December 1, 2010 / 12:03 AM / 9 years ago

Judge tosses challenge to Obama healthcare law

WASHINGTON (Reuters) - A federal judge in Virginia on Tuesday dismissed a lawsuit challenging the landmark healthcare law championed by President Barack Obama, upholding key provisions that require health insurance coverage.

The challenge, one of several attempting to strike down the law passed earlier this year, was brought by the conservative Christian Liberty University and individuals who said the law would violate several parts of the U.S. Constitution.

U.S. District Judge Norman Moon ruled that the law requiring individuals to buy health insurance coverage as well as requiring employers to buy coverage for their employees was legal under the Commerce Clause of the U.S. Constitution.

Moon found that without the coverage requirements in the law, the cost of health insurance would increase because the number of insured individuals would decline, “precisely the harms that Congress sought to address with the Act’s regulatory measures.”

Further, interstate commerce would be hurt by large employers failing to offer adequate healthcare coverage, thus “the employer coverage provision is a lawful exercise of Congress’ Commerce Clause power,” said Moon, who was appointed by then-Democratic President Bill Clinton.

A lawyer for Liberty University, which was founded by conservative evangelical Jerry Falwell, said they will appeal to the U.S. Court of Appeals for the Fourth Circuit and argued the law would be found unconstitutional.

“Congress does not have the authority to force every American to purchase a particular kind of health insurance product,” said Mathew Staver, who is dean of Liberty’s School of Law and runs Liberty Counsel, which represented the plaintiffs in the challenge.

ONE OF MANY CHALLENGES

The lawsuit is one of many challenging the healthcare law. The state of Virginia has filed its own challenge and 20 other states have sued to strike down the law in a federal court in Florida. Rulings are expected in the coming weeks and months.

Many of the challenges center on whether the federal government can regulate whether or not someone fails to buy a good or service under the Commerce Clause and whether the fines are a tax.

Even though Obama has said previously that the penalties would not function as a tax, the federal government has argued in court that they are and it is entitled to levy them. Opponents counter that they are punitive fines which the government is not entitled to impose.

Judge Moon characterized the fines as “penalties” rather than a tax, noting that they are not designed to raise revenue but merely to “enforce the requirement that individuals and employers purchase or provide health insurance.”

Further, opponents of the law have argued that it illegally permits federal funding for abortion but Moon said “they fail to allege how any payments required under the Act, whether fines, fees, taxes, or the cost of the policy, would be used to fund abortion.”

He also said that the law has several safeguards to prevent that from occurring.

The Obama administration welcomed the decision, the second major ruling backing the law. A federal judge in Michigan last month upheld provisions requiring Americans to buy health insurance coverage.

“The judge’s ruling today only underscores the importance of the law’s individual responsibility provision,” Stephanie Cutter, a White House adviser, said in a blog post. “In order to make health care affordable and available for all, the Act regulates how to pay for medical services.”

Additional reporting by Lisa Lambert, editing by Cynthia Osterman and Todd Eastham

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