Political and Legal Challenges to Health Reform Brian Carey Foley Hoag LLP December 15, 2010

November Elections Republicans won 63 seats and control of the House (242-193) Republicans picked up 6 seats in the Senate (53-47) Democratic incumbents defeated: 49 GOP incumbents defeated: 2 Republicans picked up majority of state governors

Red Tide Sweeps The House

Senate Election Results 4

Significant GOP Governor Wins

States Governorships GOP Captured Iowa Michigan Ohio Pennsylvania Wisconsin Maine Kansas New Mexico Oklahoma Tennessee Wyoming Florida

State Legislative Results Republicans now control 57 state legislative chambers, Democrats control 39, and two are tied. (Nebraska is unicameral and nonpartisan.) GOP did not lose a single state legislative chamber this election cycle. Republicans gained over 500 seats in state legislative chambers across the country.

November Election Impact on Health Care Reform Outright repeal of ACA highly unlikely given presidential veto and Democratic majority in Senate. House Republicans likely to hold “symbolic” repeal vote and pursue targeted strategies to limit ACA implementation. House floor votes likely on unpopular portions of health reform (e.g. 1099 tax filing mandate and medical device fees). Republicans are likely to attempt to use appropriations process to prevent HHS from implementing key ACA provisions. Congressional Review Act joint resolutions. Aggressive use of House subpoena power — oversight investigations and hearings. Key GOP themes – ACA impact on employers, health care premiums and cost, health care innovation, and seniors.

“Repeal and Replace” Very good campaign rhetoric, but not political reality House of Representatives may pass legislation in 2011 repealing ACA — but Senate will not act President Obama would veto any legislation to repeal ACA Sets up the ACA as major issue for 2012 Presidential election

Rolling Back Health Reform A Coordinated Political Effort De-funding specific programs and implementation Challenging HHS regulations Drafting targeted legislative proposals to amend statutory provisions Holding House oversight hearings Engaging in Litigation

Court Challenges to Health Reform Nearly two dozen lawsuits filed to challenge individual mandate and the ACA in general 20 State Attorneys General have filed suit in Florida challenging the ACA Virginia’s Attorney General filed a separate lawsuit in the Eastern District of Virginia The primary legal question at issue is whether the Constitution permits the federal government to require citizens to purchase commercial health insurance

Court Decisions Tally 12 cases have been dismissed on procedural grounds 3 federal district court decisions on the merits Eastern District of Michigan court found ACA constitutional (currently on appeal to the Sixth Circuit, with briefs due Dec. 20) Western District of Virginia court found ACA constitutional (notice of appeal filed with Fourth Circuit) Eastern District of Virginia court found individual mandate unconstitutional

Virginia v. Sebelius On Monday, December 13, federal district court Judge Henry Hudson in the Eastern District of Virginia struck down the “individual mandate” provision of ACA. Judge Hudson stated: “At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage – it’s about an individual’s right to choose to participate.” The is decision was limited to Section 1501 [Individual Mandate] and “directly-dependent provisions” The court denied plaintiff’s request for an injunction.

ACA Litigation Timeline Northern District of Florida case will be the next major district court decision (appeal will be to the Eleventh Circuit) Fourth Circuit Court of Appeals will likely take up the split decisions in Virginia in early 2011 Supreme Court unlikely to hear case before 2011-2012 term — although Virginia plaintiffs are proposing expedited review

Significance of the Individual Mandate Individual mandate was a key provision for private insurers to offer guaranteed issue The provision has its roots in past Republican proposals GOP health care proposal in 1994 Romney plan in Massachusetts in 2005 Wyden-Bennett proposal in 2007 There are a variety of ways to restructure the mandate in the private insurance market to meet constitutional challenges

Final Thoughts Debate on health reform was a debate over the role of government The implementation of ACA will go on and so will the political challenges Any Supreme Court decision is important for fate of both the ACA and the 2012 Presidential election Deficit commission and rising health care costs make clear that these issues will be debated for years