Tag: Obamacare

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.

One for the Annals of Rent-Seeking

An article at HealthPolicySolutions.org (“a project of the Buechner Institute for Governance at the School of Public Affairs at the University of Colorado Denver”), about how ObamaCare is causing Colorado’s child-only health insurance market to implode, contains this startling admission by the top lobbyist for Colorado’s health insurance companies:

“Requiring all the carriers to sell this sort of plan creates a level playing field,’’ said Ben Price, executive director of the Colorado Association of Health Plans. “This is one of those unusual situations where we’re asking for more competition. If everyone else is in the market, the risk is spread across the entire market. Each company can afford to take on more risk.”

Catch that?  A lobbyist who admits that his job is to restrict competition, effectively stealing from consumers for the benefit of his clients!  How refreshing!

Wait, it gets better.

The legislation he’s advocating would tell any carrier that wants to sell insurance directly to Colorado consumers that they must also sell child-only coverage – despite the losses that ObamaCare’s price controls are likely to cause them in that sub-market.  The legislation would actually reduce competition in Colorado’s individual market, because it would place an additional (and costly) requirement on market entry.

In other words, this guy is so good at his job, he keeps lobbying for less competition even when says he isn’t.  Bravo, sir.  Bravo.

Opposition to ObamaCare Hits New High in Kaiser Family Foundation Poll

The following chart shows that ObamaCare’s unfavorables reached 50 percent in the latest Kaiser Family Foundation poll.  That’s higher than at any point since KFF started tracking ObamaCare’s unfavorables in January 2010.  The KFF poll also found that opposition is much more intense than support; 19 percent view the law very favorably, while 34 percent view the law very unfavorably.  Despite the availability of the these nuggets, KFF’S press release chose to deemphasize the surge: “Americans Remain Divided Over Health Reform With An Uptick In Public Opposition As GOP Ramped Up Repeal Campaign.”

Even more entertaining was this chart, which purports to show that Americans oppose defunding ObamaCare by nearly 2-to-1.

Dig a little deeper, though, and you’ll find that 16 percent of the public opposes defunding ObamaCare because they want to see the law flat-out repealed.  A less-misleading pie chart would show that 33 percent approve of defunding, 16 percent say “don’t defund, just repeal” (total: 49 percent), and 46 percent disapprove of defunding ObamaCare.

Other findings include:

  • 76 percent of the public oppose the individual mandate (and 55 percent oppose it even after hearing arguments for and against);
  • 69 percent support cutting spending on ObamaCare’s coverage expansions;
  • 60 percent believe ObamaCare will increase the deficit, while only 11 percent believe it will reduce the deficit;
  • 52 percent support cutting Medicaid;
  • 51 percent oppose ObamaCare’s employer mandate; and
  • 51 percent oppose ObamaCare’s new taxes on over-the-counter medications for HSA, FSA, and HRA holders.

Despite these generally sensible views, 68 percent believe that Congress can balance the budget without cutting Medicare.

Just Call Me ‘Liar of the Year’

It would appear that I am the Liar of the Year.

The fact-checking journalists at PolitiFact.com gave their 2010 Lie of the Year award to the notion that ObamaCare is “a government takeover of health care,” and in 2009 gave the same award to Sarah Palin’s “death panels” claim.  But as I explain in my latest column for Kaiser Health News, the fact-checkers left out a few facts.  Read the column to find out what PolitiFact missed.  Here’s my conclusion:

From my vantage point, the evidence shows that ObamaCare is a government takeover of health care, and Sarah Palin’s “death panels” claim was essentially true. If that makes me Liar of the Year, so be it.

But another way to look at it is this: PolitiFact has now misappropriated this award for two years in a row.  Not only is each of these “lies” factually true, but – and this is more important – the people who made those statements believe them to be true, which means they fall short of the dictionary definition of a lie: “An assertion of something known or believed by the speaker to be untrue with intent to deceive.“ There is simply no factual basis – and no excuse – for calling them lies.

PolitiFact’s Lie of the Year award has proven as  conducive to civil discourse as Rep. Joe Wilson’s, R- S.C., dyspeptic “You lie!” outburst during one of President Obama’s previous addresses to Congress. Rather than continue to poison the well by dispensing another award this year, PolitiFact should just let it lie.

PolitiFact should also revisit its evaluations of those two claims.