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Steve Chiotakis: One of the centerpieces of President Obama’s agenda, his health care reform package, now faces more obstacles. A federal judge this morning has let stand a lawsuit that was brought by the state of Virginia against a key provision of the health plan. Marketplace’s Mitchell Hartman joins us live to talk about it with the latest right now. Good morning, Mitchell.
Mitchell Hartman: Good morning, Steve.
Chiotakis: So what did the judge do here?
Hartman: Well, he hasn’t ruled on the underlying lawsuit against the Obama health plan. What he did do was to let the lawsuit by the state of Virginia proceed, and that means the Obama administration is going to have to defend it. This will be more in the news, not as a success, but as a debate over government intruding into private life.
Chiotakis: So what was Virginia’s argument here?
Hartman: Well, it’s Virginia and 21 other states that have sued in various courts. They say the federal government can’t force their state residents to buy health insurance, or in this case penalize them through the tax code if they don’t buy insurance. And that’s a provision of the health reform, that everyone has to have health insurance. There are also now referendums in a number of states launched by the Tea Party and its allies that would nullify the insurance requirement in those states. Missouri votes on one tomorrow. Basically, they all take the same tack — they say the federal Constitution doesn’t allow Congress to make Americans buy something, whether that’s a new toaster or health insurance.
Chiotakis: And what’s the counter-argument, Mitchell?
Hartman: Well, the Obama administration and supporters of health care reform say the government already requires people to purchase things. I mean, take as an example, car insurance. And they say that the lawsuits are just obstructionist, ultimately predict that they won’t succeed. They say the feds already have broad powers over health care, I mean they regulate Medicare, Medicaid, all sorts of things — and that this is about cost containment; it has to cover the whole country if it’s going to work. And if states start to opt out, the whole system falls apart.
Chiotakis: Marketplace’s Mitchell Hartman with us live this morning. Mitchell, thanks.
Hartman: You’re welcome.
Chiotakis: By the way, big managed care health provider Humana today reported a jump in profits of 21 percent for the last three months. Investment strategist Bill Stone from PNC Financial says there are a couple of reasons for the increase:
Bill Stone: They’re seeing some significant revenue increases from some added memberships, particularly on their plans for seniors, this Medicare advantage, also getting some premium increases there. Then on the other side, they’ve actually had some lesser payouts out of those particular plans, so it’s a little bit of a combination of both.
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