“In a stinging rebuke to the Obama administration, a federal judge Monday invalidated a key provision of the recently passed health care law, saying that it ‘exceeds the constitutional boundaries of congressional power.'”

“During the recent health care debate I heard many people on both sides of the debate worry out loud about passing a heath care bill that did not enjoy broad support. I guess this question is no longer a theoretical one. December will be a big month when it comes to seeing some of the fallout accruing from the very partisan passage of the Patient Protection and Affordable Care Act.”

“Striking down the Obamacare individual mandate would be a historic vindication of the rule of law. But if the courts find that the mandate is not severable from the remainder of the statute, then it could wipe clean the slate of health care reform. That would return this issue to a new Congress — and possibly a new president — to devise reform legislation that will actually improve health care costs, instead of an unprecedented invasion into the lives and liberties of American citizens.”

“Voters in Oklahoma and Arizona resoundingly supported ballot initiatives to opt-out of the federal health reform law, while Colorado voters appeared headed to rejecting a similar measure.”

“The legal battle over Obamacare is only beginning, with appeals proceeding all over the country. These cases present the fundamental questions of where government gets its powers, and what the constitutional limits to those powers are.”

Many embattled House Democrats who voted to pass ObamaCare just seven months ago no doubt wish they had listened to the American people rather than to their leadership and said “No!” to the massive health overhaul law.
If a Democrat boasts about voting Yes, it is such a rarity that it makes news. In all but a very few races, support for the law is a huge liability on the campaign trail.

Nervous Democrats are defensively asking voters to give them another chance so they can fix it and get it right this time. It would be something of an understatement to say that most voters are disinclined to do that.

There will be huge political consequences for slamming such a massive change into law – one that will directly affect virtually every American and every corner of the health sector.

Here are the top 10 reasons the health law is unraveling:

  1. State pushback: State opposition is building and will become more intense next year. About 10 states, led by Mississippi Gov. Haley Barbour, are talking about forming a unified front to oppose the law’s mandates. And up to 25 new governors will be elected on Nov. 2, most facing huge budget pressures and most with no intention of falling into line to implement a law many actively campaigned against.
  2. Voter rejection: Three states — Oklahoma, Arizona, and Colorado — have ballot initiatives before the voters in November, all repudiating the health law. Passage will give even more impetus to proponents of repeal, following the 71% vote against the law in Missouri in August.

  3. Lawsuits: There are at least 15 lawsuits against the law, and the two largest moved forward in the last week. Two federal judges have said that there is enough substance to the constitutional questions to allow the challenges to proceed. Arguments were heard in Virginia on Monday and are scheduled for December in Florida. The suits are marching toward the U.S. Supreme Court, likely in 2012-2013.

    Backers of the health law are concerned that if the individual mandate is declared unconstitutional, the court will strip out everything that wouldn’t have passed without the mandate. That would surely include insurance “reforms” but possibly hundreds of billions of dollars in insurance subsidies.

  4. Rising costs: Health insurance costs already are rising as a result of the law, and the pressures will intensify. Boeing is the latest company to tell its 90,000 employees that it plans to increase the price of employee health insurance for its non-union workforce over the next few years in response to rapidly rising insurance costs, at least partly because of the health law.
  5. Towering deficits: Gov. Philip Bredesen, Democrat of Tennessee, warned in a Wall Street Journal commentary Thursday that the health overhaul law creates strong incentives for employers to drop health coverage. This would dramatically increase the cost for taxpayers, as former Congressional Budget Office Director Doug Holtz-Eakin of American Action Forum has explained. Congress may find it is essential to ask the CBO to recalculate the actual cost of the health overhaul law to protect taxpayers from an even larger wave of red ink.
  6. Seniors hit hard: Medicare Actuary Rick Foster confirmed that the health overhaul law will result in “less generous benefits packages” for seniors on the popular Medicare Advantage program and that the coverage will cost them more. Foster estimates seniors’ costs will go up by $346 in 2011 and as much as $923 by 2017.
  7. Millions losing coverage: The Principal Group announced it plans to drop health coverage for 840,000 policyholders; millions of seniors will lose Medicare Advantage plans; child-only policies already are vanishing from the market because of HHS rules; retirees are losing supplemental coverage; and major employers such as AT&T, Caterpillar, John Deere, Verizon, and countless others are considering dropping health benefits over the mid- to long-term.
  8. Job-killing mandates: The U.S. Chamber of Commerce said that nearly eight in 10 small business leaders expect their costs to increase as a result of the new law. Many are fearful of the impact of new health insurance mandates, and the majority say they will be less likely to hire new employees and more likely to reduce current benefits.
  9. Searching for the exits: The McDonald’s waiver shows that companies have to be protected against the law to avoid its damage; dozens more waivers have been granted so a million people didn’t lose their mini-med coverage just before the election. The Wall Street Journal asked, “Wouldn’t it be better to write less destructive rules in the first place? Or why not give everyone a waiver from everything?”
  10. Reduced quality, higher costs: A Wall Street Journal poll last week found that a majority of voters believe the new law will cause them to get lower quality care, pay more in insurance premiums or taxes, or both. A plurality favors repeal, and those who know most about the law favor repeal by more than two to one.

If Republicans capture the House on November 2, expect dozens of hearings to point out the many problems we already are seeing with the law — from driving up costs, to causing millions of people to “lose the coverage they have today,” to massive new deficit spending on new entitlement programs, to budget-busting Medicaid mandates.

As Rep. Paul Ryan (R-WI) said at a briefing about the overhaul law, “This cannot stand!”

“But despite seven decades of stretching by a Supreme Court eager to accommodate every congressional whim, the Amazing Elastic Commerce Clause is still not expansive enough to cover the unprecedented command that people purchase a product from a private company in exchange for the privilege of existing.”

“And stretched to its logical conclusion, the mandate’s policy implications are absurd. As one successful political opponent of the mandate once said: ‘If a mandate was the solution, we could try that to solve homelessness by mandating everybody buy a house.’ That’s probably somewhat exaggerated, but it’s basically a fair point. And it was first made on the campaign trail by President Obama.”

This morning, Judge Henry E. Hudson of the Eastern District of Virginia presided over a summary judgment hearing for Virginia v. Sebelius. This case is the Constitutional challenge filed by Virginia Attorney General Ken Cuccinelli against ObamaCare, and shouldn’t be confused with the multi-state suit filed in Florida by over 20 Attorneys General. Both sides squared-off for just under three hours, and OCW was lucky enough to get a seat in the crowded courtroom.

Virginia’s case was argued by its Solicitor General, Duncan Getchell, Jr., who concentrated on two major arguments, both on the main theme that the individual mandate is a power grab by the federal government that is not authorized by the Constitution’s enumeration of powers. First, that the mandate is an “unprecedented’ and “unlimited” expansion of the Commerce Clause. Second, that the mandate cannot be justified as part of Congress’s taxing authority. Given the judge’s previous rulings and his questions and reactions at today’s hearing, it’s warranted to be cautiously optimistic that Judge Hudson is favorably disposed to the argument.

According to Getchell, the most unprecedented aspect of the mandate is that it regulates an economic status, not an economic activity. Previous federal precedent holds that Congress may regulate economic activities that influence interstate commerce, but there are no previous precedents which support ObamaCare’s mandate which forces people to pay a fine if they are uninsured. This argument was rebutted by Deputy Assistant US Attorney General Ian Gershegorn, who spoke on behalf of Secretary Sebelius. His position is that everyone uses health care, and the mandate forces people to buy insurance, which is just a commodity that changes the way individuals pay for their health care. Therefore, it is an activity and thus consistent with legal precedents.

On the issue of whether the mandate is a tax, the plaintiff’s argument was very strong. President Obama and other supporters of the law consistently and vigorously denied that the mandate was a tax. The law’s text itself insists that it is not a tax. When Gershegorn argued the opposite, Judge Hudson repeatedly interrupted him to ask whether ObamaCare supporters in Congress and the Administration were deliberately misleading the American people when they said the mandate wasn’t a tax. For a video of the President getting angry with George Stephanopolous about this issue, watch this interview.

The final issue was a very technical one, which involves the “severability” of the individual mandate. If the mandate is “severable,” then the law will withstand the striking down of the mandate. If not, then once one section of the bill is declared unconstitutional, then the whole law is unconstitutional. Laws typically have a severability clause, so this is not an issue, but ObamaCare was passed in such a rushed and reckless manner that it was overlooked. If the mandate is upheld, this point will be moot, but if it isn’t then this issue is crucial.

As the judge concluded the hearing, he said that he plans to make his decision by the end of the year, so keep watching the “Legal Challenges” section of ObamaCare Watch for the latest updates. For more information about this issue, visit our primer, which has material on the mandates, taxes, and legal challenges.

“In his ruling, Vinson criticized Democrats for seeking to have it both ways when it comes to defending the mandate to buy insurance. During the legislative debate, Republicans chastised the proposal as a new tax on the middle class. Obama defended the payment as a penalty and not a tax, but the Justice Department has argued that legally, it’s a tax.”