All Eyes on Florida as Federal Lawsuit Against Health Care Reform Opens

Florida AG Bill McCollum

TALLAHASSEE – Opening arguments began yesterday in the federal lawsuit filed by Florida AG Bill McCollum and 19 other states, challenging the constitutionality of President Obama’s health care reforms. At the heart of the argument, is whether it is constitutional for the government to require citizens to buy health insurance.

A federal judge in Virginia on Monday ruled in a separate, but similar case, that it did violate the constitution, while a comparable case was recently dismissed in California and another is awaiting trial in Missouri. Regardless of the outcomes, all of the cases will continue through the appeal process and could finally reach the Supreme Court, though it would likely be a year before that happens.

In addition to the 20 states, a host policy groups, activists, and individuals have filed briefs now numbering in the hundreds, with the majority being on behalf of the reforms. Many proponents argue that requiring those who can afford insurance to do so is the only way to offset the costs of requiring insurance companies to accept customers who have expensive pre-existing conditions.

Another element of McCollum’s suit is the argument that the reforms also infringe on state powers by requiring expansions in Medicaid programs that the state must pay for. In Florida, a family of three earning more than $9,704 per year does not qualify for Medicaid. The new federal law would push that ceiling to $24,352, while also opening up Medicaid to childless couples and low-income singles.

The state’s Medicaid costs had initially been estimated to increase by $2 billion after the changes. However, a depressed economy has added even more recipients to the rolls than predicted and rising health care delivery costs have compounded the cost increases. Last Friday, the state’s Social Service Estimating Conference gathered in Orlando and analysts predicted that cost increases would be at least $300 million higher than that initial estimate. That would boost Medicaid costs to nearly $22 billion, or around 30 percent of the state’s total budget of a little over $70 billion, which is predicted to face a shortfall of some $3 billion next year.
 
The growing class of unemployed, underemployed and low-income Americans in the 18-29 demographic that is uninsured (estimated at over 20 million) is of growing concern. Because this class is statistically the healthiest, insurers would love to add them to their risk pools to offset costs. However, because medical costs tend to be less of a concern than other expenses such as student loan repayment, newborn children and first-time home purchases, even the above-median earners in this group are more likely not to choose to pay for coverage.

Because they also statistically earn less and have accumulated much lower savings in their shorter career spans, there are also a disproportionate number of people in this group who cannot afford insurance even if it is offered through their employer, further compounding the effect. Most analysts believe that somehow forcing this demographic into the pool through requirements and a clearinghouse to assure affordable coverage is the only way to expand coverage to more of the costly demographics in a private insurer system.

State Rep. Rick Kriseman (D-St. Petersburg), the policy chair of the Florida House Democratic Caucus, said in a statement after the opening arguments, ”It remains a severe disappointment that the Office of Attorney General of Florida, with the support of Republican legislative leadership, continues to waste taxpayer dollars advancing a partisan political agenda with a lawsuit that, on thin legal ground, threatens to unravel historic advancements in health care for all Americans.

”Rather than attempting to squelch the rights of citizens to obtain quality medical care, Florida’s elected leaders should embrace their responsibility to implement the Patient Protection and Affordable Care Act. I am confident that full deployment of the act will not only improve the lives of all Floridians but also will prove to be a needed boost to our economy. Like many Floridians, I am hopeful that the courts will recognize that the new health law and its individual mandate to purchase health insurance lies well within the authority of Congress to regulate health insurance companies.“