Health law challenge passes legal hurdle

Virginia Attorney General Ken Cuccinelli claims in the lawsuit that Congress doesn’t have the authority to require citizens to buy health insurance or pay a penalty.

US District Judge Henry Hudson’s ruling denied the Justice Department’s attempt to have the lawsuit dismissed, saying further hearings are needed to weigh the merits of the case. An Oct. 18 hearing had previously been set.

“Unquestionably, this regulation radically changes the landscape of health insurance coverage in America,’’ Hudson wrote in his 32-page decision.

The Virginia General Assembly passed legislation this year exempting state residents from the federal coverage mandate. Hudson wrote that the attorney general has a right to defend that state law.

Cuccinelli announced in March that he would challenge the national law. More than a dozen other state attorneys general have filed a separate challenge in Florida, but Virginia’s lawsuit is the first to go before a judge.

Hudson said Virginia’s case raises several complex constitutional issues — mainly whether Congress has the right under the Constitution’s commerce clause to regulate and tax a person’s decision not to participate in interstate commerce.

The health care law aims to ensure coverage for all, requiring most US residents to carry health insurance starting in 2014.

Insurers would not be able to refuse insurance for sick people under the law, which also expands Medicaid to help the poor. It also provides tax credits to help middle-class residents pay premiums. People facing financial hardship would be exempt from the coverage requirement. However, people who can afford insurance but refuse to sign up would face a tax penalty.

Health and Human Services Secretary Kathleen Sebelius told reporters during a teleconference yesterday that Hudson’s decision is a procedural step that clears the way for a hearing.

“We remain confident that the case is solid and there is full constitutional backing for the passing of the Affordable Care Act,’’ she said.

Stephanie Cutter, a veteran political operative tapped by Obama to guide efforts to explain the law’s benefits, wrote in a White House blog post that the government expects to prevail.

“We do not leave people to die at the emergency room door — whether they have insurance or not,’’ she wrote.

Governor Bob McDonnell, a Republican and former Virginia attorney general who enthusiastically supported the lawsuit, praised the ruling. “The requirement that all Americans must purchase health insurance or face a penalty is not permitted under the commerce clause of the United States Constitution,’’ McDonnell said.

Cuccinelli said during a news conference he hopes the courts will ultimately rule that the federal government exceeded its powers.

“We’ve won this round,’’ he said. “We recognize there are plenty of rounds left to go.’’

Shortly after he took office in January, McDonnell signed into law the legislation intended to block the requirement that individuals buy health insurance. It was the first such legislation in the nation to take effect as a state law.

The state has argued that refusing to buy something is commercial “inactivity,’’ not activity that can be regulated.

Federal prosecutors have argued that the relevant commercial activity is the purchase of health care services, not insurance. They said uninsured Americans are shifting $43 billion a year in health costs to others, and that is the problem the coverage provision seeks to correct.