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Obama's Embrace Of Health Care Opt-Out Could Shift Legal, Public-Relations Debates

Obama Opt Out

First Posted: 02/28/11 03:45 PM ET Updated: 05/25/11 07:35 PM ET

WASHINGTON -- White House officials insisted on Monday that President Barack Obama's embrace of a provision that would give states the right to opt out of his health care law three years earlier then is currently allowed was a function of policy preferences and not due to ongoing legal drama.

Behind the scenes, however, defenders of the legislation quickly began an aggressive push to see if the new provision, which moves the opt-out date from 2017 to 2014, could alter the balance of arguments taking place both in the courts and the realm of public opinion.

"This is the first major bipartisan reform effort that has won the president's support since the law was passed," Sen. Ron Wyden (D-Ore.), who cosponsored the opt-out amendment with Sen. Scott Brown (R-Mass.), noted in an interview with The Huffington Post. "I think this is an opportunity to dramatically change the debate about health reform."

Rather than spending what he described as "a huge amount" of effort and taxpayer money to roll back the bill, Wyden said, the compromise measure could make design of an alternative to the federal system seem more promising to officials at the state level.

The Oregon Democrat declined to speculate on how an expedited opt-out date might change the legal argument around the bill. "I'm a lawyer in name only," he said. But his staff has put in a request with the Congressional Research Service's legal department to get its take.

At issue is the constitutionality of the individual mandate, which forces almost all U.S. citizens to purchase health insurance or face a financial penalty. Congress' capacity to legislate such a measure has been contested as far back as the bill's crafting. On Monday, administration officials insisted that merely allowing states to scrap the provision -- provided they meet minimal standards -- in 2014 rather than 2017 did little to change their argument that Congress has such authority under the commerce clause.

"This doesn't really change anything in terms of what is being challenged in court," one senior administration official. "The only impact maybe one could point to is that it really does emphasize that states really do have flexibility to design these programs in ways that best meets the needs of their citizens and the makeup of their state."

In a conference call organized for consumer advocates earlier in the day to explain the Obama's policy proposal, White House officials made much the same case. Simply moving the opt-out date to 2014 doesn't change the fundamentals of their legal argument. But constitutional scholars and health care advocates, when looking closely at the issue, said the White House made its lift in the case a bit lighter.

"This puts the burden back on the states as to whether they want to have the mandate apply or not," said Tim Jost, a law professor at Washington and Lee University who specializes in health care law. "This gives them more flexibility and it at least detracts some from their argument."

In particular, Jost and others stressed, states would have a tougher time asserting "standing" in court should the opt-out date be moved up three years. Already, a case was dismissed in a U.S. District Court for the Southern District of Mississippi on grounds that the plaintiffs could not prove that the law was currently causing them harm. The judge in that case, Keith Starret, cited the far-off date of the individual mandate's implementation, 2014, as well as various waivers that groups and individuals could utilize to exempt themselves from the mandate, as reasons not to offer a ruling. An advanced opt-out date should, theoretically, offer judges greater pause when deciding whether to rule on the law.

"The courts who have accepted that there is standing have more or less articulated that the present existence of a federal law is enough ... They would still be doing that," said Ian Millhiser, a policy analyst for the Obama-allied Center for American Progress. "That said, the states themselves, the Virginia case and the various states in the Florida case already have a very weak standing claim... and given that, it is quite possible that courts would point to [a 2014 opt-out date] as another factor undermining their standing."

Standing, however, is only a provisional ruling. Eventually, the law will be at such a stage of implementation that no court can say that plaintiffs aren't yet affected, and that day will likely come before the state opt-out clause is in effect, even if Obama persuades Congress to move it from 2017 to 2014. But as the administration continues to argue that the president's health care law is not a dramatic power grab by the federal government, it will have another arrow in the quiver.

"I don't think the debate over the individual mandate really gets affected by this," said Doug Kendall, founder and president of the Constitutional Accountability Center, a progressive think tank and law firm. "What does are cases like in Florida, which was brought by the 26 attorney generals who do much more than challenge the individual mandate. They call this bill an assault on federalism and a violation of the federal structure."

Kendall's organization represented state officials arguing the reverse, "That the law builds in a great deal of flexibility to the states and is a good example of constitutional federalism at its best," he said.

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