Tag: Obamacare

Ask Kagan about ObamaCare

Senate Judiciary Committee members should be sure to ask Solicitor General and Supreme Court nominee Elena Kagan, during her upcoming confirmation hearings, whether she or her office played any part in crafting ObamaCare or the administration’s defense to the lawsuits challenging that law.  If Kagan helped to craft either, that would present a conflict of interest: when those lawsuits reach the Supreme Court, she would be sitting in judgment over a case in which she had already taken sides.

Though the Solicitor General deals with appellate matters, it is certainly possible that Kagan was consulted during the drafting of the law or the administration’s legal strategy for defending it.

The Senate Democrats who drafted ObamaCare took pains to protect it from a constitutional challenge.  The law contains several pages of findings designed to show that the Constitution’s commerce clause authorizes Congress to force Americans to purchase health insurance.  It would have been prudent for Senate Democrats to ask the government’s top appellate lawyer, who belongs to the same political party, whether they had done all they could to protect the “individual mandate” from a constitutional challenge.

Opponents began filing legal challenges to ObamaCare just minutes after President Obama signed it into law, and seven weeks before he announced Kagan’s nomination.  On Tuesday, the Obama administration filed its first response, to a private lawsuit.  According to the Associated Press, that filing “is to be followed in coming weeks and months by federal government court responses to lawsuits filed by many states.”  Regarding the case filed by 13 (soon to be 20) state attorneys general, The New York Times reports, “Some legal scholars, including some who normally lean to the left, believe the states have identified the law’s weak spot and devised a credible theory for eviscerating it.”  It is not certain, but it is certainly possible that the Office of the Solicitor General was consulted on the government’s response to lawsuits that would likely reach the Supreme Court.

If Kagan played a role in drafting ObamaCare or formulating the administration’s legal defense, and is confirmed by the Senate, propriety would dictate that she recuse herself from any challenges to that law that reach the high court.  Supporters and opponents alike should be interested to know whether the Court will judge ObamaCare with nine justices on the bench, or eight.

A Response to Jonathan Gruber on ObamaCare & Health Care Costs

In this week’s New England Journal of Medicine, MIT health economist and Obama administration consultant Jonathan Gruber responds to claims that ObamaCare will increase health care costs.  Gruber acknowledges the Obama administration’s estimates that ObamaCare will increase health care spending, but compares that to the administration’s estimate that 34 million otherwise uninsured U.S. residents will obtain coverage under the law:

[B]y 2019, the United States will be spending $46 billion more on medical care than we do today. In 2010 dollars, this amounts to only $800 per newly insured person — quite a low cost as compared (for example) with the $5,000 average single premium for employer-sponsored insurance.

What a bargain!  Of course, Gruber is being sneaky.  The cost per newly insured person is not $800.  It will be higher than $5,000.  But only $800 of that cost will appear as new health care spending.  The rest of that cost will be borne largely by people who already had coverage, but find their access to care reduced.  These include Medicare enrollees who will receive fewer benefits through (or who will be ousted from) their private Medicare plans; Medicare enrollees who will have a harder time accessing care because some hospitals, skilled nursing facilities, home health agencies and other providers “might end their participation in the program,” according to the Obama administration; and maybe even some (currently) privately insured people who find themselves in Medicaid.  (The administration itself says it is “probable” that ObamaCare “could result…in some of this demand being unsatisfied.”)  Other costs include the economic growth and opportunity that is destroyed by ObamaCare’s tax increases, and the costs associated with trapping workers in low-wage jobs.

And that’s if everything goes as planned.  Gruber remains convinced that future Congresses will not undo ObamaCare’s tax increases or downward adjustments to Medicare’s price controls, as Congress has consistently undone scheduled reductions in the prices that Medicare pays physicians.  Gruber’s sometime employer – the Obama administration – itself contradicts his argument when it writes that the bulk of those reductions in Medicare spending are “doubtful” and “unrealistic.”  Gruber inadvertently shows why critics are right to be skeptical about the tax increases and spending reductions when he writes:

The cuts in spending and increases in taxes are actually “back-loaded,” with the revenue increases rising faster over time than the spending increases, so that this legislation improves our nation’s fiscal health more and more over time.

The fact that the austerity measures had to be backloaded is a sign of their implausibility.  If they were popular, they could take full effect tomorrow.  But their implementation had to be delayed to head off significant political resistance – resistance that will express itself between now and when those austerity measures take effect.

On the broader issue of reducing the growth of health care spending, Gruber claims that ObamaCare “cautiously pursue[s] many different approaches toward cost control and stud[ies] them to see which ones work best.” Yet each approach is all but guaranteed to fail. The tax on high-cost health plans? Unlikely to survive. (But at least Gruber now admits it is a tax.)  The rationing board designed to curtail each congresscritter’s ability to keep the money flowing to health care providers in their districts? Also unlikely to survive, for obvious reasons.  Pilot programs experimenting with different government price and exchange controls? Even successful pilot programs get nixed.  Comparative-effectiveness research?  A pipe dream that fails every time the government tries it.

To the extent that these spending cuts fail to materialize, health care spending will rise, and deficits will deepen. Congress will need to impose additional tax increases, and/or find sneakier ways to ration medical care curb health care spending.  Gruber’s Massachusetts enacted ObamaCare four years ago, and that’s exactly what state officials are doing.

Since President Obama signed this law, the Congressional Budget Office has announced that its cost, including the so-called “doc fix” and spending subject to appropriations, is already about $200 billion higher than previously believed.  As I’ve written elsewhere:

ObamaCare would create new constituencies for government spending, hook existing constituencies on even more government spending, and promise implausible cuts in existing subsidies to constituencies that are highly organized and vocal.

Gruber gets chutzpah points for arguing that the same law would actually contain health care costs.

NYT: Attorneys General Advance “a Credible Theory for Eviscerating” ObamaCare

The New York Times‘ Kevin Sack reports on the legal challenge to ObamaCare’s individual mandate launched by 20 state attorneys general:

Some legal scholars, including some who normally lean to the left, believe the states have identified the law’s weak spot and devised a credible theory for eviscerating it…

Jonathan Turley, who teaches at George Washington University Law School, said that if forced to bet, he would predict that the courts would uphold the health care law. But Mr. Turley said that the federal government’s case was far from open-and-shut, and that he found the arguments against the mandate compelling.

“There are few cases in the history of the court system that have a more significant assertion of authority by the government,” said Mr. Turley, a civil libertarian who acknowledged being strange bedfellows with the conservative theorists behind the lawsuit. “This case, more than any other, may give the court sticker shock in terms of its impact on federalism.”

Supporters claim the individual mandate will pass muster with the Supreme Court because in the past the Court has declared that the U.S. Constitution’s interstate commerce clause authorizes Congress to regulate non-commercial activity that affects interstate commerce. Sack writes:

Lawyers for the government will contend that, because of the cost-shifting nature of health insurance, people who do not obtain coverage inevitably affect the pricing and availability of policies for everyone else. That, they will argue, is enough to satisfy the Supreme Court’s test.

But to [the attorneys’ general outside counsel David] Rivkin, the acceptance of that argument would herald an era without limits.

“Every decision you can make as a human being has an economic footprint — whether to procreate, whether to marry,” he said. “To say that is enough for your behavior to be regulated transforms the Commerce Clause into an infinitely capacious font of power, whose exercise is only restricted by the Bill of Rights.”

Sack’s article contains an inaccuracy.  He writes:

Congressional bill writers took steps to immunize the law against constitutional challenge…They labeled the penalty on those who do not obtain coverage an “excise tax,” because such taxes enjoy substantial constitutional protection.

In fact, the law uses the term “excise tax” several times, but never in reference to the penalty for violating the individual mandate.  It describes that penalty solely as a penalty.  (The law does refer to the penalty for violating the employer mandate as a tax, but not an excise tax.)

As my Cato colleague Randy Barnett explains, that means supporters cannot reasonably claim that the individual mandate’s penalty is a tax, because that’s not what Congress approved.  As Cato chairman Bob Levy explains, even if supporters do claim that penalty is a tax, it would be an unconstitutional tax, because it does not fit into any of the categories of taxes the Constitution authorizes Congress to impose.

The “substantial constitutional protections” afforded to excise taxes do not protect the individual mandate.

The Faux Compassion of Club Sarkozy

Shortly after President Obama signed his health care law, French president Nicolas Sarkozy offered this backhanded compliment to the United States: “Welcome to the club of countries that does not dump its sick people.

In this month’s Diplomat magazine (U.K.), I explain pourquoi c’est fou:

Every member of Sarkozy’s “club” has its stories of sick people who have been “dumped,” in one manner or another, despite laws that officially preclude such things from ever happening. In 2005, Canada’s Supreme Court wrote of its country’s Medicare system: “Access to a waiting list is not access to healthcare…[T]here is unchallenged evidence that in some serious cases, patients die as a result of waiting lists for public health care.” The British, meanwhile, often seem more content to let the National Health Service shortchange its patients than to let an American lecture them about how often it happens.

The checkered history of government guarantees is why so many Americans – a majority, in fact – oppose President Obama’s new law, which they believe will move the United States even further from Sarkozy’s ideal world than it is now.

Presidents Obama and Sarkozy may prefer the false compassion of a government guarantee.  I’ll take the real thing.

Repeal the bill.

Obama vs. Common Sense

President Obama delivered a commencement speech at the University of Michigan in Ann Arbor on Saturday.

He called on all Americans “to maintain a basic level of civility in our public debate.”  Who could argue? Yet the president apparently believes that civility means protecting his policies from valid criticism.

He instructed graduates that “the practice of listening to opposing views is essential for effective citizenship.”  Right again.  But the civics lesson rings hollow coming from a president who falsely claimed there was “no disagreement” over his massive “stimulus” bill, and that opponents of his health care takeover offered no proposals of their own.

He explained, “what we should be asking is not whether we need ‘big government’ or a ‘small government,’ but how we can create a smarter and better government.”  Which is pretty much what every politician says when he wants big government and voters want small government.

Most troubling was this: “What troubles me is when I hear people say that all of government is inherently bad.”  That remark reminded me of this passage from Thomas Paine’s Common Sense: “Government, even in its best state, is but a necessary evil.” And it has me thinking that our president, a former constitutional law professor, who just received an honorary Doctor of Laws degree from the University of Michigan, really doesn’t get the American idea of government. At all.

Constitution Offers No Haven to ObamaCare’s Individual Mandate

With multiple lawsuits challenging the constitutionality of ObamaCare’s “individual mandate,” the law’s backers have proffered two principal arguments in its defense.  First, they claim that Congress has the power to require U.S. residents to purchase health insurance under the Constitution’s grant of power “to regulate Commerce…among the several States.”  Second, they claim the measure is authorized by the taxing power.

Regarding the commerce power, Cato senior fellow Randy Barnett explains in yesterday’s Wall Street Journal:

[T]he Court has never upheld a requirement that individuals who are doing nothing must engage in economic activity by entering into a contractual relationship with a private company. Such a claim of power is literally unprecedented.

Barnett also explains that the text of the law precludes ObamaCare’s defenders from claiming that the individual mandate is authorized by the taxing power.  The individual mandate defines a minimum level of coverage and then imposes a penalty on people who do not purchase such coverage.  Barnett notes that the law invokes the commerce power (not the taxing power) to justify the mandate, and refers to the penalty for non-compliance as a “penalty” (not a tax):

In short, the “penalty” is explicitly justified as a penalty to enforce a regulation of economic activity and not as a tax. There is no authority for the Court to recharacterize a regulation as a tax when doing so is contrary to the express and actual regulatory purpose of Congress.

At National Review Online, Cato chairman Bob Levy explains, “even if the penalty for noncompliance is deemed to be a tax rather than a fine, it does not meet the constitutional requirements for income, excise, or direct taxes,” and would be an unconstitutional tax.

That leaves ObamaCare’s supporters to defend the individual mandate as an (unprecedented) use of the commerce power.  Barnett writes:

Are there now five justices willing to expand the commerce and tax powers of Congress where they have never gone before? Will the Court empower Congress to mandate any activity on the theory that a “decision” not to act somehow affects interstate commerce? Will the Court accept that Congress has the power to mandate any activity so long as it is included in the Internal Revenue Code and the IRS does the enforcing?

Yes, the smart money is always on the Court upholding an act of Congress. But given the hand Congress is now holding, I would not bet the farm.

Levy concludes, “Legal refinements aside, the insurance mandate is an affront to personal liberty that will exacerbate our health-care problems. For those who care, it’s unconstitutional as well.”

Columbus Dispatch: ObamaCare = Malpractice

Popular discontent with ObamaCare extends even so far as the traditionally left-of-center Columbus Dispatch editorial page:

Almost daily, the ill effects of the health-care overhaul passed by Congress last month are becoming apparent. As employers and government bureaucrats analyze the law’s effect on bottom lines for the private sector and for government, the alarm bells are ringing.

The tragedy is that these ill effects could have been and should have been calculated before the law was passed, not after.

In fact, many of them were prophesied before passage of the bill, but the prophets were ignored by President Barack Obama and the Democratic majority in Congress. That’s because their uppermost goal was not to pass the best health-care bill possible but merely to pass anything that could be called “health-care reform” and could be claimed as a political victory by a president desperate for one.

The latest analysis of the bill’s likely effects comes from the Office of the Actuary in the federal Centers for Medicare and Medicaid Services. The report by Chief Actuary Richard S. Foster says that, far from reducing the cost of health care, the overhaul will add $311 billion to the nation’s health-care costs over the first decade the law is in effect…

As the weeks roll by, more and more unintended and should-have-been-anticipated consequences of this ill-conceived law will be revealed.

This should be no surprise, considering that the law was slapped together behind closed doors without proper testimony and vetting by health-care, financial and insurance experts, and is a patchwork of political and special-interest deals rammed through Congress using procedural gimmicks.

The nation deserved something much, much better than this.

Read the full editorial.  Repeal the bill.