Tag: Obamacare

After Florida, What’s to Be Done about ObamaCare?

Uncertainty over the practical effect of Judge Roger Vinson’s decision on Monday that ObamaCare is unconstitutional in its entirety continues to swirl all across the country. The day after the decision came down, as I noted here on Wednesday, Wisconsin Attorney General J.B. Van Hollen, one of the parties to the suit, issued a statement saying: “This means that, for Wisconsin, the federal health care law is dead,” and his state “was relieved of any obligations or duties” to carry out the statute. And just today Alaska’s Governor Sean Parnell asked his attorney general to advise him on whether implementing and enforcing the federal healthcare overhaul would put Parnell in violation of his oath of office. He told reporters that he took an oath to support and defend the constitutions of the United States and Alaska, adding that he has a duty to uphold the law. Other governors and state AGs, to say nothing of insurance companies, employers, and ordinary citizens, are all in the same boat, and will be until the Supreme Court finally decides the matter, which may be a year or more in the offing.

Here’s the legal issue in a nutshell. Two district courts have upheld the statute. Prior to Monday’s ruling, a district court in Virginia found a core element in ObamaCare, the individual mandate, to be unconstitutional. And on Monday Judge Vinson, in the Northern District of Florida, issued a “declaratory judgment,” declaring ObamaCare unconstitutional in its entirety. In his opinion he held that the judgment was “the practical equivalent of specific relief such as an injunction,” and he added that “it must be presumed that federal officers will adhere to the law as declared by the court.” The Obama administration has thus far shown no inclination to “adhere to the law as declared by the court.” Nor has the administration thus far sought to stay any practical effects of the court’s ruling.

Just what those effects may be is what is unclear, leading to the confusion. It would seem, at a minimum, that the parties to the suit are bound by the judgment. If so, at the least, the government has no authority to implement the statute within the jurisdiction of the Northern District of Florida. But beyond that jurisdiction, does the government have authority to do so with respect to those parties? Suppose one of the winning plaintiffs sought to enjoin the government in a jurisdiction that had upheld the statute. On which of the conflicting decisions would the court decide to grant or deny the motion? Suppose the government sought a writ of mandamus from a court in such a jurisdiction, ordering one of the plaintiffs to comply with the statute. Again, on which of the conflicting decisions would the court decide to grant or deny the motion?

The administration could seek to stay the effects of the two decisions that went against it, of course, which isn’t to say a court would necessarily issue such a stay. After all, if it turns out that those rulings are correct, a huge amount of trouble and expense, especially in financially strapped states, will have been for nothing – and vast insurance and medical markets will have been uprooted.

Not surprisingly, therefore, there is action in the political branches to try more quickly to resolve this matter. Yesterday, for example, Virginia Attorney General Ken Cuccinelli asked the Supreme Court to bypass the normal appeals process and review the decision from that state directly. The Obama Justice Department said it will oppose the motion. Then just today Senator Kay Bailey Hutchison (R-Texas) and 15 of her Republican colleagues announced that they’re working “to place a moratorium on any further implementation of the statute until there has been final judicial resolution in the pending lawsuits challenging the law.” Of particular note: “The bill delays provisions and new regulations of the Obama health care law not in effect on the date of enactment until final judicial resolution of the lawsuits. The bill does not suspend features of the law already in effect on the date of enactment.” And finally, on the other side of the aisle, Senator Bill Nelson (D-Florida) has just introduced a “Sense of the Congress” resolution urging the Supreme Court to put the matter on a fast track to resolution. Stay tuned, there’s much at stake.

Good Riddance 1099 Mandate

Senate Democrats deserve credit for this much: in voting to repeal the so-called “1099 reporting mandate,” they have acknowledged that this small part of Obamacare will be a disaster.  With time and education, perhaps they will see what most Americans already see: The rest of Obamacare is a disaster too – a monumental one – for patients, doctors, employers, the Constitution, and individual freedom.

At this point, even the most ardent Obamacare supporters must have noticed that the law has not been well received.  As public opposition further manifests itself, perhaps some supporters will begin to reconsider their fealty to this law.

Not a Good Week for Obamacare

It has not been a good week for Obamacare.  Another court ruled that the bill was unconstitutional, while it took a party-line vote in the U.S. Senate to avoid a legislative repeal.  Meanwhile, chipping away at the legislation began, with the Senate voting to repeal one of the bill’s most unpopular provisions, a requirement that businesses file 1099 tax forms on even small purchases.  Supporters of the bill are bailing as fast as they can, but the ship is sinking rapidly.

ObamaCare After Judge Vinson’s Ruling

Judge Roger Vinson’s decision on Monday that ObamaCare is unconstitutional in its entirety has sparked a lively debate at Cato and in the country as well about precisely what the practical effect of the decision is, pending a final ruling by the U.S. Supreme Court, which may be a year or more in the offing.

Obviously, the Obama administration and the states have already begun implementing parts of the law. Yet the Washington Post reports this morning that Wisconsin Attorney General J.B. Van Hollen, one of the parties to the suit, “issued a stern statement” following the decision:

“This means that, for Wisconsin, the federal health care law is dead,” and his state “was relieved of any obligations or duties” to carry out the statute.

Other attorneys general and governors have taken a variety of positions about the decision’s effect. Meanwhile, the Obama administration is proceeding with its implementation plans, and has indicated that it will seek a stay of Judge Vinson’s decision.

The problem that my colleague Bob Levy and I see with seeking a stay, however, is that Judge Vinson’s ruling declared ObamaCare unconstitutional; but the judge did not issue a formal injunction. Our colleagues Michael Cannon and Ilya Shapiro have endorsed one plausible reading of that ruling — i.e., absent a court-issued stay, ObamaCare cannot be further implemented. That interpretation may be correct, but the administration and others disagree, and the issues are murky.

What would the remedy be if the federal Department of Health and Human Services were to continue implementing ObamaCare? If an injunction had been issued, HHS officials might be found in contempt of court. But without an injunction, there is no obvious remedy.

Moreover, a single district court in a single state might not be empowered to foreclose nationwide implementation of a federal statute. After all, two other district courts have upheld ObamaCare’s constitutionality. Suppose each of the 26 states in the Florida case had filed separate suits. Suppose further that 25 of the 26 suits had been dismissed, but one outlier court had held that ObamaCare was unconstitutional. Would that court’s order effectively require HHS to abandon the legislation? Surely, proponents of ObamaCare would have a valid argument that start-and-stop implementation might be chaotic.

Because the issues are complex and unclear, the better outcome would be for the 11th Circuit Court of Appeals to clarify the effect of Judge Vinson’s ruling. And given the manifold implementation uncertainties surrounding the serious constitutional questions, affecting so many people and institutions, private and public, Judge Vinson’s decision should be put on a fast track to the Supreme Court.

Addendum: Further on the practical effect of Judge Vinson’s declaring ObamaCare unconstitutional – whatever it may be – it is reasonable to argue that the 26 plaintiff states in the Florida case need not, for now, take any action mandated by the statute. Any attempt by the federal government to force compliance by one of the recalcitrant states would likely result in further litigation that might have the salutary effect, at least, of clarifying this confusing situation.

Judge Vinson’s Greatest Hits

It’s hard to get too excited about a district court decision – this is one of several, and will be superseded by circuit and eventual Supreme Court decisions – but this decision in Florida v. U.S. Dept. of Health and Human Services is remarkable.  Most notably, the 78-page ruling is well theorized and engaging (Vinson’s opus is a joy to read compared to most stuff I have to wade through to understand what the courts are doing) and sets the stage for the appellate writings to come.  It puts “facts on the ground,” if you will. 

No higher courts are bound but they are influenced.  Judges, like anyone else, don’t want to reinvent the wheel where they don’t have to.  So the circuit courts and even the Supremes will say all this in their own words but don’t for a second think they ain’t payin’ attention.  I can’t cite you statistics about justices being influenced by district (or even circuit) court opinions, but it would be laughable to think that the outcome before the Court would be the same regardless of how the decisions on the merits before several thoughtful district judges went.

Read on for highlights from Judge Vinson’s magisterial opinion (to which I initially responded here and whose immediate consequences I analyzed here).  Page numbers are in parentheses after each quote.

Setting the stage:

This case is not about whether the Act is wise or unwise legislation, or whether it will solve or exacerbate the myriad problems in our health care system. In fact, it is not really about our health care system at all. It is principally about our federalist system, and it raises very important issues regarding the Constitutional role of the federal government. (2)

On the scope of the Commerce Clause:

Never before has Congress required that everyone buy a product from a private company (essentially for life) just for being alive and residing in the United States.[FN14]

 [FN14]… Here, people have no choice but to buy insurance or be penalized. And their freedom is actually more restricted as they do not even have a choice as to the minimum level or type of insurance to buy because Congress established the floor. A single twenty-year old man or woman who only needs and wants major medical or catastrophic coverage, for example, is precluded from buying such a policy under the Act. (38)

The distinction between activity and inactivity:

It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause. If it has the power to compel an otherwise passive individual into a commercial transaction with a third party merely by asserting … that compelling the actual transaction is itself “commercial and economic in nature, and substantially affects interstate commerce” [see Act § 1501(a)(1)], it is not hyperbolizing to suggest that Congress could do almost anything it wanted. It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place. If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be “difficult to perceive any limitation on federal power” [Lopez, supra, 514 U.S. at 564], and we would have a Constitution in name only. Surely this is not what the Founding Fathers could have intended. See id. at 592 (quoting Hamilton at the New York Convention that there would be just cause to reject the Constitution if it would allow the federal government to “penetrate the recesses of domestic life, and control, in all respects, the private conduct of individuals”) (Thomas, J., concurring). (43)

On the government’s argument that health care is “unique” because nobody can “opt out” of this market:

After all, there are lots of markets — especially if defined broadly enough — that people cannot “opt out” of. For example, everyone must participate in the food market. Instead of attempting to control wheat supply by regulating the acreage and amount of wheat a farmer could grow as in Wickard, under this logic, Congress could more directly raise too low wheat prices merely by increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized on the grounds that because everyone must participate in the market for food, non-consumers of wheat bread adversely affect prices in the wheat market. Or, as was discussed during oral argument, Congress could require that people buy and consume broccoli at regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend to be healthier, and are thus more productive and put less of a strain on the health care system. Similarly, because virtually no one can be divorced from the transportation market, Congress could require that everyone above a certain income threshold buy a General Motors automobile — now partially government-owned — because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business. (46)

Uniqueness is not an adequate limiting principle as every market problem is, at some level and in some respects, unique. (49)

On the government’s argument that the not buying health insurance is an “economic decision” that, in the aggregate, substantially affects interstate commerce:

The problem with this legal rationale, however, is it would essentially have unlimited application. There is quite literally no decision that, in the natural course of events, does not have an economic impact of some sort. The decisions of whether and when (or not) to buy a house, a car, a television, a dinner, or even a morning cup of coffee also have a financial impact that — when aggregated with similar economic decisions — affect the price of that particular product or service and have a substantial effect on interstate commerce. To be sure, it is not difficult to identify an economic decision that has a cumulatively substantial effect on interstate commerce; rather, the difficult task is to find a decision that does not. (53)

 The important distinction is that “economic decisions” are a much broader and far-reaching category than are “activities that substantially affect interstate commerce.” While the latter necessarily encompasses the first, the reverse is not true. “Economic” cannot be equated to “commerce.” And “decisions” cannot be equated to “activities.” Every person throughout the course of his or her life makes hundreds or even thousands of life decisions that involve the same general sort of thought process that the defendants maintain is “economic activity.” There will be no stopping point if that should be deemed the equivalent of activity for Commerce Clause purposes. (55)

On the Necessary and Proper Clause:

The Necessary and Proper Clause cannot be utilized to “pass laws for the accomplishment of objects” that are not within Congress’ enumerated powers. As the previous analysis of the defendants’ Commerce Clause argument reveals, the individual mandate is neither within the letter nor the spirit of the Constitution. To uphold that provision via application of the Necessary and Proper Clause would authorize Congress to reach and regulate far beyond the currently established “outer limits” of the Commerce Clause and effectively remove all limits on federal power. (62)

Why the entire 2,700-page piece of legislation must fall:

In the final analysis, this Act has been analogized to a finely crafted watch, and that seems to fit. It has approximately 450 separate pieces, but one essential piece (the individual mandate) is defective and must be removed. …   The Act, like a defectively designed watch, needs to be redesigned and reconstructed by the watchmaker.  (73-74)

In sum, notwithstanding the fact that many of the provisions in the Act can stand independently without the individual mandate (as a technical and practical matter), it is reasonably “evident,” as I have discussed above, that the individual mandate was an essential and indispensable part of the health reform efforts, and that Congress did not believe other parts of the Act could (or it would want them to) survive independently. I must conclude that the individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit. (74)

Concluding thoughts:

Regardless of how laudable its attempts may have been to accomplish these goals in passing the Act, Congress must operate within the bounds established by the Constitution. Again, this case is not about whether the Act is wise or unwise legislation. It is about the Constitutional role of the federal government. (75-76)

[FN 30]  On this point, it should be emphasized that while the individual mandate was clearly “necessary and essential” to the Act as drafted, it is not “necessary and essential” to health care reform in general. It is undisputed that there are various other (Constitutional) ways to accomplish what Congress wanted to do. (76)

The opinion is breathtaking.  I’ve read it three times now and each time come away with the realization that this judge intuitively “gets” what it is that Cato (including myself) have been saying all along.  And this despite our not having filed a brief in this particular court!

Aetna Exits Colorado’s Individual Market

According to the Denver Business Journal:

A spokeswoman for Aetna confirmed Monday that the insurer will no longer sell new individual-market health insurance policies in Colorado and will terminate current policies held by state residents no later than July 31, 2012.

Aetna had already announced that it will no longer sell child-only coverage or small-group coverage in the state.   Colorado is one of 34 states where insurers fled the market for child-only coverage as a result of ObamaCare.  Colorado took steps to try to stabilize its child-only market, and is considering requiring insurers to sell child-only coverage as a condition of selling coverage directly to adults.

Aetna isn’t commenting on whether ObamaCare played a role in its decision.   Aetna customers will have to switch plans by July 31, 2012.

ObamaCare Falls

Federal Judge Roger Vinson has struck down the entire so-called Patient Protection and Affordable Care Act as unconstitutional.  Excerpts from the opinion:

It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place…

The individual mandate is outside Congress’ Commerce Clause power, and it cannot be otherwise authorized by an assertion of power under the Necessary and Proper Clause. It is not Constitutional.

[O]n the unique facts of this particular case, the record seems to strongly indicate that Congress would not have passed the Act in its present form if it had not included the individual mandate. This is because the individual mandate was indisputably essential to what Congress was ultimately seeking to accomplish. It was, in fact, the keystone or lynchpin of the entire health reform effort…

Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.

What’s more, it appears that the Obama administration must seek intervention from a higher court if it wants to keep implementing ObamaCare.  Even though Vinson declined to issue an injunction forbidding the administration to implement the law, he did so because of:

a long-standing presumption “that officials of the Executive Branch will adhere to the law as declared by the court. As a result, the declaratory judgment is the functional equivalent of an injunction”…”declaratory judgment is, in a context such as this where federal officers are defendants, the practical equivalent of specific relief such as an injunction”…Thus, the award of declaratory relief is adequate and separate injunctive relief is not necessary.

In other words, absent intervention from a higher court, HHS must now sit on its hands.