Small business lobby to go to court on health law

By RICARDO ALONSO-ZALDIVAR Associated Press Writer

WASHINGTON (AP) - Attorneys general and governors for 20 states won't be alone in their legal challenge to President Barack Obama's health care overhaul.

The nation's most influential small business lobby is going to court with them.

The National Federation of Independent Business will join the argument that Americans cannot be required under the Constitution to obtain insurance coverage, the groups president, Dan Danner, said in an interview. The group plans to announce Friday it's joining the suit.

Regardless of whether the constitutional argument sways federal judges hearing the case, NFIB'S involvement ensures the point will be heard extensively during the fall political campaigns. All but one of the state officials who have filed the case in Florida are Republicans, and with 350,000 members the NFIB boasts a far-reaching network of local activists.

Florida Attorney General Bill McCollum, a leader of the legal challenge and a GOP candidate for governor, said he has "received a lot of strong response and reaction in support when I have spoken of this subject. I think voters as a whole are concerned."

A groundswell of opposition to the law from small business owners prompted NFIB's decision to join the court challenge, said Karen Harned, a senior lawyer for the group. "The second the law was signed, NFIB was hearing from its members: 'What are you all going to do about this?'," said Harned. "So we hunkered down. We looked around. This state attorneys general lawsuit made the most sense for us. It's the only one that has a national presence."

The health care law, passed by a Congress divided on partisan lines, puts the nation on a path to coverage for all. One of its pillars is the requirement that most Americans carry health insurance - through an employer, a government program, or by buying their own policy.

The mandate is effective in 2014, when new competitive insurance markets open for business. Insurers will then be required to take all applicants, no longer allowed to turn away those in poor health. The government will offer tax credits to help middle-class households pay premiums. And Medicaid will be expanded to cover millions more low-income people.

Individuals who refuse to get health insurance will be hit with a tax penalty, although exceptions are allowed for financial hardship and religious reasons. Businesses will also be required to contribute to the cost of their workers' health insurance, but companies with fewer than 50 employees are exempt.

The Obama administration argues that the coverage requirements rest on a solid constitutional foundation: the power of Congress to regulate interstate commerce.

But critics say that does not give government the right to direct individuals to purchase a specific good or service.

The new law allows government "to regulate you just because you exist," said Danner. "If you can regulate this, where do you stop? Do you tell people, 'We are going to mandate that everybody exercise?' We think this is an overreach by the government. It goes too far, and threatens individual freedom."

The administration counters that a decision to opt out of health insurance is not merely a matter of personal choice. It has consequences for others, since uninsured people will get sick, or have accidents, and someone must pay for their care if they can't afford it.

"Individual decisions to forgo insurance coverage, in the aggregate, substantially affect interstate commerce by shifting costs to health care providers and the public," Justice Department said this week in legal papers filed in a similar lawsuit in Michigan.

People who remain uninsured by choice "have not opted out of health care; they are not passive bystanders divorced from the health care market," the government continued. "They have made a choice regarding the method of payment for the services they expect to receive, no less 'active' than a decision to pay by credit card rather than by check."

Legal scholars are divided over prospects for the case. Many - but not all - expect the administration to prevail.

Timothy Jost, a professor at Washington and Lee University law school in Virginia, said:

"These are not really legal cases - they are political statements."

2010-05-14 11:26:51 GMT