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The Scoop

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Verbatim: Indiana officially enters legal challenge to federal health care law

Statement issued Friday:

INDIANAPOLIS – Today, the State of Indiana officially joined the multistate legal challenge to the new federal health care law, Indiana Attorney General Greg Zoeller announced.

An amended complaint was filed today in U.S. District Court in Florida, adding Indiana and six other states to the original list of 13 plaintiff states who filed suit March 23.

Also joining the case are two individuals who have not and do not wish to purchase health insurance; and the National Federation of Independent Business (NFIB) on behalf of its members who oppose the federal government’s individual mandate to purchase insurance for themselves. The amended complaint raises two additional counts – beyond the original four – that question the constitutionality of the federal health care law that Congress passed March 21. Zoeller announced March 29 that he would participate in the multistate challenge to the new law.

“There is much public debate on whether the new federal health care law is good public policy and how much it will cost states. That is not the subject of this lawsuit. My only concern is whether the federal government has the authority it claims under the United States Constitution, a question rightly brought before the courts. The people of Indiana did not elect me to simply trust the federal government,” Zoeller said.

Zoeller noted Hoosier taxpayers have not had to pay any outside legal fees or additional costs for Indiana to join the multistate lawsuit. Legal research that Zoeller and Indiana Solicitor General Thomas M. Fisher have conducted on the case was within the existing agency budget of the Attorney General’s Office. Florida had proposed that the 20 states joining the case split the $50,000 legal fee among all joining parties, but Zoeller declines to use any public funds to pay that fee.

“The legal research and analysis we already put into the health care legislation at the request of Senator Lugar in January is worth more than the contribution amount to the multistate group’s effort,” Zoeller said. When the health care bill still was before the Senate, Lugar triggered Indiana’s one-of-a-kind state statute that allows the state Attorney General to review federal legislation pending in Congress and report back to the senator. Zoeller’s 55-page report to Lugar on February 5 identified constitutional concerns with the legislation – some of which have now been cited in the multistate legal challenge.

“I am sensitive to the plight of uninsured Hoosiers who struggle to afford health care. But the only way to determine with finality whether this new federal health care plan is constitutional is by bringing a legal challenge that ultimately can reach the United States Supreme Court,” Zoeller said. “The fact that 20 states and the National Federation of Independent Business now have joined the challenge underscores the profound constitutional questions with this law that only the Supreme Court can answer.”

The amended complaint challenges the constitutionality of the Patient Protection and Affordable Care Act and seeks a declaratory judgment. The allegations in the six counts are as follows:

Counts 1 and 2: The individual mandate that all Americans must buy a health insurance product whether they wish to or not -- or face a financial penalty of up to $695 per year -- is unconstitutional, the suit alleges. Never before has the federal government regulated inactivity, nor has it required individuals to buy a health insurance product as a condition of being alive and residing in the U.S.

Count 3: Penalizing those who violate the mandate by requiring them to pay a financial penalty is an unconstitutional direct tax, levied against the individual rather than on income. The Constitution prohibits a direct tax or “capitation” tax on the individual unless it is apportioned among the states according to Census data, which did not occur with the new health care law.

Counts 4 and 5: The new law unconstitutionally coerces and commandeers the machinery of state government by forcing fundamental changes in the nature and scope of the state-federal Medicaid program, the suit alleges. Indiana would have to expand the number of patients eligible for Medicaid by an estimated 522,000 people; and the total cost to the state of implementing the federal health care law would be $3.6 billion over 10 years, according to the Indiana Family and Social Services Administration’s actuary. Also, until now insurance has been regulated at the state level. The new law infringes upon the ability of Indiana and other states to regulate insurance by forcing them to set up insurance exchanges; if they don’t, the federal government will.

Count 6: The new law unconstitutionally interferes with the sovereignty of states by requiring state governments -- as large employers -- to automatically enroll all their employees working 30 hours or more per week into health insurance plans, despite local preferences, past policy or costs, the suit alleges.

New to the complaint are Counts 3 and 6 that were filed today, the federal court’s deadline for additional states to join and raise additional claims. Also new to the complaint are additional plaintiffs: NFIB and two individuals who do not currently have health insurance and do not desire to purchase it. They are:

Mary Brown, a self-employed owner of an auto-repair business in Panama City, Fla., who has not had health insurance for four years, devoting her resources to maintaining her business and paying her employees. She is a member of co-plaintiff NFIB.

Kaj Ahlburg of Washington state who has not had health insurance for more than six years and has no intention of obtaining any. Ahlburg plans to remain financially able to pay for his own healthcare as needed.

Both Brown and Ahlburg are ineligible for Medicare or Medicaid, and both object to being forced to comply with the individual mandate, according to the Florida Attorney General’s Office.

“Small business owners everywhere are rightfully concerned that the unconstitutional new mandates, countless rules and new taxes in the health care law will devastate their business and their ability to create jobs. They are also concerned about their personal freedoms,” said NFIB president and CEO Dan Danner. “This law is the first time the federal government has required individuals to purchase something simply because they are alive. If Congress can regulate this type of inactivity, then there are essentially no limits to what they can mandate individuals to do,” Danner said.

Zoeller cited the participation of the National Federation of Independent Business and the two citizens who choose not to have health insurance as strong evidence that Indiana’s objections to a federal mandate to buy health insurance are rooted in legitimate constitutional concerns, not political partisanship.

“As Attorney General, I do not get to vote ‘yes’ or ‘no’ on this or any legislation. My job instead is to represent the sovereign legal interests of the State of Indiana in court. There are constitutional limits on the federal government’s role, particularly when it infringes upon the state’s ability to pass and enforce its own state laws,” Zoeller said. “While I respect the views of those who believe Indiana should pursue a different strategy, the decision to join this lawsuit is solely up to the Attorney General. The multistate challenge in Florida offers the most efficient and cost-effective means for Indiana to raise these issues to the U.S. Supreme Court before the individual mandate can take effect in 2014,” Zoeller added.

A September 14 hearing date already is scheduled in the legal challenge in the U.S. District Court for the Northern District of Florida.

The original legal challenge was filed March 23 by Florida, South Carolina, Nebraska, Texas, Utah, Alabama, Louisiana, Michigan, Colorado, Pennsylvania, Washington, Idaho and South Dakota. The amended complaint filed by today’s federal court deadline includes Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia, Alaska, the National Federation of Independent Business, Mary Brown and Kaj Ahlburg. Named as defendants in their official capacities are U.S. Health and Human Services Secretary Kathleen Sebelius, U.S. Treasury Secretary Timothy Geithner and U.S. Labor Secretary Hilda Solis.

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