Tag: Obamacare

Obama Admin. Repeats Discredited Cost-Shifting Claim in Federal Court

Defending ObamaCare in federal court yesterday, the Obama administration’s acting solicitor general, Neal K. Katyal, peddled the widely discredited claim that the uninsured increase your and my health insurance premiums by $1,000:

“When people self-finance their health care,” Katyal contended, “that raises the cost of health care overall by $43 billion a year, and that raises the average family’s premiums by $1,000 a year. That will price untold numbers of people out of the market.”

That estimate comes from two left-wing groups, Families USA and the Center for American Progress Action Fund.

When President Obama himself made this claim, FactCheck.org reported:

[Obama] said ”the average family pays a thousand dollars in extra premiums to pay for people going to the emergency room who don’t have health insurance.” That’s from a recent report by Families USA, a group that lobbies for expanded government coverage. But another study for the authoritative Kaiser Family Foundation thinks that figure is far too high.

Serendipitously, the same day that Kaytal was repeating this discredited claim in federal court, USA Today reported:

Jack Hadley, senior health services researcher at George Mason University in Fairfax, Va…has found that privately insured individuals don’t end up paying higher premiums to make up for the uninsured because hospitals that serve lower-income families don’t have a lot of patients with insurance. He said the government pays about 75% of those unpaid hospital bills either by direct payment or through a disproportionate payment of Medicaid. (emphasis added)

HHS Plays Chicken Little — Again

USA Today reports on a new Obama administration study:

On average, uninsured families can pay only about 12% of their hospital bills in full. Families with incomes above 400% of the poverty level, or about $88,000 a year for a family of four, pay about 37% of their hospital bills in full, according to the Department of Health and Human Services study.

Oy, where to begin?

This is pre-existing conditions all over again.  In the hope of saving ObamaCare from the gallows, the Obama administration is blowing a real but relatively small problem way out of proportion.

The best data indicate that the problem of the uninsured not being able to pay their medical bills is real but relatively small.  “Uncompensated care” for the uninsured accounts for just 2.8 percent of health care spending. To put that in perspective, 30 percent of Medicare spending is pure waste, according to the Dartmouth Atlas. Moreover, studies show that the uninsured who do pay their bills pay so much more than private insurance does that they more than make up for the uninsured who don’t pay their bills.  That is, total uncompensated care may be negative.

This HHS report adds nothing to our understanding of this problem. Everyone already knows that nearly everybody would have a hard time paying an expensive hospital bill if they didn’t have health insurance.

In fact, this report detracts from our understanding of the problem. It essentially says that if all uninsured people were to experience a hospitalization, only some of them would be able to pay the entire bill for some hospitalizations—not necessarily their own hospitalization—with their liquid assets.  That’s as non-illuminating as saying that very few “D” students could afford to pay four years of college tuition (say, $100,000) with the money in their bank account:

  1. Just like few “D” students are headed to college, very few of the uninsured are going to be hospitalized.  Not only are most of the uninsured young and healthy, but most of them buy insurance as they get older.
  2. The “D” students who do go to college probably won’t be attending the most expensive colleges.  Likewise, the uninsured who are hospitalized are likely to have relatively less-expensive episodes of care.
  3. Of the “D” students who attend college, some would be able to pay for some of their tuition from their bank accounts.  But rather than tell us how much of these hypothetical medical bills the uninsured could pay, HHS reports the number that would be unable to pay these hypothetical medical bills “in full,” and that total billings for those hypothetical hospitalizations—not the unpaid amount—account for 95 percent of medical care provided to the uninsured.
  4. Some of those “D” students could obtain student loans and pay off their tuition over time.  Likewise, some of the uninsured will be able to borrow money or sell their houses or cars to pay their medical bills.  But HHS doesn’t account for the ability of the uninsured to borrow, nor does it count their ability to tap non-financial assets like cars and houses.

In short, HHS bent over backward to make this problem appear bigger than it is.  Moreover, they couched their misleading findings in ways that lent themselves to even greater exaggeration.  For example, the above quote from USA Today,

uninsured families can pay only about 12% of their hospital bills in full.

paints a far darker picture than what HHS actually found:

On average, uninsured families can only afford to pay in full for about 12% of the admissions to hospital (hospitalizations) they might experience.  [Emphasis added.]

It’s almost as if HHS was hoping reporters would misreport their findings in a way that made the problem sound worse.

Yes, Says Virginia, There Are Limits on Federal Power

Today, the Fourth Circuit became the first appellate court in the nation to enter the Obamacare fray.  It heard two very similar cases back-to-back, Liberty University’s, in which the government won in the district court, and the Commonwealth of Virginia’s, in which Judge Henry Hudson struck down the individual mandate back in December.  Going into the hearing, Virginia Attorney General Ken Cuccinelli’s legal team had done a wonderful job setting out the reasons why Hudson was correct and why Congress went too far in asserting the unprecedented power to compel people to enter into contracts with private insurance companies.  I was proud to sign Cato’s brief supporting that position and continue to maintain that the federal government cannot require people to buy goods or services under the guise of regulating interstate commerce.  Moreover, the individual mandate is the linchpin of the overall legislative scheme (as everyone concedes), so if it falls, the rest of the law—at least its central provisions—must fall with it.

Indeed, the Fourth Circuit judges—a Clinton appointee and two Obama appointees, in a random selection unfortunate to the challengers—struggled with the idea that Congress could regulate “inactivity.”  The government—which has now determined that the challenges are so serious as to send the solicitor general to argue in lower courts—claimed that Congress can do anything it wants relating to anything that in any way affects a national market such as that for health care.  Given that decisions not to buy insurance, or to self-insure, or not to pay for health care until presented with a bill, clearly have a substantial effect on interstate commerce, the argument went, Congress can require people to buy health insurance.  The judges seemed to agree to a certain extent but were still troubled by the textual truism that a power to “regulate” implies an active object or activity that is being regulated.  And indeed, if a “decision” not to buy something or the state of not having acquired something is all that is required to invoke congressional jurisdiction, then the Constitution’s enumerations of federal power mean absolutely nothing.

The government is understandably unconcerned with articulating a principled limit on its own power, and this particular panel of judges may find some way to avoid dealing with the activity/inactivity conundrum, but one can only hope that the Supreme Court ultimately rejects the claim that Congress can grant itself unlimited power simply by legislating in an area of great national concern.

Starting at 2pm Eastern, you can stream the oral arguments from the Court’s website here.

When Fighting ObamaCare, the Pen Is Mightier…

On Wednesday, the opening brief for the 26 states challenging ObamaCare was filed in the Eleventh Circuit. Also filed was the brief for the co-plaintiff, the National Federation of Independent Business. (Ilya Shapiro previously blogged about the filings here.) The government is appealing from Judge Roger Vinson’s stirring decision striking down all of the Affordable Care Act (ACA). (An edited version of that decision is available here.)

Because the challenge to Obamacare is the most important constitutional question in many decades, and because the case will have substantial ramifications for the health of our citizens as well as the health of our system of supposedly limited government, Cato is breaking protocol (we usually just get involved at the Supreme Court level) and filing amicus briefs in nearly every circuit in which a challenge is being made, at nearly every stage of litigation. Next week, we will also be filing in the Eleventh Circuit.

The states’ brief and the NFIB brief are excellent examples of persuasive writing, nuanced legal reasoning, and in-depth research. After 70+ years of judicial abdication and constitutional misinterpretation, we need good lawyering on our side. With the first principles of the Constitution largely forgotten, we have to play the hand that the Court has dealt us.

In these briefs, the lawyers have played their hands exceptionally well. Effective legal writing will maintain momentum while remaining persuasively rooted in law. A good turn-of-phrase doesn’t hurt either. The briefs are replete with great examples of both.

Recall that the litigation mostly concerns whether the so-called “individual mandate” — a part of the act that requires every citizen, with a few narrow exceptions, to maintain a qualifying health insurance plan or suffer a fine — is within Congress’s power to regulate interstate commerce. Even with the breadth that the Commerce Clause has been given since the New Deal, no case has allowed Congress to conscript citizens into commercial transactions, regulate them, and then blithely call it an ordinary regulation of commerce.

The government claims that the uninsured have a “substantial effect” on interstate commerce and thus fall under congressional power. The NFIB brief analogizes it this way:

[W]hereas the “substantial effects” doctrine would allow Congress to regulate local bootleggers because of their aggregate effect on the interstate liquor market, the uninsured “affect” the health-insurance market only as a teetotaler affects the liquor market, and the power to regulate bootleggers does not imply the power to conscript teetotalers.

Interestingly, as recently as 1920 Congress did not believe it even had the power to ban alcohol (“conscript teetotalers?”) absent a constitutional amendment. Now, Congress thinks it can make us buy health insurance.

I’m particularly fond of how the NFIB brief accurately characterizes the government as defending a “hypothetical statute”:

The Government’s principal argument attempts to recharacterize the mandate as a regulation of the economic activity of obtaining healthcare while uninsured. But the mandate does not regulate that commercial practice. Rather, it regulates the status of being uninsured, regardless of whether healthcare is obtained, let alone obtained without compensation. It is legally irrelevant that some sub-class of the uninsured will receive uncompensated care, for Congress cannot bootstrap from that proscribable practice to the substantially broader class of uninsured individuals who do not engage in it.

As Michael Cannon tirelessly points out, the “centerpiece of ObamaCare is a three-legged stool, comprised of the individual mandate, the government price controls that compress health insurance premiums, and the massive new subsidies to help Americans comply with the mandate.” Without the individual mandate forcing citizens to diversify the risk pool, ObamaCare will fail even more spectacularly than otherwise.

This fact has become a centerpiece of the government’s arguments for ObamaCare — that the individual mandate remedies the “substantial effects” of the uninsured and thus makes it a “necessary and proper” use of Congress’s commerce power. Of course, the uninsured only have these constitutionally significant “substantial effects” in the context of the rest of Obamacare. In the biting words of the NFIB brief:

[I]t is irrelevant for “substantial effects” purposes that insurers want subsidies to offset losses stemming from the ACA’s requirements to insure sick individuals. Market non-participants do not negatively “affect” commerce simply because sellers’ woes are attributable to costly government regulation rather than normal free-market conditions. The non-participants are not harming the insurance market; they simply are not ameliorating the government’s own market interference.

The states’ brief is equally impressive. Reaching down to the core principles of limited government that the individual mandate threatens, the brief looks at the ramifications of upholding the law:

Congress’s “plenary” regulatory authority over matters within the scope of its commerce power is strong evidence that Congress may not drag unwilling individuals within the scope of that power. Congress has “direct and plenary powers of legislation over the whole subject” of interstate commerce and therefore “has the power to pass laws for regulating the subjects specified, in every detail, and the conduct and transactions of individuals [in] respect thereof.” Indeed, Congress has “full control” of “the subjects committed to its regulation.” If the Constitution gave Congress authority to draft individuals not just for military service, but for any activity directly affecting interstate commerce, and then to exercise full control over them, the Framers surely would have proposed far more protections in the Bill of Rights or rejected this dangerous new power altogether. But they did neither, precisely because the commerce power was not some vortex of authority that rendered the entire process of enumeration beside the point.

I commend all the attorneys involved for a job well done. If you are at all legally minded, I suggest reading both the briefs in their entirety. There are plenty of other bon mots to savor. For further reading, Cato Institute Chairman Robert Levy’s new white paper gives a non-technical overview of the legal arguments against ObamaCare.

Want to Repeal ObamaCare? Stay On Message

Yesterday, I reluctantly dinged House Majority Leader Eric Cantor (R-VA) and House Budget Committee chairman Paul Ryan (R-WI) for veering off-message after bravely introducing and winning House passage of badly needed Medicare reforms.  Each said ill-advised things to the media that undermined the long-term goal of Medicare reform.  I even emailed some colleagues, “Why can’t they stay on-message, as they have with ObamaCare?”

As if on cue, it appears that House Ways & Means Committee chairman David Camp (R-MI) may have outdone both Cantor and Ryan.  Huffington Post reports that Camp used the word “dead” to describe the effort to repeal ObamaCare.

I know, I know, he probably only meant that repeal is dead in this Congress.  Yes, yes, he was backed into it by a reporter.  Yeah, he will probably push for repeal in the next Congress, just as he did in this Congress.  Is Huffington Post seizing on the word dead and painting an inaccurate picture of just how much Camp really, really wants to get rid of this intolerable law?  No doubt all of this is true.  None of it matters one bit.

Camp is the chairman of a powerful congressional committee.  He should know that’s exactly what reporters are trying to do.  And he should know how to stick to the script.  Rather than use his comments to signal once again how committed he is to ensuring that ObamaCare never takes full effect in 2014, he gave us a news cycle — hopefully no more than one — where the words ObamaCare, repeal, and dead appear in the same sentence.

Drinking Away Your Constitutional Problems

Santa Clara law professor Brad Joondeph, who runs the very helpful – as a primary document aggregator for all the Obamacare cases –  ACA Litigation Blog, thinks he’s stumbled onto something :

So after reading my roughly 500th ACA-litigation-related brief, motion, or filing of some sort, I think I have gotten a little punchy. But it occurs to me that a a great new drinking game for those ACA litigation buffs who sit around on Friday nights drinking beers – a huge cohort, I am sure – would be to read aloud briefs filed by the challengers, and take turns drinking when the word “unprecedented” is used.

Indeed, the argument that there is no Supreme Court precedent sanctioning the assertion of power the government claims  – that the individual mandate is, quite literally, unprecedented – goes back to the earliest articulated constitutional arguments against Obamacare, particularly by the “intellectual godfather” of the legal challenges.  I can tell you that Cato’s latest Obamacare brief, which we’ll be filing in the Eleventh Circuit – the Florida-led 26-state case – next week, uses the word three times.  (We also use “novel.”)

The drinking game that Joondeph proposes, however, is not, um, unprecedented.  Josh Blackman has been talking about it incessantly at least since our time writing about the Privileges or Immunities Clause.  He even blogged about it last August! 

I would suggest that Brad and Josh play the “unprecedented” drinking game to settle the score once and for all, but alas Josh doesn’t drink.  Maybe I should step in for him; if I can bet Yale law professor Akhil Amar $100 on the outcome of the litigation, I can certainly do this.

For other connections between booze and the Commerce Clause, see my recent post on the (unfortunately not unprecedented) Care Act.

Obamacare on Appeal

As advocates gear up for the first appellate argument in the ongoing Obamacare lawsuits – Tuesday in Richmond – today marks an important milestone: the filing of two eloquent briefs responding to the government’s appeal of Judge Roger Vinson’s January ruling that found the individual mandate unconstitutional and non-severable, thereby striking the entire legislation. 

These two briefs, one by 26 states (and for the first time signed by former solicitor general Paul Clement) and one by the private co-plaintiffs in that same Florida case (the National Federation of Independent Business and two individuals) present a full-throated defense of the basic principle upon which this country was founded: that the federal government is one of enumerated and limited powers whose primary goal is to preserve liberty.  They describe exhaustively why that government cannot require people to buy goods or services as a means of regulating interstate commerce and why therefore the unprecedented individual mandate goes beyond what the Constitution authorizes.  Indeed, forcing people to buy health insurance is neither a regulation of interstate commerce nor a constitutionally appropriate means of achieving such regulation. 

If the Eleventh Circuit, which will hear argument June 8 in Atlanta, takes these arguments seriously – and adheres to the truism that the Constitution provides fixed limits on federal power – then the “linchpin” of Obamacare is doomed.  Any ruling to the contrary, allowing the individual mandate to stand, would unleash an entirely novel and unbounded conception of federal power.

Cato will be filing our own brief a week from today.  Georgetown law professor and Cato senior fellow Randy Barnett will not be on it, however, because he has joined the NFIB’s legal team – an exciting development, to be sure!