Healthcare battle unfolds in Atlanta court

ATLANTA Wed Jun 8, 2011 5:26pm EDT

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ATLANTA (Reuters) - Lawyers for President Barack Obama sought on Wednesday to stave off the biggest legal challenge yet to healthcare reform, his signature domestic policy achievement.

The administration presented oral arguments as it appealed a ruling by a Florida judge who declared the Affordable Care Act unconstitutional, backing claims by 26 U.S. states that individuals cannot be required to buy health insurance.

The cornerstone of the law is a provision requiring Americans to buy health insurance by 2014 or face a fine. Opponents say that punishes inactivity and exceeds the authority granted to Congress by the Constitution to regulate interstate commerce.

"For 220 years, Congress never saw fit to use this particular power," former Solicitor General Paul Clement said on behalf of the states challenging the law.

Senior administration lawyer Neal Katyal argued that those who choose to go without health insurance are already making economic decisions that affect everyone.

"We are not saying the Congress can force someone to buy something. Our point is that people are already buying this good," Katyal told the three-judge panel at the 11th Circuit Court of Appeals in Atlanta.

A Virginia appeals court heard a similar case in May, but this case is more significant because of the number of states backing it.

No ruling is expected for months and legal experts expect an appeal to the Supreme Court regardless which side wins.

PRESIDENTIAL CAMPAIGN ISSUE

The law aims to increase access to healthcare and slow the growth in costs. Republicans say it will send health costs soaring and represents intrusive government power. They plan to make their campaign for repeal a pillar of efforts to defeat Obama in next year's presidential election.

The 2010 law also allows young people to remain on their parents' health insurance into their 20s and prevents insurers from denying coverage or charging higher premiums for pre-existing medical conditions.

"We can't wait for this law to take effect," said Kathy McClure, a Georgia attorney demonstrating in favor of the measure outside the court building.

She said her law firm pays $35,000 a year in health insurance premiums to cover four people, in part because her son, an employee of the firm, has diabetes.

Another key issue is whether the entire package would be void if any one part is found to be unconstitutional. In a Florida court, U.S. District Judge Roger Vinson ruled in January the whole law was invalid because its requirement to buy insurance is unconstitutional, but put the ruling on hold pending appeal.

Chief Judge Joel Dubina, Judge Frank Hull and Judge Stanley Marcus heard the appeal on Wednesday. Dubina was appointed by President George H. W. Bush, a Republican, while the other two were appointed by President Bill Clinton, a Democrat.

Outside the court building, Atlanta physician Scott Barbour was among those demonstrating against the law, which he described as "socialized medicine" that would put health care decisions in the hands of bureaucrats.

"This if the fight of our lifetime," said Barbour.

He said fostering competition among insurance companies and making it harder to sue doctors were the best ways to broaden health insurance coverage and maintain quality.

Ron Pollack, executive director of the nonprofit group Families USA, which favors the healthcare reform law, called Vinson's decision "judicial activism run amok."

"We think it's very important not to go backward," Pollack said outside the court building.

The case is State of Florida et al v. U.S. Department of Health and Human Services et al. Its number is 11-11021.

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