RICHMOND, Va. — A federal judge in Virginia ruled Monday that a key provision of the nation’s sweeping health care overhaul is unconstitutional, the most significant legal setback so far for President Obama’s signature domestic initiative.

U.S. District Court Judge Henry Hudson found that Congress could not order individuals to buy health insurance.

In a 42-page opinion, Hudson said the provision of the law that requires most individuals to get insurance or pay a fine by 2014 is an unprecedented expansion of federal power that cannot be supported by Congress’ power to regulate interstate trade.

“Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” Hudson wrote. “In doing so, enactment of the (individual mandate) exceeds the Commerce Clause powers vested in Congress under Article I (of the Constitution).

News of the court’s decision rippled through Maine, which may be on the verge of joining other states in challenging the health reform law on similar grounds.

“This is going to go back and forth until it goes to the Supreme Court,” said Trish Riley, director of the Maine Governor’s Office of Health Policy and Finance.

Riley said the outgoing Baldacci administration will keep moving forward with plans to implement the reform law, including holding a public hearing today on draft recommendations for the next governor and Legislature. Even if the Supreme Court ultimately repeals the individual mandate section of the law, other reforms – such as a requirement that states set up new insurance markets – could take effect in 2014 as scheduled, she said.

“It’s the law. It’s our job to implement the law until such time as the Supreme Court or the Congress of the United States says it isn’t,” Riley said.

Republican Gov.-elect Paul LePage will have to take up the implementation plans when he is sworn in next month. But he and incoming Attorney General William Schneider have said Maine may join the list of states supporting a Florida lawsuit against the individual mandate.

Maine’s Republican U.S. senators, Olympia Snowe and Susan Collins, have signed a-friend-of-the-court brief supporting repeal in the Florida case.

“(Monday’s ruling) is a step in the right direction, but we know things are not over yet,” said Dan Demeritt, spokesman for LePage.

The Virginia decision clearly backs up LePage’s concerns about the law, Demeritt said. But it’s not clear whether the ruling will affect LePage’s plans to join the Florida challenge, which had been considered the most likely to reach the Supreme Court.

“We’ll take a hard look at the decision and see if it changes anything,” Demeritt said.

Hudson is the first judge to rule that the individual mandate is unconstitutional. He said, however, that portions of the law that do not rest on the requirement that individuals obtain insurance are legal and can proceed. Hudson indicated there was no need for him to enjoin the law and halt its implementation, since the mandate does not go into effect until 2014.

The ruling comes in a case filed by Virginia Attorney General Ken Cuccinelli, a Republican, who said he was defending a new state statute that made it illegal to require people to carry health insurance in Virginia.

“This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution,” Cuccinelli said in a written statement.

Federal officials responded that they are confident the statute will ultimately be upheld. A victory for Cuccinelli at this early legal stage means no more for the law’s fate than previous rulings that have found the opposite, they have argued.

“We are disappointed in today’s ruling but continue to believe – as other federal courts in Virginia and Michigan have found – that the Affordable Care Act is constitutional,” Justice Department spokeswoman Tracy Schmaler said in a written statement. “There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law, and we are confident that we will ultimately prevail.”

The insurance mandate would spread risk more broadly and control premiums for everyone, enabling the federal government to bar insurers from denying coverage to Americans with pre-existing medical conditions.

Without a mandate, Americans would be free to wait until they are sick before buying insurance, driving up premiums, a phenomenon that has occurred in several states that have guaranteed coverage without any requirement.

 

Staff Writer John Richardson and the McClatchy News Service contributed to this report.