U.S. District Judge Normal Moon, however, ruled that the law that requires individuals to purchase health insurance and requires employers to provide coverage for their employees was legal under the U.S. Constitution’s Commerce Clause.

Moon’s findings were that without the coverage requirements mandated by the law, the cost of health insurance would increase as the number of individuals with insurance declines, which is, “…precisely the harms that Congress sought to address with the Act’s regulatory measures.” He also found that since interstate commerce would be adversely affected by large businesses failing to offer adequate healthcare coverage to employees, “…the employer coverage provision is a lawful exercise of Congress’ Commerce Clause power.”

Liberty University was founded by the conservative evangelist Jerry Falwell. Its legal counsel was not available for comment.

The state of Virginia has also filed a challenge to the healthcare law, as have twenty other states, in a federal court in Florida, with many of the challenges addressing whether or not the government is allowed to regulate the purchase (or not) of a good or service under he Commerce Clause, and whether the fines are really a tax. Rulings are expected during the coming weeks and months.

While the challenging states believe the fines are taxes, Judge Moon found that the fines were merely “penalties” as they are not meant to raise revenue, but just to, “…enforce the requirement that individuals and employers purchase or provide health insurance.”

Addressing the opponents of the law who have argued that it illegally permits federal funding for abortion, Moon said “they fail to allege how any payments required under the Act, whether fines, fees, taxes, or the cost of the policy, would be used to fund abortion,” and stressed that there are safeguards in place to prevent that from occurring.

President Obama’s administration is pleased about Moon’s decision, the second major ruling in favor of the healthcare reform law. A federal judge in Michigan was the first, upholding the provisions requiring American citizens to purchase health insurance coverage.

In a blog post, Stephane Cutter, a White House adviser, wrote, “The judge’s ruling today only underscores the importance of the law’s individual responsibility provision. In order to make health care affordable and available for all, the Act regulates how to pay for medical services.”

Under the new health care law , insurance companies must change their spending habits to meet new restrictions, which specify that large group plans must spend at least 85 cents of premium dollar on actual medical care, while small group and individual plans are required to spend 80 cents of every dollar on medical care, as opposed to administrative expenses.

At issue, is the fact that some health insurers are merely reclassifying expenses, and it’s not just an issue for patients, but for investors as well. According to Reuters, Wall Street keeps a close watch on such spending levels, which are known as “medical-loss ratios” or “MLRs,” to gauge the potential for profit. After the Senate report was released, major health insurance stock indices fell.

The Democrat-led Senate Committee on Commerce, Science and Transportation said in a statement, “”The insurance industry is beginning to consider the financial impact of the new federally required (medical) loss ratio requirements, including questionable changes in their accounting practices. Wellpoint, Inc., it said, “…has already ‘reclassified’ more than half a billion dollars of administrative expenses as medical expenses.”

When asked for comment, Kristin Binns, WellPoint spokeswoman, said that the company would work with industry regulators to implement the MLR requirement, but she didn’t speak to the issues of cost shifting or accounting practices.

According to another Reuters article, a review of insurance company expenses for the 2009 fiscal year shows that in some markets, the average amount spent on actual medical care is only 74 cents of every premium dollar.

Chris Curran, Cigna spokesman, said it was too early to know how that company would be affected by the new rules, and that new calculation methods were still in development. Other insurers chose not to comment at all.

Changes provided by the healthcare reform bill include the extension of health coverage to 32 million previously-uninsured Americans, as well as the imposition of new strictures and taxes on the insurance industry. One crucial change is that insurers will no longer be permitted to deny coverage to people with pre-existing medical conditions.

The vote was the culmination of many battles between Democrats and Republicans, which had taken over Congress during the last year, and resulted in downticks in President Obama’s approval ratings.

Speaking from the White House after the vote, President Obama said, “Tonight, at a time when the pundits said it was no longer possible, we rose above the weight of our politics.”

He also said, “This legislation will not fix everything that ails our healthcare system, but it moves us decisively in the right direction. This is what change looks like.”

The $940 billion bill has been widely criticized by Republican critics who believe it to be an intrusion in the healthcare sector, and that it will increase the deficit, and reduce patients’ choices.

Reuters is reporting that many states are already filing lawsuits to challenge the new insurance law, and it is likely that healthcare will continue to be a major issue in the campaign season leading to midterm Congressional elections in November.

The United States House of Representatives is due to vote on the healthcare overhaul, one that would require all Americans to have health insurance but would also provide subsidies to help low- and middle-income workers, this Sunday. The new plan would also ban common insurance practices like refusing coverage to people with pre-existing medical conditions.

According to the NCSL, the state-level opposition efforts, “…in general … seek to make or keep health insurance optional, and allow people to purchase any type of coverage they may choose.”

Earlier today, Democratic House leaders expressed their growing confidence about winning a close vote. If the healthcare reform bill passes the House, it only has to pass the Senate by a simple majority, under the planned procedure regarding the legislation.

Not unlike the partisan politics that have been present during the entire federal process, the state attempts to block healthcare reform are more likely to be present – and successful – in states where Republicans have control of at least one legislative chamber, and of the governor’s office, but so far only two states, Virginia and Idaho, have actually enacted laws, though there is a constitutional amendment that will come before the voters of Arizona this November. In states like New York and Illinois, where the Democrats dominate, there is no such anti-health care reform legislation, at least according to the NCSL.

On Wednesday, Governor C. L. “Butch” Otter of Idaho, signed a bill allowing the state’s attorney general to file a lawsuit opposing the federal healthcare legislation which requires individual citizens to purchase medical insurance.

Otter’s spokesman, Jon Hanian says that the Idaho governor feels that the federal plan is “overreaching,” and likely to increase the medical expenses of state governments. “He’s concerned we can’t afford it,” Hanian said. He also added that the Republican Otter is “…disappointed in how the Democrat-led U.S. Congress is handling the legislation.”

On Thursday, White House spokesman Robert Gibbs was dismissive of the states’ complaints. According to the latest version of the bill, all states would receive additional funding to cover the Medicaid costs expected to increase as a resuld of the reform, including 100% federal coverage for new enrollees through 2016. Medicaid is jointly administered by the federal and state governments, and provides healthcare to the poor.

Nevertheless, the states are concerned that they will have to be responsible for the cost of healthcare, and believe that the reforms infringe on their powers under the tenth amendment of the U.S. Constitution’s Bill of Rights., which says, “…powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states.”

Gibbs is firm that the tenth amendment is not being breeched, saying, “What we’re about to pass and sign into law will meet Constitutional muster,” he said.