The Importance of the Individual Mandate — Evidence from Massachusetts
The most contentious aspect of the Patient Protection and Affordable Care Act (ACA) is the individual mandate requiring that most documented U.S. residents obtain health insurance or pay a tax penalty. Many experts have long advocated a mandate as a central pillar of private-sector–based health care reform. Others, however, have argued that a mandate is not necessary for successful reform.
Proponents of the mandate argue that it is necessary to reduce adverse selection in a reformed nongroup insurance market. Adverse selection occurs when a larger fraction of relatively unhealthy people than healthy people purchase health insurance. It is analogous to the purchase of car insurance only by high-risk drivers (or worse, only by drivers who have just had an accident). However, one of the most popular aspects of the ACA may encourage such adverse selection, since the law prohibits health insurers from discriminating against applicants on the basis of health, either by charging higher premiums for sick people or by excluding preexisting conditions from coverage. Absent other reforms, such regulations would theoretically increase premiums for healthy people and lead them to exit the nongroup insurance market, which would cause premiums to rise even more. Informal support for this hypothesis comes from the fact that the five U.S. states with such regulations (known as “community rating”) are among the states with the highest nongroup insurance premiums.1
Opponents of the mandate counter that community rating may work as long as there are large subsidies that attract healthier enrollees to the insurance pool. Such subsidies include the tax credits that the ACA authorizes for people with incomes between 133 and 400% of the federal poverty level. (The federal poverty level for a family of four is about $22,000 per year.) States with community rating do not generally offer such large subsidies, so we can’t use their experience to predict the effects of national reform minus the mandate. But understanding whether the mandate matters, even with large subsidies in place, is critical for assessing its role in reform.
The early experience with health care reform efforts in Massachusetts may offer some lessons. Massachusetts made heavily subsidized insurance available to residents with incomes below 300% of the federal poverty level for nearly a year before mandating insurance coverage. By examining the characteristics of the subsidized insurance pool before and after the mandate went into effect, we assessed how much of an additive effect the mandate had over that of simply offering subsidized, community-rated insurance.
As part of the Massachusetts reform, the Commonwealth Care program provided free insurance to people with incomes below the federal poverty level from October 2006 onward and for those with incomes below 150% of the federal poverty level from July 2007 onward. In both cases, the state automatically enrolled people who were eligible for free coverage; people in higher income groups could enroll but had to pay premiums. We therefore examined the behavior of Massachusetts residents with incomes between 150 and 300% of the poverty level, who were eligible for subsidies and had to pay insurance premiums that were meaningful but much smaller than those mandated by the ACA.
Using claims data from the Massachusetts Commonwealth Connector, we measured the health mix of the population enrolling in Commonwealth Care according to average age, average monthly health care expenditures, and the proportion of enrollees with a chronic illness. We identified enrollees as having a chronic illness if within the first 12 months after enrollment they had an office visit at which a diagnosis of hypertension, high cholesterol level, diabetes, asthma, arthritis, an affective disorder, or gastritis was recorded.2 Relying on only the first 12 months of claims ensured that our estimates of rates of chronic illness for earlier enrollees, whose claims data covered a longer period, were similar to estimates for later enrollees.
We examined these data for the period from March 2007 (the date of the first available reliable information on people with incomes in the relevant range) through June 2008 (the last month for which we could calculate our 12-month measure of chronic illness). In each month, we measured the health of the enrollees who joined the program.
We assessed the characteristics of these enrollees before, during, and after the phasing in of the mandate. Technically, the mandate went into effect on July 1, 2007. The Connector began a massive public outreach campaign in May 2007, and the number of hits on its Web site peaked around July 1. The penalty, however, was assessed on the basis of insurance coverage as of December 31, 2007. That is, people who purchased insurance in November that began in December did not have to pay the penalty, even if they had been uninsured beyond July 1. The penalty for 2007 was the loss of the individual state income tax exemption, a relatively modest $219. It increased to about $900 in 2008 and was prorated on the basis of the number of months of coverage during the year.
Characteristics of New Enrollees in Commonwealth Care, According to Enrollment Period
Number of Enrollees in Commonwealth Care, According to Chronic-Illness Status
It seems possible that even without the mandate, people with the highest health care costs would enroll first and healthier people would enroll over time. But data on the health status of new enrollees suggest that that was not the case (see graph). At the beginning of the mandate’s phase-in in mid-2007, there was a greater increase in the number of healthy enrollees than in the number of enrollees with chronic illness. When the mandate became fully effective at the end of 2007, there was an enormous increase in the number of healthy enrollees and a far smaller bump in the enrollment of people with chronic illness. The gap then shrank to premandate levels as the remaining uninsured residents complied with the mandate, but clearly the mandate brought many more healthy people than nonhealthy ones into the risk pool. The large jump in healthy enrollees that occurred when the program became fully effective suggests that enrollment by the healthy was not simply slower than enrollment by the unhealthy, but rather that the mandate had a causal role in improving risk selection.
Whether the Massachusetts experience can be generalized to the rest of the country depends in part on the relative sizes of the subsidies provided: the higher the subsidies, the smaller the role for an individual mandate. Under Commonwealth Care, adults with incomes between 150 and 200% of the poverty level were asked to contribute $35 per month. Under the ACA, their monthly contribution would be $51 to $107. At 200 to 250% of the poverty level, the monthly contributions are $70 in Massachusetts and $107 to $171 under the ACA; at 250 to 300% of the poverty level, the contributions are $105 in Massachusetts and $171 to $242 under the ACA. The larger subsidies in Massachusetts would be expected to have a greater effect in inducing healthy people to obtain insurance than the ACA’s smaller subsidies — which suggests that mandating coverage might well play an even larger role in encouraging the healthy to participate in health insurance markets nationally than it has in Massachusetts.
By: Amitabh Chandra, Ph.D., Jonathan Gruber, Ph.D., and Robin McKnight, Ph.D.-New England Journal of Medicine | This article (10.1056/NEJMp1013067) was published on January 12, 2011, at NEJM.org.
Source Information
From the John F. Kennedy School of Government, Harvard University (A.C.), and the Massachusetts Institute of Technology (J.G.) — both in Cambridge, MA; and Wellesley College, Wellesley, MA (R.M.).
References
- Rosenbaum S, Gruber J. Buying health care, the individual mandate, and the Constitution. N Engl J Med 2010;363:401-403Full Text | Web of Science | Medline
- Goldman DP, Joyce GF, Escarce JJ, et al. Pharmacy benefits and the use of drugs by the chronically ill. JAMA 2004;291:2344-2350CrossRef | Web of Science | Medline
Be Careful What You Wish For: Repeal of the Affordable Care Act Would Be Harmful to Society and Costly for Our Country
The new Republican leadership of the House of Representatives says repeal of the recently enacted Patient Protection and Affordable Care Act is their top priority. The Republicans pushing for repeal, however, conveniently ignore the enormous step backward that repeal would represent for health care in our country, for the income security of our citizens, and for the fiscal health of our government.
The Affordable Care Act is not just a law designed to cover the majority of our nation’s uninsured, moving us into the league of industrialized nations which guarantee universal health coverage for its citizens. The law also takes the crucial first steps toward reining in our runaway health care costs. It ends discriminatory insurance practices that leave many of our citizens one bad gene, or badly timed accident, away from personal bankruptcy. It does so while introducing insurance market competition that will lead to lower health insurance premiums for some, and better coverage for others, in the so-called nongroup insurance market where workers without employer-provided health insurance turn for coverage. The Affordable Care Act does all this while significantly reducing our enormous federal budget deficit over the next 10 years.
Opponents of the new health reform law claim we can have many of the beneficial features documented above while repealing the parts they don’t like. This is a misleading and dangerous assertion. In fact, virtually none of the accomplishments of the new law are possible without the entire law’s infrastructure coming into place. That’s why all of the harms of repeal documented in this issue brief below will take place if the new law were to be scuttled.
To understand the consequences of repealing the Affordable Care Act, we can turn to two sources of objective information. The first is the careful and comprehensive effort put in by the Congressional Budget Office to evaluate the law’s impacts, including their recent report summarizing the effects of repealing the new law. The second is the closest case study we have where major elements of the new federal law are already in place—the state of Massachusetts, which passed a similar reform in early 2006. So let’s now turn to the different harms repeal of the health reform would deliver up to the American people.
Repeal means more uninsured, and worse public health
The first noticeable feature of a world without the new health reform law would be the much higher share of Americans without health insurance coverage. Absent the Affordable Care Act, CBO projects that 54 million people in our country, or almost 20 percent of our nonelderly population, will be uninsured by 2019. The new law will cover 32 million of those uninsured, according to CBO, or about 60 percent, with much of the remainder undocumented immigrants who are ineligible for coverage. This is more than a projection: It is also the same percentage share of the uninsured in Massachusetts who have been covered by that state’s health reform effort.
Clearly, repeal of the new law would have enormous negative consequences for our nation’s public health. Numerous studies document the dire health implications of uninsurance. An earlier study by the Institute of Medicine estimated that, in the year 2000 (when 38 million persons were uninsured), there were 18,000 deaths per year due to uninsurance. This suggests that repealing the Affordable Care Act could lead to 15,000 more deaths per year due to higher lack of insurance.
Repeal means increased financial risk for U.S. households alongside distorted labor markets
The impact of repeal extends well beyond those households who are uninsured. Indeed, repealing the new law would reach any household who faces the risk of losing their employer-sponsored health insurance. This is because the Affordable Care Act will fix the fundamental broken system of nongroup insurance in the United States.
Currently, individuals who do not have access to employer-provided group insurance coverage face a nongroup insurance market that is discriminatory and expensive. In most states individuals can be denied insurance coverage because they are ill or have their pre-existing illnesses excluded from coverage. Individuals who become ill can face personal bankruptcy as a result. Even when nongroup insurance is available, in most states insurance is priced according to individual health, with the oldest and sickest enrollees paying many multiples of younger and healthier enrollees.
There is a fundamental unfairness to a system under which individuals can face financial ruin because they have the wrong genes, or cross the street at the wrong time, but don’t happen to have access to insurance through their employer. Moreover, such a system significantly distorts our labor markets by forcing individuals to stay in jobs that offer health insurance rather than to move to newer and more productive positions where coverage is not available. Millions of U.S. workers are not moving to better jobs for them or starting new businesses because there is nowhere to turn for insurance coverage should they leave their jobs.
The Affordable Care Act would fix this flaw in our system. Insurance companies would no longer be allowed to price discriminate or deny coverage based on health or pre-existing conditions, and price differentials by age would be lowered. Individuals would be free to move to the job of their choice or to become entrepreneurs without fear of facing uninsurance.
Repealing the new health reform law would leave us in a world of broken nongroup insurance markets, with the attendant financial risk for individuals and the continued distortion to our labor markets. Why? Because without the comprehensive framework of the new law, it is incredibly costly to make insurance fairer in nongroup markets.
If insurance companies must charge the same price to people whether they’re sick or healthy, for example, then many healthy people will view this as a “bad deal” and not buy insurance. This results in higher prices because only the sick would buy insurance, chasing even more people out of the market. The result is a “death spiral” that leads only the sick to purchase insurance at very high prices. Several states tried such community rating reforms in their non-group markets over the past two decades, and the results were sharp rises in insurance prices and rapidly shrinking market size. The only way to make insurance market reform feasible is to pair it with large subsidies to purchase insurance and an individual requirement for coverage, as is the case with the Affordable Care Act.
Direct evidence for this point comes from Massachusetts. In the late 1990s the state moved to a nondiscriminatory nongroup market, but without the subsidies and the individual requirement that are central to the Affordable Care Act. The result was a collapse of the state’s nongroup market, so that by 2006 the state had by far the highest nongroup premiums in the nation. In 2006, the state implemented their comprehensive reform, which added to the insurance market reforms extensive low-income subsidies to purchase insurance and an individual requirement for coverage. This resulted in a 40 percent reduction in nongroup premiums in Massachusetts over a period where such premiums were rising by 14 percent nationally. That’s just one reason why the new law is called the Affordable Care Act.
Repeal means a noncompetitive and expensive nongroup insurance market
Another reason the Affordable Care Act works to bring down costs is because without it, a typical health insurance policy is much more expensive in the nongroup market than in the group market, partly because nongroup insurance markets are less competitive than group insurance markets in many states. There is no common marketplace where individuals can compare the prices of all the options that are available to them in the nongroup market. As a result, existing market participants keep prices high and new firms are unable to promote lower costs as a tool of market entry.
The Affordable Care Act addresses this problem in two important ways. The first is by introducing competitive insurance exchanges in every state. Individuals would be able to shop more effectively, comparing their nongroup options in a competitive and transparent environment. This approach has already had a notable success in Massachusetts, where the introduction of the state’s Connector health insurance exchange expanded the use of nongroup insurance and promoted the entry of a major new low-cost insurer into the state’s nongroup insurance market.
Without the Affordable Care Act states are unlikely to be able to establish transformative and competitive exchanges for the purchase of nongroup insurance. Many states have tried over the past 20 years to establish insurance exchanges and they have virtually all either failed or had little impact. This is typically because insurers were afraid that individuals would choose to buy from the exchanges only if they were sick, which meant prices in the exchange were high and demand for exchange products was low. With low demand, exchanges could not establish the economies of scale necessary for success.
The success of exchanges under the new health reform law will be due to the fact that individuals will be both required to purchase insurance and that insurance purchase will be subsidized only through the exchange. This will promote exchanges on a scale necessary to succeed in promoting competition in state insurance markets.
The second way that the Affordable Care Act addresses the high costs of nongroup insurance is through the introduction of new tax credits to make health insurance affordable through the exchange. The typical middle-class family in the United States would now be provided financial support to ensure that they would not have to spend an unfair amount for the insurance they need to protect their family.
The upshot: Repealing the new law would mean returning to an era where individuals can’t effectively compare their insurance options, guaranteeing continued noncompetitive and expensive insurance in this market. And it would mean that individuals would face the full prices in these noncompetitive markets without the necessary tax credits to make insurance affordable. Repeal, in short, would be unfair, ineffective, inefficient, and costly.
Repeal means free riders would continue to exploit the health care system
Another fundamental flaw in our current health care system before passage of the Affordable Care Act was that individuals could “free ride,” remaining uninsured until they need care and then turning to emergency rooms. Emergency rooms are required by law to provide care to all regardless of insurance coverage. The associated uncompensated care costs of treating these individuals amount to a more than $40 billion a year tax on the insured in the United States
The Affordable Care Act ends this free riding by requiring that individuals purchase insurance if it is affordable for them (which it will be for most due to the subsidies described earlier). This personal responsibility requirement, originally the brainchild of Republican experts, would end the unfairness of a system where emergency room health care providers are required to treat everyone but individuals are not in turn required to pay their fair share of the costs of treatment. Repealing the new law would mean returning to a world where individuals can simply wait until they are sick to get treated, passing the costs on to the rest of society that is paying their share.
Repeal means the continued decline of private insurance
There was an enormous erosion of private insurance coverage in the United States over the past decade. Employer-sponsored insurance fell by 15 percent and nongroup insurance has not grown to keep pace. The result today is an increase in both the ranks of the uninsured and the publicly insured.
The Affordable Care Act arrests this decline and promotes private insurance coverage. According to the CBO, the new law will lead to a small erosion in employersponsored insurance coverage, offset by a rise in nongroup insurance coverage that is almost five times as large. Overall, private insurance coverage in the United States will rise by 15 million people due to the Affordable Care Act.
Repeal would provide no cushion for our citizens to offset this rapid decline in employer-sponsored insurance coverage. Fifteen million fewer U.S. residents would have private insurance than without the law. The Affordable Care Act is not a government takeover of the U.S. health system; it is a means of using reformed private nongroup insurance markets to more effectively fight the steady decline in employer-provided group insurance. Repeal means a fundamental retreat from the promise of private health insurance coverage for our citizens.
Repeal means higher and more rapidly growing budget deficits
The Affordable Care Act delivers a unique dose of fiscal responsibility in an era of rapidly growing federal budget deficits. The new law offsets its new spending with even larger reductions in other spending and revenue increases. As a result, CBO estimates that the legislation will reduce the deficit by more than $100 billion by 2019, and by more than $1 trillion in the decade after that.
What is not widely appreciated is that deficit reduction due to the new health law will rise over time. The cuts in excessive spending and increases in revenues are back-loaded, not front-loaded as with so many other recent pieces of legislation. This is illustrated by the fact that the most recent CBO estimate shows that repeal would raise the deficit by $230 billion over the next decade. And, because the net budget savings from the new health law will grow over time, repeal would raise the deficit by much larger and ever growing amounts into the future.
Repeal would therefore mean undoing the enormous fiscal benefits of this legislation. Offsetting a more than $100 billion hole in the budget deficit by 2019 would require significant cuts elsewhere in the budget or other increases in revenues. And it seems highly unlikely that Congress would enact spending or revenue changes that would increase so rapidly over time. That means even fixes that offset the short-term costs of repealing the new law would not address the enormous long-term hole it would leave in our budget.
Repeal means a critical step backward on cost control
Reforming insurance markets and covering the uninsured are actually the relatively easy lifts for the new health reform law when compared to the more daunting and fundamental challenge—reducing the rate of growth in health care costs, which threatens to bankrupt our government and our nation. U.S. spending on health care is very high and a source of great concern but it is the growth rate of medical spending, not its level, that ultimately determines our country’s financial well-being. Absent the Affordable Care Act, if current trends persist we will be spending an unsustainable 38 percent of our GDP on health care by 2075 because the growth of health care costs would continue to outstrip the growth rate of the overall economy.
Addressing the rapidly rising costs of medical care, however, faces two daunting barriers. The first is scientific: There is tremendous uncertainty about how to lower health care costs without sacrificing health care quality. There is a broad consensus that there is significant waste in our health care system. But there is little consensus about the best way to address that waste without risking the enormous gains in population health due to health care improvements in recent decades. The second barrier is political: There are major entrenched interests that are threatened by fundamental health care reform and who will strongly oppose any such efforts.
In the face of these barriers, our political process has found it difficult to make progress on significant cost-control efforts over the past several decades. The Affordable Care Act represents the most important step forward in cost control in at least 30 years. The new law pursues many different approaches toward cost control, studying them to see which ones work best. This is through provisions that:
- Reduce consumer demand for excessive medical care through the “Cadillac tax” on high-cost insurance plans.
- Reduce health care provider payments by appointing a depoliticized board to make up-or-down recommendations to Congress on changes to Medicare’s provider payments.
- Set up dozens of health care pilot programs to test various approaches to revamping provider-payment incentives and organizational structure.
- Invest hundreds of millions of dollars in new comparative-effectiveness research.
- Launch pilot programs to assess the impact of various reorganizations of the medical malpractice process.
None of these approaches is guaranteed to work but together they represent a significant step toward fundamental cost control.
Importantly, they represent steps that are unlikely to happen if the Affordable Care Act is repealed. None of these ideas are new; most have been around for decades. But it was through the overall push for health reform that Congress was able to finally put them in place. Absent such a unifying framework, the barriers which have blocked cost-control efforts in the past will continue to stand in the way of moving forward on cost-control efforts.
Bottom line: Repeal is a dramatic step backward
The debate over repeal of the Affordable Care Act is characterized by enormous misinformation and confusion. Opponents of the legislation exploit this for political gains. A legitimate debate over the Affordable Care Act and the future of health care in America must recognize the fundamental improvements to our health care system put in place by this new law. Repealing would lead to:
- A society with poorer health and ultimately more deaths from lack of medical care
- A continued unfair and expensive nongroup insurance market that leads to economic instability, medical bankruptcy, and a less efficient job market where individuals are afraid to move to more productive job opportunities
- Continued free riding by those who pass billions of dollars in care costs onto the insured
- A massive decline in private insurance coverage
- Huge and unsustainable increases in budget deficits reaching trillions of dollars over coming decades
- A fundamental step backward in our efforts to control the health care costs which threaten to bankrupt our society
The Patient Protection and Affordable Care Act is aptly named. Repeal would mean less health care protection for more and more Americans at higher and higher costs to themselves, their families, and our nation. We simply cannot afford to repeal the new law.
By: Jonathan Gruber, Professor of Health Economics at the Massachusetts Institute of Technology and a member of the Massachusetts Health Connector Authority: January 19, 2011
Health Care Lawsuits: Separating Law From Spin
"Now if we can just fool the Courts"
If a public figure walks on water at noon, by 3 p.m. a dozen talking heads will be explaining that he can’t swim. That’s politics. But we can hope that federal judges won’t think in sound bites.
The current lawsuits challenging the Affordable Care Act raise this question insistently. I return to this lawsuit in yet another column because I believe this case will dominate both constitutional law and political discourse over at least the next 12 months–and because I believe its stakes far transcend its immediate consequences, important though they will be. I think that if our federal courts are willing to sign on to the challengers’ jejune theory of this case, not only we but our children will spend years dealing the malign consequences of the mistake. Nothing less than the ability of the United States to function as a modern nation may be at stake.
So far, in two of the pending lawsuits, opponents of the law have succeeded in spinning the judges, framing the lawsuits as posing the question whether (as Virginia argued) the federal government can “impose a penalty for what amounts to passive inactivity.”
We know the talk-radio answer to this question: Tyranny! Death panels! Black helicopters! Praise the Lord and pass the ammunition!
But the judicial answer, it seems to me, should be two-fold.
The first, and most important, answer a judge should give is, “I dunno. Find a case where the government does that and get back to me.” Because that description of the Affordable Care Act is simply inaccurate.
The second answer, which a judge shouldn’t give but a Con Law jock like me can, is, “Why ever not?”
I will get to that one later; but first, let’s deal with the canard that the Act somehow “penalizes inactivity.”
Here’s how Judge Henry Hudson put it in his decision in Cuccinelli v. Sebelius: The Act “requires that every United States citizen, other than those falling within specified exceptions, maintain a minimum level of health insurance.”
This snappy apothegm is the logical equivalent of saying that the Defense Appropriations Act “requires that every United States citizen, other than those who leave the country, engage in accepting a minimum level of protection by the United States military.” The provisions of the Health Care Act provide a benefit. The majority of Americans, who already have health coverage (and seem, by and large, to regard this coverage as worth bargaining for) will simply see improvements in their existing health care benefits, such as an end to lifetime benefit limits and the right to include older adult children on their policies. A significant number of others who are currently uninsured will become eligible for government-funded health insurance.
There will remain a small but significant number of Americans who can afford health care insurance but choose not to buy it. But contrary to the sound bite above, even they are not required to “maintain a minimum level of health insurance.” If they wish to keep their uninsured status, they may do so by paying an addition to their income tax bills–ranging from as little as $695 for an individual taxpayer to $2085 for a family of six or more. The claim that the government is “forcing individuals to buy a commercial product” is worse than spin; it is simply false.
In fact, even the choice of procuring insurance or paying a tax is put not to “every United States citizen,” or even “every United States citizen not already covered by insurance,” but only to those who earn enough income to qualify as taxpayers. “A small fraction of fewer than half of United States citizens,” though accurate, is much less thrilling to say, even for a judge, than “every citizen.”
This brings us to the contention that the act somehow regulates “inactivity.” Let’s you and I test this proposition: why don’t you just remain totally inactive in 2014, when the Act first takes effect.
Quit your job and get rid of your investments. The government will not regulate you. (True, it may offer you government-financed health care; but again, that is a benefit, not a regulation or punishment.)
But if you decide actually to work (I recommend that, by the way), you are not being “inactive.” You are taking part in commerce. The Constitution gives Congress plenary authority “to regulate commerce with foreign nations, and among the several States, and with the Indian Tribes.”
A system of regulation might easily include requiring you to pay taxes if you choose to burden commerce; willful refusal to maintain adequate health coverage for yourself and your family is such a burden. To claim otherwise doesn’t pass the straight-face test.
Conservatives like to prate about “individual responsibility” when it is a question of forcing the poor to work; asking the solvent to pay for themselves seems quite in line with these conservative values.
And as to the idea that Congress can only regulate “activity,” here again, verbal formulae are obscuring the practical truth. The Constitution does not say anything about “activity”; that’s a gloss that the Rehnquist Court put on it. Nor does it refer to “interstate commerce,” which to some (apparently including Justice Thomas) means men in knee breeches handing trinkets across state lines. The Constitution says that Congress may “regulate commerce . . . among the several states.”
Chief Justice Marshall (who was a ratifier, though not a Framer, of the Constitution) wrote in 1824 that “among” means “intermingled with,” not “between.” Marshall wrote that Congress’s commerce power reaches everything except that small set of matters “which are completely within a particular state, which do not affect other states, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government.” Health care, and the citizen’s economic relationship with it, most assuredly affect all the states, and individual decisions about insurance are an important part of that effect–just as a farmer’s decision to raise private wheat are a part of agriculture’s effect on commerce.
I am somewhat mystified why the state plaintiffs even have standing to appear. In order for them to be injured, the Act would have to infringe some power that is reserved by the Constitution to the states. Judge Hudson placed great emphasis on an obscure 1922 precedent called Bailey v. Drexel Furniture, in which a laissez-faire majority of the Supreme Court invalidated a federal tax on products produced by child labor. The tax, the Court reasoned, was an attempt to prevent exploitation of children in factories and mills; such labor regulations were “a purely state activity.”
The Court has long since given up the idea that “labor laws” are solely state matters. But assume that in the formal sense Drexel is good law. So what? The tax, or penalty, in the Affordable Health Care Act doesn’t regulate any “purely state activity.” If it pretended to regulate commerce but was actually aimed at preventing divorce, or imposing a national zoning code, or requiring homeowners to maintain tasteful wallpaper, there might–might–be a Tenth Amendment issue. But not here: In the guise of regulating commerce, the Act regulates . . . commerce.
Here’s the nub of the objectors’ argument–it is not that this isn’t a regulation of commerce, but that the Commerce Power isn’t strong enough to regulate an entire national market. That kind of limitation on the Commerce Power finds no support in, well, the Constitution.
The doctrine under which the Act is being assailed quite simply constitutes a threat to most of the significant advances in federal law of the past 100 years: federal pension programs, national wildernesses and parks, consumer protection, environmental regulation, and most particularly statutory guarantees of civil rights.
It’s not coincidental that right now Ron Paul laments the Civil Rights Act and that Haley Barbour speaks fondly the segregated South, that anti-immigrant extremists target birthright citizenship, or that right-wingers seek to wreck the Constitution with an old-South style amendment letting states repeal federal laws. A decision to void the Act would furnish a powerful precedent for those who would “restore” a libertarian dreamland that never existed, and that for most of us would quickly become a nightmare.
The great achievement of the Framers–the one they clearly thought most important–was the creation of a national Congress with plenary powers in the spheres assigned to it. Trying to wreck Congress is warring on the Constitution.
That’s not to say that Congress can regulate commerce by unconstitutional means. But the prohibitions on means are in the Constitution, not in the fevered brain of Cuccinelli & McCollum. If a new health care act were to restrict free speech, or impose ex post facto laws, or authorize bills of attainder, or deny due process, the courts should certainly step in.
But that’s not what is at issue here.
Stripped of spin, the state plaintiffs are arguing that Congress can’t use its commerce power to actually regulate commerce. If the courts buy this nonsense, they may fatally damage the power of Congress to manage a modern commercial economy. Repairing that mistake would involve far greater sacrifices than having to pay a tax.
By: Garrett Epps- former reporter for The Washington Post-Original article-The Atlantic, December 30, 2010
The Forgotten Accomplishments of The 111th Congress
It’s already been pointed out endlessly that the 111th Congress has been one of the most productive in decades. But here’s another way to look at it: Consider all the things this Congress has accomplished that we aren’t talking about.
Health care reform, the overhaul of Wall Street regulations, the ratification of New START and the repeal of don’t ask don’t tell are, of course, the accomplishments that will define this Congress in the history books. But there are a whole host of other relatively under-the-radar achievements that in and of themselves would normally be considered major achievements, had they not been completely overshadowed by the big ticket items.
Before we all depart for the holidays, let’s pause for a moment of reflection on these also-ran accomplishments, some of which passed with broad bipartisan support. There’s the Lily Ledbetter fair pay act, which reversed a Supreme Court decision limiting the ability of women to sue over salary discrimination. There’s the sweeping credit card reform measure putting a halt to unfair and deceptive industry practices. There’s the landmark legislation that greatly expanded the FDA’s authority to regulate the manufacturing and marketing of tobacco products.
There’s the largely forgotten measure that vastly expanded Federal aid to college kids that ultimately passed as part of health reform. More visibly, there is the food safety bill and the measure granting health benefits to 9/11 responders, both of which passed this month. And two women were confirmed to the Supreme Court, one of them a Latina — a historic accomplishment.
This is only a partial list.
Under normal circumstances, these alone would have constituted significant achievements. “When you look beneath the surface just a little bit there’s an enormous amount that under normal circumstances would have been heralded but got very little attention,” Congressional scholar Norm Ornstein tells me.
The larger story here, though, is that if you add in these accomplishments with the more visible ones, it becomes clear that Congress has expanded government’s reach even more than commonly thought. For all the justifiable criticism of health and Wall Street reform for not going far enough — and for all the talk about the coming battle to repeal them — the bigger story is that the sum total of this Congress’s major and minor achievements have produced an expansion of government’s role in society that will be very hard to undo.
“Taken together, the smaller accomplishments may have an impact on society that rivals the main accomplishments, and they have all bolstered government’s role as a protector of the public interest,” Ornstein says.
And so, one more tip of the hat to the 111th Congress and its leadership.
By Greg Sargent -The Plum Line, Washington Post- December 23, 2010
PolitiFact’s Lie of the Year: ‘A government takeover of health care’
In the spring of 2009, a Republican strategist settled on a brilliant and powerful attack line for President Barack Obama’s ambitious plan to overhaul America’s health insurance system. Frank Luntz, a consultant famous for his phraseology, urged GOP leaders to call it a “government takeover.”
“Takeovers are like coups,” Luntz wrote in a 28-page memo. “They both lead to dictators and a loss of freedom.”
The line stuck. By the time the health care bill was headed toward passage in early 2010, Obama and congressional Democrats had sanded down their program, dropping the “public option” concept that was derided as too much government intrusion. The law passed in March, with new regulations, but no government-run plan.
But as Republicans smelled serious opportunity in the midterm elections, they didn’t let facts get in the way of a great punchline. And few in the press challenged their frequent assertion that under Obama, the government was going to take over the health care industry.
PolitiFact editors and reporters have chosen “government takeover of health care” as the 2010 Lie of the Year. Uttered by dozens of politicians and pundits, it played an important role in shaping public opinion about the health care plan and was a significant factor in the Democrats’ shellacking in the November elections.
Readers of PolitiFact, the St. Petersburg Times‘ independent fact-checking website, also chose it as the year’s most significant falsehood by an overwhelming margin. (Their second-place choice was Rep. Michele Bachmann’s claim that Obama was going to spend $200 million a day on a trip to India, a falsity that still sprouts.)
By selecting “government takeover’ as Lie of the Year, PolitiFact is not making a judgment on whether the health care law is good policy.
The phrase is simply not true.
Said Jonathan Oberlander, a professor of health policy at the University of North Carolina-Chapel Hill: “The label ‘government takeover” has no basis in reality, but instead reflects a political dynamic where conservatives label any increase in government authority in health care as a ‘takeover.’ ”
An inaccurate claim
“Government takeover” conjures a European approach where the government owns the hospitals and the doctors are public employees. But the law Congress passed, parts of which have already gone into effect, relies largely on the free market:
• Employers will continue to provide health insurance to the majority of Americans through private insurance companies.
• Contrary to the claim, more people will get private health coverage. The law sets up “exchanges” where private insurers will compete to provide coverage to people who don’t have it.
• The government will not seize control of hospitals or nationalize doctors.
• The law does not include the public option, a government-run insurance plan that would have competed with private insurers.
• The law gives tax credits to people who have difficulty affording insurance, so they can buy their coverage from private providers on the exchange. But here too, the approach relies on a free market with regulations, not socialized medicine.
PolitiFact reporters have studied the 906-page bill and interviewed independent health care experts. We have concluded it is inaccurate to call the plan a government takeover because it relies largely on the existing system of health coverage provided by employers.
It’s true that the law does significantly increase government regulation of health insurers. But it is, at its heart, a system that relies on private companies and the free market.
Republicans who maintain the Democratic plan is a government takeover say that characterization is justified because the plan increases federal regulation and will require Americans to buy health insurance.
But while those provisions are real, the majority of Americans will continue to get coverage from private insurers. And it will bring new business for the insurance industry: People who don”t currently have coverage will get it, for the most part, from private insurance companies.
Consider some analogies about strict government regulation. The Federal Aviation Administration imposes detailed rules on airlines. State laws require drivers to have car insurance. Regulators tell electric utilities what they can charge. Yet that heavy regulation is not described as a government takeover.
This year, PolitiFact analyzed five claims of a “government takeover of health care.” Three were rated Pants on Fire, two were rated False.
‘Can’t do it in four words’
Other news organizations have also said the claim is false.
Slate said “the proposed health care reform does not take over the system in any sense.’ In a New York Times economics blog, Princeton University professor Uwe Reinhardt, an expert in health care economics, said, “Yes, there would be a substantial government-mandated reorganization of this relatively small corner of the private health insurance market (that serves people who have been buying individual policies). But that hardly constitutes a government takeover of American health care.”
FactCheck.org, an independent fact-checking group run by the University of Pennsylvania, has debunked it several times, calling it one of the “whoppers” about health care and saying the reform plan is neither “government-run” nor a “government takeover.”
We asked incoming House Speaker John Boehner’s office why Republican leaders repeat the phrase when it has repeatedly been shown to be incorrect. Michael Steel, Boehner’s spokesman, replied, “We believe that the job-killing ObamaCare law will result in a government takeover of health care. That’s why we have pledged to repeal it, and replace it with common-sense reforms that actually lower costs.”
Analysts say health care reform is such a complicated topic that it often cannot be summarized in snappy talking points.
“If you’re going to tell the truth about something as complicated as health care and health care reform, you probably need at least four sentences,” said Maggie Mahar, author of Money-Driven Medicine: The Real Reason Health Care Costs So Much. “You can”t do it in four words.”
Mahar said the GOP simplification distorted the truth about the plan. “Doctors will not be working for the government. Hospitals will not be owned by the government,” she said. “That’s what a government takeover of health care would mean, and that’s not at all what we”re doing.”
How the line was used
If you followed the health care debate or the midterm election – even casually – it’s likely you heard “government takeover” many times.
PolitiFact sought to count how often the phrase was used in 2010 but found an accurate tally was unfeasible because it had been repeated so frequently in so many places. It was used hundreds of times during the debate over the bill and then revived during the fall campaign. A few numbers:
• The phrase appears more than 90 times on Boehner’s website, GOPLeader.gov.
• It was mentioned eight times in the 48-page Republican campaign platform “A Pledge to America” as part of their plan to “repeal and replace the government takeover of health care.”
• The Republican National Committee’s website mentions a government takeover of health care more than 200 times.
Conservative groups and tea party organizations joined the chorus. It was used by FreedomWorks, the Heritage Foundation and the Cato Institute.
The phrase proliferated in the media even after Democrats dropped the public option. In 2010 alone, “government takeover” was mentioned 28 times in the Washington Post, 77 times in Politico and 79 times on CNN. A review of TV transcripts showed “government takeover” was primarily used as a catchy sound bite, not for discussions of policy details.
In most transcripts we examined, Republican leaders used the phrase without being challenged by interviewers. For example, during Boehner’s Jan. 31 appearance on Meet the Press, Boehner said it five times. But not once was he challenged about it.
In rare cases when the point was questioned, the GOP leader would recite various regulations found in the bill and insist that they constituted a takeover. But such followups were rare.
An effective phrase
Politicians and officials in the health care industry have been warning about a “government takeover” for decades.
The phrase became widely used in the early 1990s when President Bill Clinton was trying to pass health care legislation. Then, as today, Democrats tried to debunk the popular Republican refrain.
When Obama proposed his health plan in the spring of 2009, Luntz, a Republican strategist famous for his research on effective phrases, met with focus groups to determine which messages would work best for the Republicans. He did not respond to calls and e-mails from PolitiFact asking him to discuss the phrase.
The 28-page memo he wrote after those sessions, “The Language of Healthcare 2009,” provides a rare glimpse into the art of finding words and phrases that strike a responsive chord with voters.
The memo begins with “The 10 Rules for Stopping the ‘Washington Takeover’ of Healthcare.” Rule No. 4 says people “are deathly afraid that a government takeover will lower their quality of care – so they are extremely receptive to the anti-Washington approach. It’s not an economic issue. It’s a bureaucratic issue.”
The memo is about salesmanship, not substance. It doesn’t address whether the lines are accurate. It just says they are effective and that Republicans should use them. Indeed, facing a Democratic plan that actually relied on the free market to try to bring down costs, Luntz recommended sidestepping that inconvenient fact:
“The arguments against the Democrats’ healthcare plan must center around politicians, bureaucrats and Washington … not the free market, tax incentives or competition.”
Democrats tried to combat the barrage of charges about a government takeover. The White House and House Speaker Nancy Pelosi repeatedly put out statements, but they were drowned out by a disciplined GOP that used the phrase over and over.
Democrats could never agree on their own phrases and were all over the map in their responses, said Howard Dean, former head of the Democratic National Committee.
“It was uncoordinated. Everyone had their own idea,” Dean said in an interview with PolitiFact.
“The Democrats are atrocious at messaging,” he said. “They’ve gotten worse since I left, not better. It’s just appalling. First of all, you don”t play defense when you”re doing messaging, you play offense. The Republicans have learned this well.”
Dean grudgingly admires the Republican wordsmith. “Frank Luntz has it right, he just works for the wrong side. You give very simple catch phrases that encapsulate the philosophy of the bill.”
A responsive chord
By March of this year, when Obama signed the bill into law, 53 percent of respondents in a Bloomberg poll said they agreed that “the current proposal to overhaul health care amounts to a government takeover.”
Exit polls showed the economy was the top issue for voters in the November election, but analysts said the drumbeat about the “government takeover” during the campaign helped cement the advantage for the Republicans.
Rep. Earl Blumenauer, an Oregon Democrat whose provision for Medicare end-of-life care was distorted into the charge of “death panels” (last year’s Lie of the Year), said the Republicans’ success with the phrase was a matter of repetition.
“There was a uniformity of Republican messaging that was disconnected from facts,” Blumenauer said. “The sheer discipline . . . was breathtaking.”
By: Bill Adair, Angie Drobnic Holan, PolitiFact-December 16th, 2010
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