Archive for the ‘Health Care’ Category
Simplicity, Please
Today, L. Gordon Crovitz penned “Complexity Is Bad for Your Health” in the Wall Street Journal. It is a most edifying article about the difficulties facing the Supreme Court as it tries to figure out what the concoction termed “ObamaCare” is all about. Justices — from Breyer to Scalia — have made it clear that the only thing that is “clear” is that Congress and the White House paid a visit to Rube Goldberg before they passed the Patient Protection and Affordable Care Act Law in 2010.
Most of what passes for “getting something done” in Washington, D.C. usually amounts to making things so complex that no one — not even the authors — can grasp the nettle. But, that’s the objective of complexity — to conceal the truth, to deceive.
Yes, Ms. Pelosi, We’ve Been Serious the Whole Time
The start of my latest Obamacare op-ed, hot off the pixels:
“Can you create commerce in order to regulate it?” With those words, Justice Anthony Kennedy sent the legal establishment reeling.
Was the Supreme Court really taking seriously the preposterous claims of the Tea Party-inspired hacks who were suing the federal government? Was there really a chance that five justices, acting as would-be partisan hacks themselves, would throw out President Obama’s signature achievement? Could Obamacare, which name everyone is now allowed to use because the administration itself has adopted it, really fall on some technicality about mandating economic activity rather than regulating it when it occurs?
In a word, yes.
Read the whole thing at CNN.com.
EMTALA and the Good Samaritan
A final thought in this “Obamacare-at-the-Court” week: Does the Emergency Medical Treatment and Active Labor Act (EMTALA) make something like Obamacare’s mandate not only inevitable but legitimate? Enacted in 1986, EMTALA requires hospitals to provide care to anyone needing emergency treatment regardless of citizenship, legal status, or ability to pay. It’s often cited as the very reason we have to have Obamacare’s individual mandate, to cover the costs of providing for the uninsured indigent. As the Washington Post editorialized this morning, “If you end up in the emergency room, you will be cared for, as federal law demands. The government, already deeply involved in regulating the health-care market, has a legitimate interest in encouraging you to prepare for such an eventuality.”
Fair enough, but it must do so by constitutional means, and that’s just the problem here. Not every means that would solve a problem is authorized by our Constitution for limited government. In truth, however, the constitutional problem begins with EMTALA itself: neither the taxing nor the commerce power, if understood as the pre-New Deal Court understood it, authorizes Congress to compel hospitals to be Good Samaritans. In a free society, health care is no different than any other product or service: If you need or want it, you pay for it, failing which you don’t get it.
But the Constitution aside, that’s not how, “as a society,” we decided to go about things in 1986. (See here for a better way to serve the indigent.) We imposed the burden of providing such services on hospitals, which in turn shifted the costs mainly to those of us who do pay for the services we receive. To that complex system of “private” socialization Obamacare would add yet another layer of even more complex “public” socialization, the individual mandate being only one element in the mix. Needless to say, under neither arrangement is efficiency or the wise use of resources the goal.
So let’s go back to EMTALA and the Good Samaritan to see if there might be a better way. Traditional Anglo-American law has never compelled anyone to come to the aid of another unrelated person. We’re free to be Good Samaritans—that’s virtuous—but we don’t have to be. If we do aid another, however, we cannot then turn around and charge that person for the “service” we provided, however much it might be “decent” in turn for that person to compensate us for our troubles and losses. But here, we as a society are compelling hospitals to be “Good Samaritans.” In other words, we, not the hospitals, are the “virtuous” ones. Well if that’s the case, then we can’t really ask the hospitals to bear the costs of “our” virtue; nor, for the same reason, is it proper for the hospitals to shift the costs to only those who already pay for their services. Rather, if we, “as a society,” want to be virtuous in this way, then we, as a whole society, should bear the costs.
Are Individual Mandate Critics Showing ‘Bad Faith’?
Paul Krugman is the latest to suggest that advocates of personal Social Security accounts are guilty of hypocrisy in criticizing the constitutionality of Obamacare’s individual insurance mandate. After all, they contend, are not personal account supporters arguing in favor of a federal government mandate that individuals purchase a specific commercial product (i.e., stocks, bonds, mutual funds, or whatever)?
No doubt, there is a superficial similarity. But the analogy significantly misses what personal account proponents are calling for. If there was no current Social Security program and the government were simply to mandate that individuals purchase some form of commercial retirement savings product, that would indeed be analogous to the health insurance mandate, and would be unconstitutional for the same reasons. However, Americans are currently paying a Social Security payroll tax. What personal account advocates propose is simply a tax credit against that tax if individuals contribute to a personal account. That the credit would be equal to the size of the contribution is structurally irrelevant.
The government uses credits to incentivize behavior all the time. For example, it offers a tax credit for the purchase of the Chevy Volt. That may be bad policy, but it is generally agreed to be constitutionally permissible. It is, however, very different from a mandate that every American buy a Volt. Similarly, Congress would have been on much stronger constitutional ground if it had imposed a tax on all Americans to fund uncompensated care, and then offered a credit to anyone who obtained insurance. The same individuals would end up paying the penalty/tax as under Obamacare, but the structure would have been less offensive to the Constitution. The federal government clearly has the power to tax, and it can offer tax credits and deductions. Congress chose not to do it that way for political reasons—they didn’t want to be accused of raising taxes. But political expediency does not justify an unprecedented expansion of federal power.
And, while on the subject of Social Security, it should be noted that several individual mandate defenders—including Justice Ginsburg—have likened it to Social Security, saying that if the government can make us participate in Social Security, why can’t it make us buy health insurance? But in the case of Helvering v. Davis, the Supreme Court ruled that Social Security was constitutional precisely because it was not insurance and did not require citizens to buy a product. Rather, the Court held that the Social Security tax was simply a tax, authorized by the Constitution’s taxing power. Social Security benefits are simply a government spending program, authorized under the General Welfare clause, and unrelated to the tax itself. As the Court pointed out, “The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.” One may disagree with the Court’s expansive interpretation of the General Welfare clause in this case, but it clearly distinguishes Social Security (and Medicare or even a single-payer health care system) from the individual mandate constitutionally.
Some might say that these distinctions are just quibbles or nit-picking. But how government does things matters. Constitutional limits are there for a reason. We are, after all, a government of laws, not of men.
Judicial Modesty and Severability
As we digest the Obamacare oral arguments of the past three days, here’s a brief note on yesterday’s severability issue. The academics and pundits who assured us that the Court would easily dispose of this case—8-1 or, at worse, 6-3—were not only set back on their heels by Tuesday’s sharp attacks on the government’s Commerce Clause arguments, but even more, perhaps, by the openness of the Court’s conservatives to throwing the whole thing out. Thus, their spin now, championed prophylactically yesterday by The New York Times, is that the Court must “recognize limits on its own authority to overturn well-founded acts of Congress.” Heaven forfend us from judicial activism.
Heartening as it may be to find the Times and its followers discovering at last the virtues of judicial modesty and limited power, were the Court to rule that compelling individuals to engage in commerce is beyond Congress’s power to regulate already existing commerce, and to rule further that because the Patient Protection and Affordable Care Act’s mandate is inextricably bound up with its guaranteed issue and community rating provisions, as even the government admits, all of which constitutes the “heart of the Act,” the whole thing must go, that would not be an exercise of judicial activism.
Indeed, were the Court to ignore Justice Scalia’s plea and take upon itself the task of sifting through the Act’s 2,700 pages to try to determine what should stay and what should go—Justice Ginsburg’s “salvage job”—it would then be engaging in the kind of policy judgments that are reserved to the political branches—the very essence of judicial activism. Of course, the Court could also notice that Congress originally had a severability clause in the Act, but it took it out in the final version. That’s pretty good evidence that Congress wanted Obamacare to stand or fall in one piece.
Obamacare Argument Post-Mortem
Now that I’ve woken from the first full night’s sleep since the Supreme Court’s three-day Obamacare marathon began, I can share my thoughts on how the argument went, in case you haven’t seen my first and second days’ reports for the Daily Caller:
- The Anti-Injunction Act: On an argument day that can best be described as the calm before the storm, it quickly became clear that the Supreme Court would reach the constitutional issues everyone cares about. That is, regardless of how the justices resolve the hyper-technical issue of whether the Anti-Injunction Act is “jurisdictional,” this law — which prevents people from challenging taxes before they’re assessed or collected — does not apply to the Obamacare litigation. There were also hints that the Court was skeptical of the government’s backup merits argument that the individual mandate was justified under the Constitution’s taxing power. Perhaps the only surprising aspect of the hearing was how “cold” the bench was; it’s rare for the justices to allow advocates to speak at length without interruption, but that’s what they generally did today. That’s yet another indication that the Court will get past the AIA appetizer to the constitutional entree.
- The individual mandate: From Justice Kennedy’s noting that the government is fundamentally transforming the relationship of the individual to the government, to Chief Justice Roberts’s concern that “all bets are off” if Congress can enact economic mandates, to Justice Alito’s invocation of a hypothetical burial-insurance mandate, to Justice Scalia’s focusing on the “proper” prong of the Necessary and Proper Clause – and grimacing throughout the solicitor general’s argument – it was a good day for those challenging the individual mandate. Paul Clement and Mike Carvin, who argued for the plaintiffs, did a masterful job on that score, showing again and again the unprecedented and limitless nature of the government’s assertion of federal power. The solicitor general meanwhile, had a shaky opening and never could quite articulate the limiting principle to the government’s theory that at least four justices (and presumably the silent Justice Thomas) were seeking. While trying to predict Supreme Court decisions is a fool’s game, the wise should take note that if Tuesday’s argument is any indication, Obamacare is in constitutional trouble.
- Severability: The most likely ruling on severability is that all of Obamacare will fall along with its fatally flawed individual mandate. While such a result would be legally correct, it would still be stunning. Perhaps even more remarkable is that the severability argument proceeded under the general assumption that the mandate would indeed be struck down. This was not a mere hypothetical situation about which the justices speculated, but rather a very real, even probable, event. There’s still a possibility that a “third way” will develop between the government’s position (mandate plus “guaranteed issue” and “community rating”) and that of the challengers (the whole law) — perhaps Titles I and II, as Justices Breyer and Alito mused (and as Cato’s brief detailed) — but the only untenable position would be to sever the mandate completely from a national regulatory scheme that obviously wouldn’t work without it.
- Medicaid expansion/coercion: The justices don’t want to reach the factually complicated and legally thorny Medicaid issue. That may be another marginal factor pushing one or more of them to strike down all of Obamacare under a straightforward severability analysis and leave the “spending clause coercion” issue for another day. This was perhaps the most difficult of the four issues to predict, and having heard argument doesn’t really make that task easier. A majority of the Court was troubled by the government’s “your money or your life” stance, but it’s not clear what standard can be applied to distinguish coercion from mere inducements. Then again, if this isn’t federal coercion of the states, I’m not sure what is.
General post-argument reaction: All of my pre-argument intuitions were confirmed, and then some: The Court will easily get past the AIA, probably strike down the individual mandate, more likely than not taking with it all or most of the rest of the law (including the Medicaid expansion). Still, it was breathtaking to be in the courtroom to see the Chief Justice and Justices Scalia, Kennedy, and Alito all on the same page. (For example, when Justice Kennedy’s first question during yesterday’s hearing was, “Can you create commerce in order to regulate it?” — a question hostile to the government — my heart began racing.) Much as I’d love to think that my briefs helped get them there even a little bit, ultimately it’s the strength of the constitutional claims and the weakness of the government’s positions that prevailed — or will prevail if the opinions that come down in three months follow along the lines set by this week’s arguments. They may not of course — trying to predict the Supreme Court isn’t a science—but I’m coming out of this week feeling very good.
Finally, for links to all of Cato’s briefs and my last series of op-eds on the Obamacare litigation, see Monday’s blog post.
That’s Not a Limiting Principle, Noah Feldman Edition
Harvard law professor Noah Feldman opines that U.S. Solicitor General Don Verrilli ”faltered” yesterday when Supreme Court justices asked whether the Obama administration’s claim that the Constitution empowers Congress to force people to purchase health insurance contains any limiting principle. Put differently, if the power “To regulate commerce…among the several States” allows the government to force you to buy health insurance, can the government also force you to buy broccoli?
Feldman laments that Verrilli’s “failure to offer a sharp distinction could be disastrous for the government’s case,” but assures us, “There is a good, sharp answer to this wholly reasonable question.” Here is the preface to Feldman’s answer:
[W]hen it comes to the strange and unusual case of health insurance, inaction causes the whole market to break down. By not buying health insurance, the healthiest person is depriving everyone of a public good. By sitting on their hands — and acting rationally — people who do not purchase insurance are unintentionally causing the market to fail.
One problem here is that if Congress can compel you to buy something whenever not buying it would deprive someone else of a public good, then Congress can also force you to purchase — not just tax and provide to you, but force you to purchase — tanks, fighter jets, and military bases; lighthouses; software; fireworks displays; e-books; comparative-effectiveness research (or really any type of research); a subscription to Consumer Reports; landscaping services; parks; rare and endangered species; street lights; et cetera ad nauseam. That isn’t much of a limiting principle.
The New York Times Gets Serious about Limited Government
Can one confidently predict the editorial view of The New York Times on a “momentous” issue of the day, like ObamaCare in the Supreme Court? Does the sun rise in the east?
Speaking breathlessly from the steps of the Court just after oral argument concluded yesterday, CNN legal analyst Jeffrey Toobin, who like so many others had assured us that the Court would uphold ObamaCare’s linchpin, the individual mandate, called the government’s oral arguments on the issue “a train wreck for the Obama administration.” Risky as it is to predict how the Court will eventually rule, that’s how most other Court-watchers saw it yesterday, too, which meant that the Times had damage to control.
And so today we find the Gray Lady warning sternly that “the Supreme Court faces a central test: whether it will recognize limits on its own authority to overturn well-founded acts of Congress.” At least the good folks on the Times editorial board have some sense of limited government.
The problem, of course, is that it’s misplaced. The question is not whether Congress’s acts are well-founded but whether they’re constitutional. And on that score, the view of the Times is little different than that of then-Speaker Nancy Pelosi, who responded famously, when asked in October 2009 where specifically in the Constitution she found congressional authority to enact an individual mandate, “Are you serious?” which she repeated for emphasis.
Well yes, the question was serious, as numerous suits by some 28 states and others, to say nothing of yesterday’s arguments in the Supreme Court, have made abundantly clear. But you’d never know it from reading today’s Times editorial. Indeed, judging from “the skepticism in the questions from the conservative justices” it appears, the Times writes, that they “willfully reject both the reality of the national health care market and established constitutional principles that have been upheld for generations.”
No, the justices don’t reject the reality of a national health care market, “willfully” or otherwise, nor do they reject the power of Congress to regulate interstate commerce, however much the post-New Deal Court has expanded that power beyond its original purpose, which was to ensure a national market free from unjustified impediments.
What they do appear to reject is the idea that Congress’s commerce power is boundless. That, in fact, was the very point of Justice Anthony Kennedy’s opening question to the government’s lawyer: “Can you create commerce in order to regulate it?” Congress may have the power to regulate (interstate) commerce that already exists. But that power is altogether different from a power to compel a person to engage in commerce so that Congress can then regulate it under its commerce power. That is bootstrapping, plain and simple. Such a power would be unprecedented, as Justice Kennedy went on to say. It would change fundamentally “the relation of the individual to the government.” And that, he concluded, means that the government has “a heavy burden of justification to show authorization under the Constitution.”
But the Times apparently believes that such distinctions are irrelevant. Writing in broad terms throughout, the editors conclude that “if the Supreme Court hews to established law, the only question it must answer in this case is modest: Did Congress have a rational basis for concluding that the economic effects of a broken health care system warranted a national solution?” If that’s the only question, then the proper response to those who ask for more is, indeed, “Are you serious?” And that would mean the end of a Constitution that authorizes a government of delegated, enumerated, and thus limited powers.
The Other Federal Takeover
Right now the nation is fixated on the Supreme Court and health care, as well it should be. If the Court rules the wrong way and the individual mandate is upheld, seemingly the last limit to federal power—Washington can’t make you buy stuff—will be gone. So yes, please, let’s focus on ObamaCare.
When the arguments end and the health fight abates for a while, however, let’s pay some much needed attention to another federal takeover, one that is constantly being overshadowed by bigger things like wars, ObamaCare, and budget blowouts: looming federal domination of education.
There’s actually an immediate ObamaCare connection to education, though few will likely recall it. To make the CBO cost estimates come out right, Democrats attached the Student Aid and Fiscal Responsibility Act (SAFRA) to the already immense legislation. SAFRA eliminated guaranteed college loans—loans originated through private lenders but completely backed by taxpayer money—and made almost all lending direct from the Treasury. It wasn’t a sudden takeover as many Republicans framed it—the guaranteed program already represented massive federal control—but it did push the private sector even farther to the student-lending fringes.
Much more insidious is what Washington has been doing in K-12 schooling.
The real sea change was No Child Left Behind, when the Feds went from primarily doling out money, to dictating that every state have standards and tests in math, reading, and science, and schools and districts make yearly “proficiency” progress. It was a huge ramping-up of already unconstitutional federal involvement.
At least NCLB, though, was enacted through the proper legislative process: Congress debated the law, voted on it, and the president signed it. These days, that’s just too much of a bother.
The Obama administration started unilaterally making education policy with the “Race to the Top,” a contest in which states competed for $4 billion in “stimulus” money. Among the administration-specified things states essentially had to adopt to win? National curriculum standards, better known as the “Common Core,” which we are told repeatedly are voluntary for states to adopt.
But wait. Didn’t I used to write that Race to the Top was $4.35 billion? What happened to the other $350 million?
It wasn’t part of the purse states competed for. Instead, the administration is using it to pay for the development of national (read: “federal”) tests to go with the Common Core.
In case all that weren’t enough, the Obama Administration has decided it’s tired of waiting for Congress to rework NCLB and is issuing waivers to states that promise to implement administration-approved reforms. Included in those is adopting “college- and career-ready” standards, a euphemism for the Common Core. In other words, the federal government is on the precipice of dictating the basic curriculum for every public school in America, and doing so without even the semblance of following the constitutional, legislative process. It’s not just a federal takeover, but an executive branch takeover.
Why hasn’t this gotten the sort of attention that’s been showered on health care?
Unfortunately, a large part of the problem is that people are simply accustomed to a government education monopoly. Historically such a monopoly hasn’t been the norm, but in our lifetimes it has, and government schooling advocates would have us believe that it is the cornerstone of our society. Not so with health care: lots of people want others to pay for their care, but the default has never been government assigning you a doctor and hospital based exclusively on your home address.
The other part of the problem is people simply don’t know about the federal edu-coup. This is especially the case with national standards, which advocates have purposely soft pedaled to avoid the fate of open and honest—but disastrous—federal standards efforts in the 1990s. And when the topic has come up in public discussion, classic propaganda techniques have been employed: repeat enough that the effort is completely “state-led and voluntary,” and people will believe you.
Thankfully, it’s not too late to reverse this. There’s no historic Supreme Court showdown on the horizon, but some states have started to resist federal control, and groups like the Pioneer Institute and Pacific Research Institute have undertaken concerted efforts to expose the Common Core. The biggest problem is that the public is largely oblivious to what’s going on. Which is why, after the ObamaCare Supreme Court arguments are over, we need to turn our attention to the other, almost complete, federal takeover: education.
Randy Barnett and the Health Care Overhaul
Cato senior fellow Randy Barnett is featured on the front page of today’s New York Times as the chief academic critic of the constitutionality of the 2010 health care law. He spoke at Cato on that topic last Friday; video here.
The article notes his longstanding interest in the Ninth Amendment, the subject of his book published by Cato and the George Mason University Press in 1989, The Rights Retained by the People: The History and Meaning of the Ninth Amendment.
Professor Barnett also cooperated with Cato on his most recent book, Restoring the Lost Constitution: The Presumption of Liberty.
ObamaCare in Four Words
Cato Senior Fellow Randy E. Barnett argued on behalf of Angel Raich at the Supreme Court in 2004. It was the last big case at the High Court dealing with broad federal assertions of power under the Commerce Clause. On Friday at the Cato Institute’s new F.A. Hayek Auditorium, Barnett laid out the four words that define ObamaCare’s individual mandate: unprecedented, uncabined, unnecessary, and unconstitutional.
You can watch the full event from Friday here.
ObamaCare Oral Arguments Day 1 – Giving the People What They Want: An Actual Decision
Nearly everyone who is commenting on the first round of oral arguments in the ObamaCare case seems to think it highly likely that the Supreme Court will decide the case on the merits—that is, they will decide if the individual mandate is constitutional rather than pushing the issue back for another day.
I agree. The arguments today looked at a law called the Anti-Injunction Act (AIA) and whether it precludes pre-enforcement challenges to the individual mandate. The AIA prevents plaintiffs from challenging a tax assessment until the tax has been collected. Only after collection can plaintiffs sue for a refund, plus interest. Since the individual mandate is enforced by a penalty that is collected by the IRS, there is a question as to whether the AIA applies.
Because both the government and the law’s challengers want the case to be heard on the merits rather than dismissed, the Court appointed an outside attorney to argue that the AIA totally bars ruling on the challenge to the individual mandate. That attorney, Robert Long, faced many difficult questions from the justices. At least five justices, and probably more, seemed to believe that the AIA should not apply for one reason or another. Some seemed to think that it doesn’t apply because the penalty for non-compliance with the mandate is not a “tax” to which the AIA applies (a position similar to the one argued in Cato’s brief). Some seemed to think that the AIA does not create an absolute jurisdictional bar but rather allows for equitable exceptions if the issue is too important not to be heard.
As Ilya Somin points out at the Volokh Conspiracy, some of these issues are intertwined with the merits of the individual mandate itself, specifically whether or not it is a tax. Like most judges who have heard the case, the justices seemed very skeptical of the argument that the penalty is a tax. Justice Stephen Breyer even pointed out what many have said, the law says “penalty,” not “tax.” While this doesn’t solve the issue, it seems odd given the fact that the federal government knows how to use the word “tax” when it wants to, as everyone is painfully aware.
Going into the big day tomorrow–the argument over the individual mandate–we can expect a lively bench and many challenging questions. From today’s arguments, however, I would not expect any justice to push the taxation theory too hard.
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