September 8, 2011 / 6:20 PM / 6 years ago

Snap analysis: What latest healthcare ruling means

WASHINGTON (Reuters) - President Barack Obama won a victory over his signature healthcare law from a U.S. appeals court on Thursday but Republican critics may only be emboldened in their efforts to undo the reforms.

The 4th U.S. Circuit Court of Appeals in Richmond ruled the state of Virginia did not have the right to sue to block the law. A lower court in Virginia had found a mandate requiring Americans to buy health insurance was unconstitutional.

Thursday’s unanimous ruling by a three-judge panel likely means attention will focus on split decisions by other appeals courts -- one in Atlanta that ruled the individual mandate was unconstitutional and one in Cincinnati that said it was legal.

With divergent court decisions over the 2010 healthcare reform law, political leaders, the health industry and states will have a harder time anticipating what the Supreme Court will decide when one of the lawsuits reaches its chamber, likely next year.

Here are some of the effects of Thursday’s decision on the current landscape:

U.S. POLITICS

The ruling is a win for the Obama administration, which has vigorously defended the individual mandate requiring Americans to buy health insurance. Democrats who were badly wounded by the healthcare law in November 2010 elections for Congress and state legislatures may find confirmation from the decision and more boldly resist moves by Republicans, who control the House of Representatives, to chip away at the law.

Still, Republican politicians vying to become their party’s presidential candidate in 2012 have turned up the rhetorical heat on the healthcare law and this decision could turn into a rallying cry against what they all describe as a costly and unnecessary government expansion. It could galvanize supporters of Michelle Bachmann and other conservatives who believe states should have more independence from the federal government.

After the ruling, conservatives noted the judges had ruled on Virginia’s standing and not on the constitutionality. Should the Supreme Court make a decision in a similar vein to the one in Cincinnati, Republicans in Congress may continue pursuing a strategy of taking the law apart piece-by-piece legislatively.

THE STATES

Virginia, which sued within hours of Obama officially signing the law, has gone on implementing the healthcare plan anyway. States are charged with carrying out the bulk of the reforms and many of those suing are still setting up state-run exchanges for health insurance and moving ahead to bring other elements on-line. They hope to exert enough control to limit the reach of the law and also have access to federal funding if the Supreme Court rules the law is valid. Along with worrying that the law usurps their rights, states are concerned they cannot afford to carry out all of the changes it requires.

HEALTHCARE

The individual mandate provides the healthcare industry with a large and steady pool of insurance purchasers. Without the mandate, insurance premiums would likely rise.

THE LAW

Last month’s ruling in Atlanta bolstered beliefs the Supreme Court will throw out the individual mandate but keep the rest of the law intact. While Thursday’s ruling may dampen the prospect of a compromise decision, it does not make it impossible.

The Virginia judges were appointed by Democratic presidents -- and two of the three were assigned by Obama. The U.S. Supreme Court leans conservative, with the chief justice having been appointed by former President George W. Bush, a Republican.

Editing by Howard Goller and John O'Callaghan

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