Political and Legal Challenges to Health Reform Brian

November Elections § Republicans won 63 seats and control of the House (242 -193) § Republicans picked up 6 seats in the Senate (53 -47) § Democratic incumbents defeated: 49 § GOP incumbents defeated: 2 § Republicans picked up majority of state governors © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 2

Red Tide Sweeps The House © 2010 Foley Hoag LLP. All Rights Reserved. Presentation

Senate Election Results © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title |

Significant GOP Governor Wins © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title

States Governorships GOP Captured § Iowa § Michigan § Ohio § Pennsylvania § Wisconsin § Maine © 2010 Foley Hoag LLP. All Rights Reserved. § Kansas § New Mexico § Oklahoma § Tennessee § Wyoming § Florida Presentation Title | 6

State Legislative Results § Republicans now control 57 state legislative chambers, Democrats control 39, and two are tied. (Nebraska is unicameral and nonpartisan. ) § GOP did not lose a single state legislative chamber this election cycle. § Republicans gained over 500 seats in state legislative chambers across the country. © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 7

November Election Impact on Health Care Reform § Outright repeal of ACA highly unlikely given presidential veto and Democratic majority in Senate. § House Republicans likely to hold “symbolic” repeal vote and pursue targeted strategies to limit ACA implementation. § House floor votes likely on unpopular portions of health reform (e. g. 1099 tax filing mandate and medical device fees). § Republicans are likely to attempt to use appropriations process to prevent HHS from implementing key ACA provisions. § Congressional Review Act joint resolutions. § Aggressive use of House subpoena power — oversight investigations and hearings. § Key GOP themes – ACA impact on employers, health care premiums and cost, health care innovation, and seniors. © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 8

“Repeal and Replace” § Very good campaign rhetoric, but not political reality § House of Representatives may pass legislation in 2011 repealing ACA — but Senate will not act § President Obama would veto any legislation to repeal ACA § Sets up the ACA as major issue for 2012 Presidential election © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 9

Rolling Back Health Reform § A Coordinated Political Effort – De-funding specific programs and implementation – Challenging HHS regulations – Drafting targeted legislative proposals to amend statutory provisions – Holding House oversight hearings – Engaging in Litigation © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 10

Court Challenges to Health Reform § Nearly two dozen lawsuits filed to challenge individual mandate and the ACA in general § 20 State Attorneys General have filed suit in Florida challenging the ACA § Virginia’s Attorney General filed a separate lawsuit in the Eastern District of Virginia § The primary legal question at issue is whether the Constitution permits the federal government to require citizens to purchase commercial health insurance © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 11

Court Decisions Tally § 12 cases have been dismissed on procedural grounds § 3 federal district court decisions on the merits – Eastern District of Michigan court found ACA constitutional (currently on appeal to the Sixth Circuit, with briefs due Dec. 20) – Western District of Virginia court found ACA constitutional (notice of appeal filed with Fourth Circuit) – Eastern District of Virginia court found individual mandate unconstitutional © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 12

Virginia v. Sebelius § On Monday, December 13, federal district court Judge Henry Hudson in the Eastern District of Virginia struck down the “individual mandate” provision of ACA. § Judge Hudson stated: “At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage – it’s about an individual’s right to choose to participate. ” § The is decision was limited to Section 1501 [Individual Mandate] and “directly-dependent provisions” § The court denied plaintiff’s request for an injunction. © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 13

ACA Litigation Timeline § Northern District of Florida case will be the next major district court decision (appeal will be to the Eleventh Circuit) § Fourth Circuit Court of Appeals will likely take up the split decisions in Virginia in early 2011 § Supreme Court unlikely to hear case before 2011 -2012 term — although Virginia plaintiffs are proposing expedited review © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 14

Significance of the Individual Mandate § Individual mandate was a key provision for private insurers to offer guaranteed issue § The provision has its roots in past Republican proposals –GOP health care proposal in 1994 –Romney plan in Massachusetts in 2005 –Wyden-Bennett proposal in 2007 § There a variety of ways to restructure the mandate in the private insurance market to meet constitutional challenges © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 15

Final Thoughts § Debate on health reform was a debate over the role of government § The implementation of ACA will go on and so will the political challenges § Any Supreme Court decision is important for fate of both the ACA and the 2012 Presidential election § Deficit commission and rising health care costs make clear that these issues will be debated for years © 2010 Foley Hoag LLP. All Rights Reserved. Presentation Title | 16