Topic: Health Care & Welfare

The Court Revisits Obamacare

Obamacare’s legal troubles were far from ended when Chief Justice Roberts ruled in 2012 that the law’s “penalty” for failing to buy health insurance was really a “tax,” purportedly rendering the Act constitutional under Congress’s power to tax, even though neither he nor anyone else could say whether the Constitution recognized or allowed so sui generis a tax.

So far is the litigation from over, in fact, that if you’re planning a legal challenge to Obamacare, you’ll have get in line. Two of those in line got good news today: The Supreme Court has agreed to hear their challenges. Both concern Obamacare’s mandate that employer provided health insurance policies cover such things as sterilization, contraceptives, and abortifacients, even in the face of an employer’s religious objections. In Sebelius v. Hobby Lobby Stores, Inc. the U.S. Court of Appeals for the Tenth Circuit ruled for the individual employer. In Conestoga Wood Specialties Corp. v. Sebelius the U.S. Court of Appeals for the Third Circuit ruled against the corporate employer. At issue are both constitutional and statutory claims under the Religious Freedom Restoration Act (RFRA).

Ilya Shapiro has discussed the issues more fully here. And earlier on I had a short post on the subject here. The Court will likely hear oral argument in March. Maybe the website will be running by then.

FDA Moves To Crush 23andMe

23andMe is a service that combines a home-based saliva testing DNA-sample kit combined with a web-based service to explain what the results mean and put you in touch with other users. At $99, it’s a breakthrough hit in affordable personal technology – and now the Food and Drug Administration is determined to snuff it out. I discuss this appalling development in a new post at Overlawyered: 

…Some of us want to seek out distant relatives and clues about national origins, or satisfy curiosity about patterns of disease in our family lines. For adoptive families, home genome testing can be hugely valuable in cases where one knows little about the medical history of an adoptee’s birthfamily. It’s our body, and our right to inform ourselves about it — or so we thought.

The FDA very likely has decent legal grounds to forbear from a crackdown should it choose to. But the key takeaway sentence from Matthew Herper’s piece in Forbes criticizing the company is: “This is not the way to deal with a powerful government regulator.” Disrespectful, anti-authority attitudes from someone an agency intends to regulate? Ask former Buckyballs CEO Craig Zucker where that gets you. …

Science blogger Razib Khan has suggested that information services like 23andme, rather than submit to expensive and cumbersome regulation as “medical devices,” may simply pack up and move offshore. But even if they do, that won’t be the end of our government’s jealous wish to regulate them – or so I predict in my post.

P.S. Is it relevant that governments themselves, through their law enforcement agencies, run elaborate saliva-, blood- and DNA-collection operations that are hedged with few of the protections of voluntariness, privacy and openness that one finds with 23andMe?

A Conspiracy against Obamacare

A Conspiracy Against Obamacare coverLast week, A Conspiracy Against Obamacare: The Volokh Conspiracy and the Health Care Case was released, of which I am proud to be the editor. The book compiles the discussions and debates about the Affordable Care Act that occurred on the legal blog the Volokh Conspiracy, supplemented with new material. The posts are stitched together into a narrative structure. As a result, you can see the constitutional arguments against the Affordable Care Act develop in real time, from before the law was passed all the way to the Supreme Court. 

The book documents a bellwether moment in the history of legal academia: A legal academic blog influencing major Supreme Court litigation. And not just major Supreme Court litigation, but a case that went from a much derided challenge to the biggest and most watched case in decades. As former Solicitor General Paul D. Clement, who expertly argued the case before the Court, kindly wrote in the foreword, “The Constitution had its Federalist Papers, and the challenge to the Affordable Care Act had the Volokh Conspiracy.”

The contributors are Randy E. Barnett, Jonathan H. Adler, David E. Bernstein, Orin S. Kerr, David B. Kopel, and Ilya Somin, most of whom are closely associated with Cato in one way or another.

In the introduction, I discuss the constitutional arguments against the law in a more abstract way, as well as describe how the law is destined to fail due to poor design. We are seeing the beginning of those failures now, but I fear we ain’t seen nothin’ yet.

It was not much commented on at the time–the administration and the law’s supporters were too busy spiking the ball–but the Supreme Court’s decision will speed up the law’s inevitable failures. As I describe in the introduction:  

Due to the chief justice’s unpredictable opinion, we are now likely stuck with a law that I fear will seriously damage the health of Americans. What’s more, attempts to further centralize power will not stop at the individual mandate. When the law fails, as I predict it will, it will be said that the federal government lacked enough power to make it work. The chief justice’s opinion gives people a real choice whether to comply with the requirement to purchase insurance or pay a “tax.” Many people will not, and as the price of insurance goes up, more and more people will choose to remain uninsured. This will certainly be called a “loophole.” Similarly, the Court also gave states a choice about whether to comply with the Affordable Care Act’s Medicaid expansion. Another “loophole.” Finally, the states that don’t create health care exchanges will also throw wrenches in the law’s overall scheme. “Loopholes” all around. Having freedom of choice in deeply personal health care decisions, however, is not a loophole.

When the time comes to revisit the Affordable Care Act, those choices by free, sovereign entities (citizens and states) will be blamed for the law’s dysfunctions. To paraphrase philosopher Robert Nozick, liberty disrupts patterns. Free choice inevitably upsets the carefully crafted plans of Washington.

As a solution to the law’s problems, more power will be proposed. A few voices, such as many who write for the Volokh Conspiracy and those of us at the Cato Institute, will strenuously argue that the problem is not a lack of power but a lack of freedom. I am not optimistic, however, that very many entrenched bureaucrats and politicians will locate the problem in the mirror rather than in the freedoms of the American people.

If the Affordable Care Act keeps going south at this rate, we may need to prepare to have that debate sooner than we expected. 

Dallas Buyers Club Is a Terrific Libertarian Movie

Tim Lynch was right. Dallas Buyers Club is a terrific movie with a strong libertarian message about self-help, entrepreneurship, overbearing and even lethal regulation, and social tolerance. Matthew McConaughey, almost unrecognizable after losing 40 pounds, plays Ron Woodroof, a homophobic electrician in 1985 who learns he has AIDS and has 30 days to live. There’s lots of strong language in his denunciation of the kinds of people who get AIDS, which he certainly is not. But after doing some research, he asks his doctor for AZT, the only drug for HIV/AIDS then available, but he wasn’t eligible for the trials then in process. He turns to the black market, finds his way to Mexico, encounters a doctor who tells him that AZT is toxic and that there are better vitamins and drugs, and beats his original prognosis. As it occurs to him that there are plenty of other people in Dallas who could use these drugs, he sees an opportunity to make some money – if he can only learn to deal with gay people.

Soon he’s setting up a “buyers club,” in an attempt to evade FDA regulations on selling illegal or non-approved drugs. He’s got customers – oops, potential members – lining up. He’s on planes to Japan and Amsterdam to get drugs not available in the United States. And at every turn he’s impeded and harassed by the FDA, which insists that people with terminal illnesses just accept their fate. Can’t have them taking drugs that might be dangerous! You’ll be surprised to see how many armed FDA agents it takes to raid a storefront clinic operated by two dying men.

Here’s a Cato study on AIDS and the FDA from 1986. Here’s the original 1992 magazine story about the Dallas Buyers Club, published just before Ron Woodroof died.

Go see Dallas Buyers Club.

The Dallas Buyers Club

I have not yet seen the new movie, The Dallas Buyers Club, but it looks pretty darn interesting. Matthew McConaughey plays the true-life lead character, Ron Woodroof, a homophobic party boy who is diagnosed with HIV and is given just 30 days to live. 

When the government-approved drugs don’t help him, Woodroof does not go gently into the night (and to his grave). Instead, he travels abroad to buy medicine in other countries and on the black market and then he returns to sell them to others similarly situated here in the United States. The film evidently doesn’t gloss over the fact that he seeks a profit as he engages in these acts. (That’s a trait Woodroof shares with other human beings in the drug business, though the film does not dwell on that.) 

Agents with the Food and Drug Administration and others patiently explain to Woodruff that “unauthorized” drugs might be detrimental to his health—that’s why drug regulations were put on the law books! When Woodruff decides (all by himself—without any advanced degrees in medicine!) that he will keep operating outside the law in order to find life-saving drugs, federal officials lose patience and seek to have him arrested. That’ll be for his own good and for the betterment of all Americans.

The Woodroof story took place in 1986, but it is a cautionary tale about what happens when the government steps in and assumes the power to make health decisions for us—whether we like it or not.

For related Cato scholarship, go here, here, and here.

Film trailer below the jump:

Lindbeck’s Law: The Self-Destructive Nature of Expanding Government Benefits

Relevant foresight from Swedish economist Assar Lindbeck, “Hazardous Welfare State Dynamics,” American Economic Review, May 1995:

The basic dilemma of the welfare state …  is that the more generous the benefits, the greater will be not only the tax distortions but also, because of moral hazard and benefit cheating, the number of beneficiaries. This is a field where Say’s Law certainly holds in the long run: the supply of benefits creates its own demand… .

Serious benefit-dependency, or ‘learned helplessness’, may … emerge only in a long-run perspective. Possible examples of such gradual adjustments are an increased tendency to apply for social assistance, less job search and greater choosiness among unemployed workers, more absence from work for alleged health reasons, more applications for (subsidized) early retirement due to alleged inability to work, and more time and effort devoted to tax avoidance and tax evasion.

P.S. A 2007 empirical study by Friedrich Heinemann supported Linbeck’s hypothesis, finding that “transfer expansion or increasing unemployment tend to be associated with a larger readiness of the country’s population to cheat on benefits.”

‘There Is No Such Thing as an Individual Mandate. It’s a Tax.’

That’s what Department of Justice attorney Joel McElvain said in open court last week. And thus the Obama administration reversed itself once again on whether the individual mandate is a tax. 

Relatedly, a Clinton-appointed federal judge has dealt a second blow to the IRS and the credibility of its defenders. He called one of the administration’s arguments ‘silly,’ and promised expedited consideration of the Obamacare challenge, Halbig v. Sebelius. Read all about these in my latest Darwin’s Fool post at Forbes.com.