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
Why We Need the Minimum Coverage Mandate
A district court judge in Virginia ruled on December 13 that the “minimum coverage” requirement in the Affordable Care Act is unconstitutional. The opinion is clearly at odds with other rulings in Virginia and in Michigan, where courts upheld the law.
Judges may disagree, but there’s a consensus among legal and economic scholars that this requirement to purchase health insurance is essential to making health insurance available and affordable to everyone, without regard to health status or “pre-existing conditions.” Without this provision, the law is unworkable and the consumer protections it provides become unenforceable. As the issue wends its way through the courts, it is useful to review why this requirement is in the law and the valuable protections we have to lose if it’s eviscerated.
Today, limited affordable coverage in the small business and individual markets reflects the fact that purchasing health insurance is totally voluntary. Given that health insurance is expensive relative to family or small business incomes, people are reluctant to purchase protection unless and until they need health care. If people who need health care come to dominate an insurer’s policyholders, then insurance can no longer spread or “pool” risk—collect premium dollars from a broadly healthy group of purchasers to distribute to the minority among them who need costly care. For this reason, health insurers do everything they can to screen out or deny protection to people with care needs. The Affordable Care Act ended those practices.
Opponents of the Affordable Care Act claim we can change this behavior without a requirement that people buy health insurance, and simply prohibit insurers from denying health insurance based on pre-existing conditions. But states have tried and failed in this approach. Several states tried what are called “community rating reforms”—requiring health insurers to offer policies within a given area at the same price to all persons without medical underwriting. The result: dramatic increases in insurance prices and a rapidly shrinking insurance market. In other words, the markets failed.
The lesson—incorporated in the Affordable Care Act—is that effective insurance markets require not only requirements on insurers, but requirements that people buy insurance along with subsidies to make insurance affordable. All three legs of this three-legged stool are critical to effective health insurance.
What happens if requirement to purchase coverage is removed as Judge Henry Hudson ruled? One of us has estimated the effects using a microsimulation model similar to that used by the Congressional Budget Office to estimate the Affordable Care Act’s effects. The results are striking. Eliminating the minimum coverage provision would increase the average individual premium by 27 percent in 2019 and reduce the expansion of insurance coverage by three-quarters, from 60 percent to 12 percent of the 55 million people uninsured in 2019.
Removing the mandate would at the same time dramatically alter the “bang for the buck” in federal spending. While removing the mandate cuts the legislation’s coverage gains by more than 75 percent, it would reduce the spending by less than a quarter—as subsidies are increased to cover the higher premiums for the more modest number of the sicker uninsured who are most likely to participate.
Judge Hudson’s decision may be good politics but the policy implications will be devastating for millions of Americans. His decision jeopardizes putting affordable coverage out of reach for those who cannot find it now, especially those with pre-existing conditions. The Affordable Care Act seeks to improve our nation’s health system; Judge Hudson’s decision makes it worse.
By: Jonathan Gruber and Judy Feder-Jonathan Gruber is a professor of economics at the Massachusetts Institute of Technology and Judy Feder is a Senior Fellow at the Center for American Progress; Center For American Progress-December 14, 2010
Commerce Clause Conundrum–Will The Hudson Ruling Stand?
In declaring unconstitutional the new requirement for Americans to buy health insurance, federal Judge Henry Hudson rests his decision on one of the most widely applied clauses in the Constitution.
Does his interpretation hold up?
Hudson ruled Monday that the Commerce Clause does not give Congress the authority to make people buy something. The Clause itself serves as the basis for a vast swath of federal regulatory statute, and it states, simply, that:
The Congress shall have Power … To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes
The Commerce Clause has been interpreted quite broadly over the years, to the point where “interstate” holds little distinctive meaning in the eyes of judges. Courts have so thoroughly established the precedent that one economic action by one person, even if it happens only within one state, can affect the broader economy of any good in question, that the Commerce Clause generally applies to all economic activity.
Hudson’s problem with the federal government’s argument is that this is a novel application of the Commerce Clause, in that it actually forces people to buy something.
Earlier in this opinion, the Court concluded that Congress lacked power under the Commerce Clause, or associated Necessary and Proper Clause, to compel and individual to involuntarily engage in a private commercial transaction, as contemplated by the Minimum Essential Coverage Provision [i.e., the requirement to buy insurance]. The absence of constitutionally viable exercise of this enumerated power is fatal to the accompanying sanction for noncompliance. …
A thorough survey of pertinent constitutional case law has yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce or role in a global regulatory scheme. The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. At its core, this dispute is not simply about regulating the business of insurance–or crafting a scheme of universal health insurance coverage–it’s about an individual’s right to choose to participate.
There are more ins and outs, including whether or not the individual mandate is enforced by a “tax” or a “penalty,” but that’s the crux of Hudson’s ruling: a lack of precedent for forcing people into commercial engagement.
There is, however, some precedent.
As Georgetown constitutional law professor Louis Michael Seidman pointed out, the 1964 Civil Rights Act forced businesses into economic engagement when it outlawed racial discrimination in business. Some restaurants didn’t want to engage in commerce with black people, but the federal government forced them to (coincidentally, this was the portion of the law to which Sen.-elect Rand Paul objected).
In another case, Wickard v. Filburn, the federal government tried to penalize a farmer for growing wheat on his own property simply for him and his family to eat. He wasn’t selling it. But the federal government wanted to drive up the price of wheat, and the Supreme Court ruled that the government was within its powers to penalize him for this noncommercial activity and force him, instead, to buy his wheat from the interstate wheat economy, which Congress governs. That decision was handed down in 1942, but the Supreme Court reaffirmed it (cited it to support the logic of a ruling) in 2005, in its ruling on the Raich medical marijuana case.
Judges can decide on their own how directly those ruling apply, and the Supreme Court can always go back on previous decisions if the justices feel it appropriate.
But those are the relevant decisions in which a vaguely similar issue was confronted, in case you were wondering if there’s any historical context for the issue that’s now being forced.
By: Chris Good, Associate Editor –The Atlantic, December 13, 2010
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