeopardize the most popular insurance reform in the statute: preventing insurance companies from denying health coverage to people with preexisting health conditions,” said Families USA Executive Director Ron Pollack, a leading consumer advocate.

“If we’re going to outlaw discrimination based on preexisting conditions, the only way to keep people from gaming the system and raising costs on everyone else is to ensure that everyone takes responsibility for their own health insurance,” said Stephanie Cutter, assistant to the president for special projects, in a blog post Monday.

Obama administration lawyers argued in the Virginia case that the mandate was permissible under Congress’ authority to regulate commerce, which gives the federal government broad powers to regulate economic activity.

But Hudson, backing conservative critics of the law, concluded that the overhaul overstepped this authority by requiring Americans to obtain a specific product.

“Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause power to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” the judge concluded.

He added: “Despite the laudable intentions of Congress in enacting a comprehensive and transformative healthcare regime, the legislative process must still operate within constitutional bounds.”

Cuccinelli predicted Monday that the U.S. 4th Circuit Court of Appeals in Richmond, Va. — the likely next stop for the case — would take a year to review the Obama administration’s appeal before the high court received the case in 2012. The justices would then take another year to consider the case, he said.

The 4th Circuit was the Bush administration’s favorite forum for war-on-terrorism cases because it had been dominated by conservative judges, though the balance of the court has shifted slightly with the retirement of several conservatives.

Also weighing in soon may be the U.S. 11th Circuit Court of Appeals in Atlanta, another conservative court that is expected to hear a challenge to the healthcare overhaul being pursued by Florida Atty. Gen. Bill McCollum.

That case, which is scheduled for a hearing before a federal judge in Pensacola, Fla., this week, has been joined by attorneys general and governors from 19 other states. All but one are Republican.

Leading Republican lawmakers almost uniformly applauded the Virginia decision. Incoming House Majority Leader Eric Cantor (R-Va.) called on the Obama administration and Cuccinelli to request that the case be sent directly to the Supreme Court, an unusual scenario. Incoming House Speaker John A. Boehner (R-Ohio) called the ruling “an encouraging sign for families and small-business owners who have revolted against President Obama’s job-killing healthcare law.”

Liberal legal scholars have vehemently challenged Hudson’s interpretation, arguing that the Commerce Clause allows Congress to regulate economic decisions, such as whether or not to buy health insurance.

“What Judge Hudson has done is effectively rewritten the Commerce Clause,” said Tim Jost, a professor at Washington and Lee University School of Law in Virginia.

Underscoring the politically charged nature of the case, Cuccinelli within hours of the ruling posted an ad on the conservative Drudge Report website seeking donations to his campaign committee, with the solicitation: “Cuccinelli succeeded in overturning the individual mandate. Join the winning team.”

noam.levey@latimes.com

david.savage@latimes.com