Tag: ppaca

Anti-Universal Coverage Club in the Washington Post

Ezra Klein:

Michael Cannon, director of health-care policy at the libertarian Cato Institute, formed the “Anti-Universal Coverage Club,” whose members “reject the idea that government should ensure that all individuals have health insurance.” This attitude is now the norm within the Republican Party, even if it is rarely acknowledged so starkly.

Dear Republicans: You’re welcome.

Chief Justice Roberts Sold Out the Constitution for Less Than Wales

In the 1966 film A Man for All Seasons (an Oscar-winning adaptation of a play about the life of Sir Thomas More), an ambitious young lawyer named Richard Rich perjures himself so that the Crown can secure More’s conviction for treason.  (Sir Thomas More was the 16th-century Lord Chancellor of England who refused to sign a letter asking Pope Clement VII to annul King Henry VIII’s marriage to Catherine of Aragon and resigned rather than take an oath declaring the king to be the head of the Church of England.)  Rich is promoted to Attorney General of Wales as a reward.  Upon learning of Rich’s connivance, More plaintively asks, “Why Richard, it profits a man nothing to give his soul for the whole world … but for Wales?”

So it is with John Roberts, who like his namesake Justice Owen Roberts changed his vote on Obamacare in service to political considerations.  (That’s actually unfair to Owen Roberts because his so-called “switch in time that saved nine,” which provided the decisive vote to uphold the New Deal after years of reversals, came before FDR announced his Court-packing scheme.)

That is, at some point between the justices’ initial conference the Friday of Obamacare-argument week in late March and when the first opinions were circulated in early June, Chief Justice Roberts changed from striking down the individual mandate, and with it the whole law, to upholding on the flimsy reed of the taxing power.  Roberts’s opinion rewriting the law “construing” the mandate as a tax is unconvincing, to say the least – even the liberal justices weren’t so enthusiastic about it, though they were happy to go along with any ratification of federal power – but it’s now apparent that he was simply grasping at any way to uphold Obamacare while not expanding the Commerce Clause.

There are many theories on why he did this – I don’t think it’s because Jeffrey Rosen wrote an op-ed, or even because President Obama and Senator Pat Leahy (D-VT) made speeches – but they mainly boil down to the idea of wanting to preserve the Supreme Court’s reputation as an impartial arbiter, one that doesn’t get involved in highly charged political disputes during a presidential election year.

Now, let’s set aside the issue of whether Roberts’s split-the-baby opinion actually helps the Court’s institutional integrity – some polls already show a decline in approval for the Court from what was already a near-historic low – and consider why this sort of reputation-preservation matters and whether it’s worth torturing the law to accomplish it.  The way I see it, the federal judiciary (with the Supreme Court at its apex) is our system of government’s premier counter-majoritarian institution, holding the political branches’ feet to the constitutional fire.  Courts are supposed to decide the law and let the political chips fall where they may.  Implicit in the Constitution’s careful separation of powers –and made explicit in the foundational case of Marbury v. Madison – is the idea of judicial review, that federal courts have the obligation, when “cases or controversies” are brought before them, to review them against the Constitution and, if they go beyond enumerated federal power or violate protected rights, to strike them down.

That’s why it’s so important that courts be independent and free from political pressure.  Particularly with regard to major controversies that polarize the nation, courts – and especially the Supreme Court – need their reputation for dispassionate and independent legal reasoning so that their often unpopular opinions are followed and respected, rather than fomenting resistance and revolution.

The health care cases – or Health Care Cases, as they may become known – presented nothing if not one such singular moment.  People across the country were anxiously awaiting a ruling, and would have accepted (if bitterly) a 5-4 decision on Commerce Clause grounds.  I obviously think that upholding the mandate, and with it the rest of Obamacare, would have been wrong – and unpopular.  Striking it down would similarly have provoked heated and fervent criticism, albeit only from the minority of Americans (but a majority of legal and media elites) who support the law.  But in any event, the Court’s decision would have “simply” been a very high profile legal ruling, just the sort of thing for which the Court needs all that accrued institutional respect and gravitas.

What we have instead, however, is a political decision dressed up in legal robes, judicially enacting a law Congress did not pass and would not have passed, all to “save” the Court to live to fight another day.  But what is that other day?  I just don’t understand what Roberts is saving the Court for if not the sort of big, tough case that Obamacare exemplified.

In short, John Roberts, in refraining from making that hard balls-and-strikes call he discussed at his confirmation hearings, has sold out his legal soul for even less than Wales.

Relatedly, Cato’s forum on the Obamacare ruling is about to start.  You can watch it live.

Is the Individual Mandate a Tax?

From my 2010 paper “Obama’s Prescription for Low-Wage Workers; High Implicit Taxes, Higher Premiums”:

President Obama argues that a legal requirement for individuals to purchase health insurance is not a tax. Yet many economists, including some of President Obama’s economic advisers, consider it to be a type of tax.

Princeton University health economist Uwe Reinhardt writes, “[Just because] the fiscal flows triggered by [the] mandate would not flow directly through the public budgets does not detract from the measure’s status of a bona fide tax.”

MIT health economist Jonathan Gruber writes, “Suppose … the government mandated that everyone buy full insurance at the average price… . This would not be a very attractive plan to careful consumers … who could view themselves as essentially being taxed in order to support this market, by paying higher premiums than they should based on their risk.”

President Obama’s National Economic Council chairman Larry Summers writes, “Essentially, mandated benefits are like public programs financed by benefit taxes.”

Sherry Glied, President Obama’s appointee to assistant secretary for planning and evaluation at the Department of Health and Human Services, writes, “The individual mandate … is in many respects analogous to a tax. It requires people to make payments for something whether they want it or not.”

When the Clinton administration proposed an individual mandate in 1993, the CBO went so far as to treat the mandatory premiums that Americans would pay as federal revenues and include them in the federal budget. So far, the CBO has not done the same for the mandates in the House and Senate bills. (As Reinhardt suggests, that does not imply that those mandates are not a tax.)

Each bill would also impose penalties on individuals (and employers) who do not comply with the health-insurance mandates. Those penalties would be paid to the Internal Revenue Service along with one’s income taxes.

“Conservatives’ Last Legal Option to Invalidate Obamacare”

The New Republic reports on an issue that Jonathan Adler and I have been highlighting: an IRS rule that will tax employers and subsidize private health insurance companies without congressional authorization. Why would the IRS issue such a rule? Perhaps because ObamaCare could collapse without it.

The post quotes another law professor who acknowledges the Obama administration faces a serious problem:

“It’s fairly decent textual case,” says Kevin Outterson, a professor at Boston University Law School, and health care blogger for The Incidental Economist. And if it stood, he says, the consequences could be disastrous.

Disastrous for ObamaCare, that is. But as Adler and I have written previously, if  saving ObamaCare means letting the IRS tax employers without congressional authorization, then ObamaCare is not worth saving.

‘The IRS Overstepped Its Bounds and Lacked the Power to Rewrite the Law’

Of course, that is just Reuters paraphrasing me:

Under the new healthcare law, individuals can shop and purchase health insurance through government-created exchanges. If a state refuses to set up its own exchange, the law allows the federal government to set one up instead. Due to a glitch in the original statute, individuals are only eligible for a tax credit if they buy insurance through a state exchange, not a federal one. That allows states to disrupt the system by refusing to set up their own exchanges. To fix this technical problem, the Internal Revenue Service issued a new rule, making the tax credit available for people who purchase insurance on federal exchanges. Conservative watchdogs, including Michael Cannon of the Cato Institute, say the IRS overstepped its bounds and lacked the power to rewrite the law. While no lawsuit has been filed yet, “we’re watching the whole exchange issue now,” said Diane Cohen of the Goldwater Institute.

One addition and three corrections.

  1. By spending that money illegally and issuing those illegal tax credits, the IRS is also triggering an illegal tax against employers (i.e., ObamaCare’s employer mandate).
  2. It’s not a “glitch.” It is a deliberate design feature.
  3. When the IRS lacks statutory authority to tax people or spend taxpayer dollars, but does both anyway, that lack of authority is not “technical problem.” It is called “taxation without representation.” And it is a very bad thing.
  4. I am not a conservative.

Maryland’s, Um, Enthusiasm for an ObamaCare Exchange

The Washington Post reports, “Few states have been as enthusiastic about the Affordable Care Act as Maryland.” For example, Maryland Lt. Gov. Anthony G. Brown (D):

We regulate markets. We have never created markets…

I’m confident we will be successful, but it doesn’t come without a healthy dose of concern that when this thing goes live, it will do what it is intended to do.

Odd way to express enthusiasm, really.