Tag: Obamacare

Federal Court Declares ObamaCare’s Individual Mandate Unconstitutional

ObamaCare has always hung by an absurdity.  ObamaCare supporters claim that the Constitution’s words “Congress shall have the Power…To regulate Commerce…among the several States” somehow give Congress the power to compel Americans to engage in commerce.  This ruling exposes that absurdity, and exposes as desperate political spin the Obama administration’s claims that these lawsuits are frivolous.

This ruling’s shortcoming is that it did not overturn the entire law.  Anyone familiar with ObamaCare knows that Congress would not have approved any of its major provisions absent the individual mandate.  The compulsion contained in the individual mandate was the main reason that most Democrats voted in favor of the law.  Yet the law still passed Congress by the narrowest of all margins – by one vote, in the dead of night, on Christmas Eve – and required Herculean legislative maneuvering to overcome nine months of solid public opposition.  The fact that Congress did not provide for a “severability clause” indicates that lawmakers viewed the law as one measure.

Despite that shortcoming, this ruling threatens not just the individual mandate, but the entire edifice of ObamaCare.  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.  Knock out any of those three legs, and whole endeavor falls.

Moreover, the individual mandate is not the law’s only unconstitutional provision.

These lawsuits and the continuing legislative debate over ObamaCare are about more than health care.  They are about whether the United States has a government of specifically enumerated powers, or whether the Constitution grants the federal government the power to do whatever the politicians please, subject only to a few specifically enumerated restraints.  This ruling has pulled America back from that precipice.

Is Congress Above the Law?

The first item on this election campaign’s Contract with America was that, if elected (as they have been), the House Republicans would require that all laws that apply to the rest of the country also apply to Congress.  We’ll see if that and the other promised reforms materialize, but it does raise yet another issue in the context of Obamacare.

As my colleague Michael Cannon pointed out to me, the new health care law kicks congressmen out of the Federal Employees Health Benefits Program.  (The current FEHB is no different from the health coverage provided by any private employer -– federal employees choose from a series of private plan options (none of which is run by the government), and receive a subsidy from the federal government acting in its role as an employer.)

My first reaction to hearing this was:  Good – if the rest of us lose our health care freedom, so should those who forced this new atrocity on us.  But apparently this result was not intended, so the Obama administration has decided to ignore that part of the law.

No joke.  Here is the Congressional Research Service report on the provisions that oust members of Congress from their health insurance.  And here is the letter in which an Obama appointee announces that the administration will ignore the law.  These two articles also provide important information.

Now, assuming that something constitutionally problematic is going on here, what can anyone do about it?  To put it in legal terms, who has standing to sue for this apparent constitutional violation?  It’s a tough row to hoe – taxpayers cannot bring suit based on generalized grievances – but off the top of my head, I can think of two possibilities: (1) members of Congress suing the president or the Department of Health and Human Services for essentially passing new law and therefore infringing on congressional prerogatives (thereby violating the separation of powers); or (2) an insurance broker or carrier who would otherwise be signing up new clients.

And there are two additional related questions:

1. Why did Congress expand Medicaid while refusing to participate in it themselves?  Obamacare expanded Medicaid to an estimated 18 million new Americans, none of whom will have a choice of private plans, instead being dumped into Medicaid, a program notorious for access problems (and which in Arizona now doesn’t cover organ transplants).  Yet all Senate Democrats voted against an amendment enrolling members of Congress in the new Medicaid program (all Republicans voted for it, except one who was absent).

2. Will members of Congress use their own salaries to pay any fines assessed because their employees have “unaffordable” health coverage?  Obamacare includes a $2,000 per worker penalty for any employer that does not provide “affordable” coverage, beginning in 2014.  Many junior staffers have incomes below 400 percent of the federal poverty level ($43,320 for a single person, or $88,200 for a family of four), and thus could be subject to the new statutory test of whether their health insurance options are “affordable.”  While it’s unclear how this particular provision will be implemented for Hill staff – due to the “significant unintended consequences” of sloppy drafting – it’s entirely possible that member offices could be assessed a $2,000 penalty for every worker needing insurance subsidies because they have no “affordable” alternative.  If that scenario happens, will the members of Congress who voted for the law pay the penalty out of their own salaries or will they rely on taxpayer funds to finance an obligation they imposed on themselves?

How to Tell When ObamaCare Supporters Are Nervous

Supporters have gone to great lengths to make ObamaCare appear popular or to make repeal seem impossible.  But this op-ed by my friend Jonathan Cohn made my jaw drop.

First, Cohn notes that the Senate recently voted down two efforts to repeal one of ObamaCare’s more unpopular provisions: the “1099 reporting tax,” which will place an enormous burden on small businesses.  ”Neither provision,” Cohn obliquely reports, “got enough votes to pass.”  He concludes:

Critics of health care reform [sic] this week thought they would get their first win in the campaign to repeal the Patient Protection and Affordable Care Act. Instead they got a lesson in just how politically challenging a wholesale repeal might be.

If opponents can’t even repeal the unpopular parts of ObamaCare, how can they repeal the whole thing?

Cohn neglects to mention a few important details.  The reason neither amendment received “enough votes” is because, due to procedural considerations, each would have needed a 2/3 majority to pass – i.e., 67 votes.  The Republican amendment actually received 61 votes.  (The Democratic amendment received only 44 votes.)  Reading Cohn’s account, though, you might think – and Cohn might think, or just want you to think – that both failed because they lacked majority support.  In fact, the Republican amendment received a filibuster-proof majority.  Even though it included $19 billion of spending cuts.  And in a chamber with only 41 Republicans.  (Another six arrive next month.)  And the mere fact that Democrats offered an amendment to repeal part of ObamaCare is notable in itself.  Cohn’s spin aside, the skirmish over the 1099 reporting tax shows that Democrats are divided and ObamaCare supporters are on the run.

Second, Cohn writes, “advocates of repeal have one extra liability that the law’s architects did not – a lack of majority support even before the wrangling begins.”  As evidence, he cites a single Gallup  poll from July 2009 that found 50 percent of the public supported “comprehensive health care reform.”  Oy, where to begin.  First, by Cohn’s own single-poll standard, he is just flat wrong.  Advocates of repeal can point to the latest Rasmussen poll, which shows that 58 percent of adults support wholesale repeal.  (Polls have clocked support for repeal as high as 61 percent.)  Second, support for “comprehensive health care reform” is not the same thing as support for ObamaCare.  If Gallup were to ask Cato employees whether they support comprehensive health care reform, my guess is that at least 50 percent would answer yes.  (Presumably, Cohn would then write an oped titled, “Even Libertarians Support ObamaCare!”)  Advocates of repeal have something else going for them, too: 17 months of consistent public opposition to ObamaCare.

No one is saying that getting repeal through the Senate is likely in the next two years.  But the fact that supporters have to shade the truth like this suggests they are nervous.

Virginia Obamacare Lawsuit Dismissed

No, not the lawsuit brought by Virginia Attorney General Ken Cuccinelli (in which Cato has been filing amicus briefs), but rather one brought by Jerry Falwell’s Liberty University.  Most notably, the district judge found the individual mandate to be a lawful exercise of Congress’s powers under the Commerce Clause because

individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market….  Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.

This analysis echoes that of the Michigan judge who granted the government’s motion to dismiss the Thomas More Legal Center’s lawsuit in October – and is fatally flawed because everything is an “economic decision” that “substantially affects the national market” in something.  If that’s the rationale upon which the Supreme Court ultimately upholds Obamacare, then we are left quite literally with no principled limits on federal power.  Something tells me it won’t be so simple, however, even if the forces of darkness big, “self-checking” government prevail.

Nevertheless, the White House blog is understandably delighted with such rulings, trumpeting yesterday’s decision as yet another on an inexorable and inevitable march to the full vindication of an unprecedented assertion of federal power.  (Question: Was nobody there paying attention to what voters said about all that November 2?)

In any event, as I said in a recent blog post and op-ed, nobody should yet declare victory or concede defeat.  There will be many, many rulings yet, both at the trial court level and on appeal.  This will not end until the Supreme Court rules, most likely in June 2012.  But if you’re keeping track, the next major event is a December 16 summary judgment hearing in Pensacola in the Florida-led 20-state lawsuit – and we should also soon see a final ruling from the Cuccinelli case right before or after Christmas.  Expect the White House to be a bit less chipper about these events.

First Amendment Victory in Second Circuit

As the legal battle against Obamacare continues, we got good constitutional news today in another aspect of health care law.  The Second Circuit Court of Appeals, based in New York City, ruled that statutes restricting commercial speech about prescription drug-related data gathering are unconstitutional.  The court emphasized that the First Amendment protects “[e]ven dry information, devoid of advocacy, political relevance, or artistic expression.”

The case, IMS Health v. Sorrell, concerned a Vermont law that sought to constrain various aspects of prescriber-identifiable data gathering, dissemination, and use. The state argued that such information collection and exchange could induce doctors to alter their prescribing practices in ways that impose additional costs on the state’s budget. Most notably, the law outlawed the transfer of doctors’ prescription history to facilitate drug companies’ one-on-one marketing—a practice known as “detailing” —because the state believed detailing drives up brand-name drug sales and, in turn, health care costs.  Thus, the Vermont law would have eliminated a key part of the market by hindering economic incentives to comprehensively gather the data. The state argued that the data sharing isn’t “traditional journalistic activity,” it’s not protected by the First Amendment.

Cato joined the Pacific Legal Foundation, the Progress & Freedom Foundation, and two trade associations to file an amicus brief in the case in support of the plaintiffs challenging the law. The Vermont Prescription Restraint Law (and the similar laws enacted in New Hampshire and Maine) imposed unprecedented censorship on a broad swath of socially important information. We are gratified that the Second Circuit upheld First Amendment protections here and congratulate the plaintiffs on their victory.

You can read Cato’s brief here and the Second Circuit’s decision here.

ObamaCare’s ‘Medical Loss Ratio’ Regs Encourage Fraud, Unnecessary Medical Services

Yesterday, the U.S. Department of Health and Human Services issued regulations implementing ObamaCare’s rule mandating that health insurers maintain minimum “medical loss ratios.”

Opponents of private health insurance have made a fetish of  MLRs – a statistic that insurers developed to show investors the share of premiums they spend on claims.  (“See? They call it a ‘loss’ when they pay for medical care – that proves they’re evil!”)  So the opponents of private health insurance who crafted ObamaCare included a rule requiring carriers to spend at least 80 percent of premium revenue (large employers must spend 85 percent) on “your health care.”  What could possibly go wrong?

The folly and false compassion of ObamaCare are on full display in the MLR regs, where government bureaucrats have evidently determined that unnecessary and harmful medical services, and even insurance fraud, are in fact good for patients. Okay, HHS bureaucrats don’t actually think that. But ObamaCare’s MLR regs include fraud prevention and utilization review among the administrative expenses on which carriers may spend no more than 20 percent of revenue (15 percent for large employers). That will effectively discourage insurers from policing fraud and conducting utilization reviews that protect patients from the expense and risks of unnecessary medical tests and procedures.

ObamaCare’s fatal conceit is that government bureaucrats can determine and deliver what is good for patients. Consumers will continue to feel the pain – costs will continue to rise and more insurers will flee the marketplace – until Congress gives up that conceit and repeals this law.

RomneyCare’s ‘Connector’ a ‘Legal Pit Bull’ Forcing Fed-Up Mass. Residents to Pay

According to the Boston Herald:

The state’s health insurance connector — the highly touted agency that aims to bring cheap medical care to the masses — has turned into a legal pit bull by aggressively going after a growing number of Bay Staters who say they can’t afford mandated insurance — or the penalties imposed for not having it.

The Commonwealth Health Insurance Connector Authority is cracking down on more than 3,000 residents who are fighting state fines, and has even hired a private law firm to force the health insurance scofflaws to pay penalties of up to $2,000 a year.

All told, more than 7,700 people have appealed state fines for not having health insurance, according to connector spokesman Richard Powers. The agency has hired several private attorneys at $50 an hour to hear many of the appeals, and some 3,150 of them have been denied — and the losers told to pay up.

The connector has also hired the Hub law firm Bowman & Penski — at $125 an hour — to defend itself against 13 lawsuits filed by fed-up taxpayers who insist they can’t afford state required insurance premiums or the escalating fines.

For more on RomneyCare, see “The Massachusetts Health Plan: Much Pain, Little Gain.”