Incredible
“The Affordable Care Act gives states incredible freedom to tailor reforms to their needs.”—HHS Secretary Kathleen Sebelius, February 10, 2011
“We’ve taken incredible steps to reduce health care costs and improve care…”—HHS Secretary Kathleen Sebelius, November 14, 2011
Ilya Somin Debates ObamaCare’s Individual Mandate at New England Journal of Medicine
In this video by the New England Journal of Medicine, Cato adjunct scholar and George Mason University law professor Ilya Somin debates ObamaCare‘s individual mandate with Jack Balkin, a professor of constitutional law and the First Amendment at Yale Law School. Transcript here.
Private Insurance Is More Efficient than Medicare–By Far
Diane Archer has a post at the Health Affairs blog arguing that Medicare is more efficient than private insurance. One can only reach such a conclusion through such sleights of hand as conflating spending with cost, and by ignoring most of Medicare’s administrative costs.
As a pre-buttal, I offer this excerpt from a paper I wrote about a “public option” (emphases generally added and citations omitted):
Is Government More Efficient?
Supporters of a new government program note that private insurers spend resources on a wide range of administrative costs that government programs do not. These include marketing, underwriting, reviewing claims for legitimacy, and profits. The fact that government avoids these expenditures, however, does not necessarily make it more efficient. Many of the administrative activities that private insurers undertake serve to increase the insurers’ efficiency. Avoiding those activities would therefore make a health plan less efficient. Existing government health programs also incur administrative costs that are purely wasteful. In the final analysis, private insurance is more efficient than government insurance.
An 85 Percent Increase in Health Care Fraud Prosecutions? Be Still My Beating Heart…
USA Today reports that the Obama administration’s efforts may yield an 85 percent rise in federal fraud prosecutions. Yawn.
Fraud expert Malcolm Sparrow:
By taking the fraud and abuse problem seriously this administration might be able to save 10 percent or even 20 percent from Medicare and Medicaid budgets. But to do that, one would have to spend 1 percent or maybe 2 percent (as opposed to the prevailing 0.1 percent) in order to check that the other 98 percent or 99 percent of the funds were well spent. But please realize what a massive departure that would be from the status quo. This would mean increasing the budgets for control operations by a factor of 10 or 20. Not by 10 percent or 20 percent, but by a factor of 10 or 20. [emphasis added]
That’s not going to happen, as I explain here and in this video:
$154 Million Medicaid Fraud Settlement a Sign of Govt Failure, Not Success
The federal government, four states, and a whistleblower have extracted a $154 million settlement from Par Pharmaceuticals for fraudulently inflating the prices it charges Medicaid, according to the Associated Press.
With Medicare and Medicaid losing roughly $100 billion each year to fraud and other improper payments, however, the fact that a paltry $154 million settlement is news can only mean that federal and state governments are not even trying to combat fraud in any serious way. As I explain in this video, that’s because politicians have almost zero incentive to do so — which makes massive amounts of fraud an inherent part of these programs:
Under ObamaCare, Medicare and Medicaid fraud will only get worse.
Obamacare’s Platonic Guardians
As followers of this blog recognize, Obamacare has more constitutional defects than just the individual mandate or even the coercive use of Medicaid funds. One issue that is getting increasing attention (see the Weekly Standard, National Review, and George Will) is this weird new entity called the Independent Payment Advisory Board.
IPAB, which Sarah Palin famously labeled a “death panel,” will exercise virtually unchecked power to set Medicare reimbursement rates—without political or legal oversight by any branch of government. It’s reminiscent of the Public Company Accounting Oversight Board, the part of the Sarbanes-Oxley financial regulation law that the Supreme Court found partially unconstitutional last year. Except it has the power of life and death and is insulated even from repeal!
That is, IPAB creates “recommendations” for cutting Medicare spending, which then acquire the force of law. Congress is specifically barred from reversing or modifying these “recommendations”; the only thing it can do is add further cuts. It can also abolish IPAB, but only by passing a curious “resolution” that must be introduced between Jan. 3 and Feb. 1. 2017, and must be passed by 3/5 of all members of both houses by Aug. 15 of that same year. Otherwise, Congress loses even its power to add further Medicare cuts and IPAB becomes a permanent fixture of of our health care world.
Suffice it to say, Congress cannot delegate its legislative authority to any such independent, everlasting institution. One Congress can’t even bind its successors!
Pacific Legal Foundation principal attorney and Cato adjunct scholar Timothy Sandefur unearthed this great nugget by someone defending Obamacare:
Amazingly, Timothy Jost, one of Obamacare’s most vocal advocates, has proudly proclaimed that IPAB will act like:
A board of “Platonic Guardians” to govern the health care system or some aspects of it. The cost of health care is spinning dangerously out of control…. [O]ur traditional political institutions—Congress and the executive administrative agencies—are too driven by special interest politics and too limited in their expertise and vision to control costs. Enter the Platonic guardians…an impartial, independent board of experts who could make evidence-based policy determinations based purely on the basis of effectiveness and perhaps efficiency.
Think about that for a second. Plato’s “Guardians” (also known as philosopher kings) were a group of “godlike” officials (that’s Plato’s word) who would wield undemocratic power to form the perfect utopian state without oversight. According to The Republic, the Guardians would, among their other things, enforce:
by law…such an art of medicine…[which] will care for the bodies and souls of such of your citizens as are truly wellborn, but those who are not, such as are defective in body, they will suffer to die, and those who are evil-natured and incurable in soul they will themselves put to death. This certainly…has been shown to be the best thing for the sufferers themselves and for the state.
America’s constitutional democracy was created in direct contradiction to such authoritarian ideas.
Luckily, our friends at the Goldwater Institute have a lawsuit pending against IPAB, Coons v. Geithner (here’s the case page). You’ll be hearing a lot more about this case regardless of the final result of the individual mandate lawsuits. Here’s PLF’s amicus brief on the important “non-delegation doctrine” issue at its heart.
The Obamacare Lawsuit: From the Courtroom in Atlanta
ATLANTA — In the most important appeal of the Obamacare constitutional saga, today was the best day yet for individual freedom. The government’s lawyer, Neal Katyal, spent most of the hearing on the ropes, with the judicial panel extremely cautious not to extend federal power beyond its present outer limits of regulating economic activity that has a substantial aggregate effect on interstate commerce.
As the lawyer representing 26 states against the federal government said, “The whole reason we do this is to protect liberty.” With those words, former solicitor general Paul Clement reached the essence of the Obamacare lawsuits. With apologies to Joe Biden, this is a big deal not because we’re dealing with a huge reorganization of the health care industry, but because our most fundamental first principle is at stake: we limit government power so people can live their lives the way they want.
This legal process is not an academic exercise to map the precise contours of the Commerce Clause or Necessary and Proper Clause — or even to vindicate our commitment to federalism or judicial review. No, all of these worthy endeavors are just means to achieve the goal of maximizing human freedom and flourishing. Indeed, that is the very reason the government exists in the first place.
And the 11th Circuit judges saw that. Countless times, Judges Dubina and Marcus demanded that the government articulate constitutional limiting principles to the power it asserted. And countless times they pointed out that never in history has Congress tried to compel people to engage in commerce as a means of regulating commerce. Even Judge Hull, reputed to be the most liberal member of the panel, conducted a withering cross-examination to establish that the individual mandate didn’t help that many people get affordable care, that the majority of people currently without coverage would be exempt from the requirement (presumably due to their income level).
In short, while we should never read too much into an oral argument, I’m more optimistic about this case now than any other.
Update
Welcome, Instapundit readers!
Plaintiffs Should Be Cautiously Optimistic about Latest Obamacare Appeal
CINCINNATI — Now for something completely different, and not just because the spirited Sixth Circuit judges were much more skeptical of the government’s position than the Fourth Circuit was last month. Unlike the panel in Richmond — Virginia Attorney General Ken Cuccinelli probably started outlining his cert petition as soon as court adjourned — here there will be at least one vote to strike down the individual mandate, and maybe even all three. And this panel should produce one or more opinions in which there will be much for the Supreme Court to grapple with.
The appellate argument didn’t even begin until after a skirmish over standing provoked by the motion to dismiss the government filed last week. That mini-argument — what Judge Martin likened to his time in Jefferson County (KY) circuit court — will likely not prove decisive. Nor will the Anti-Injunction Act, the tax statute on which the court requested supplemental briefing but which the government conceded didn’t apply.
Not surprisingly, this case, brought by the Thomas More Legal Center, will almost certainly be decided on the issue of whether the federal government can compel people to engage in commerce — “regulate inactivity.” The government’s theory that “health care is unique” came under harsh attack from Judges Graham and Sutton because it didn’t seem to offer a constitutional (as opposed to factual) limiting principle for federal power. Judge Martin was more circumspect, but he’s considered among the most liberal circuit judges in the country, so all things being equal would probably try to uphold the law (or find a way to decide the case on procedural grounds so as to avoid losing on the merits). Judge Sutton — one of the more conservative jurists nationwide — was also scrupulously neutral, picking at weaknesses in both sides’ presentation and appearing open to a narrow technical decision.
All in all, it was a fascinating day in court that proved again that no matter how much one studies the Obamacare challenges, there’s always something new to learn. Be sure to read Cato’s amicus brief in this case for more background.
Supreme Court Denies Expedited Obamacare Review
That the Supreme Court declined to take up the Obamacare litigation before even a single appellate court had ruled on it is neither surprising nor game-changing.
Virginia Attorney General Ken Cuccinelli’s cert petition, whatever its merits (which were several), was a long-shot to begin with as a matter of practice and procedure. Cato, like all other interested parties, has continued filing briefs in and commenting on the various cases on appeal around the country.
The only noteworthy point here is that Justice Elena Kagan apparently participated in the consideration of the petition, which indicates that she won’t be recused when one of these cases does hit the Court. This too isn’t terribly surprising: I’m still digging through the documents regarding her involvement (or lack thereof) in discussions about the litigation when she was solicitor general, but there does not as yet seem to be a “smoking gun” requiring recusal.
In any event, see you in Richmond on May 10 for the Fourth Circuit argument in the two Virginia lawsuits.
Cato’s Latest Obamacare Brief: Congress Cannot ‘Commandeer the People’
A recent poll showed that 22% of Americans believe Obamacare has been repealed and 26% aren’t sure. Yet here at Cato, we’re all too aware that the massive, unconstitutional, and fundamentally unworkable overhaul of our health care system still looms on the horizon.
While two lower courts have struck down Obamacare in whole or in part, three others have ruled it constitutional, including a D.C. District Court opinion that claimed for the federal government the right to regulate the “mental activity” of decision-making. As litigation progresses to the appellate level, this latter decision has proven to be more a hindrance to Obamacare’s supporters than a help, its Orwellian pronouncement being hard to ignore while the government downplays the significance of the power Congress is asserting. Nevertheless, Obamacare’s constitutionality—with a focus on the individual health insurance mandate—remains an open question until ruled upon by the Supreme Court.
Cato’s latest amicus brief is in the Fourth Circuit, in the case brought by Virginia Attorney General Ken Cuccinelli. In this case, unlike in the Sixth Circuit (in which we also filed a brief), it is the federal government that appealed an adverse district court decision that struck down the individual mandate. In our brief, joined by the Competitive Enterprise Institute and Prof. Randy Barnett (the intellectual godfather of the Obamacare legal challenges, and also a Cato senior fellow), we argue that the outermost bounds of existing Commerce Clause jurisprudence prevent Congress from reaching intrastate non-economic activity regardless of whether it substantially affects interstate commerce. Nor under existing law can Congress reach inactivity even if it purports to act pursuant to a broader regulatory scheme.
Allowing Congress to conscript citizens into economic transactions is not only contrary to existing Commerce and Necessary and Proper Clause doctrine—as broad as that doctrine is—but it would fundamentally alter the relationship between the sovereign people and their supposed “public servants.” The individual mandate “commandeers the people” into Congress’s brave new health care world. If Obamacare is allowed to stand, the only limit on federal power will be Congress’s own discretion.
The case will be argued before the Fourth Circuit in Richmond on May 10. Read more from Prof. Barnett on Obamacare here and check out the half-day event we recently held on the legal and economic problems with the law. Finally, though his name isn’t on our brief because he hasn’t yet become a member of the bar, many thanks to legal associate Trevor Burrus for his work on it.
Likely Voters Oppose ObamaCare by Nearly a 20-Point Margin
It has been a while since I generated a Pollster.com chart showing support/opposition to ObamaCare among only likely voters, so here goes.
Note that a majority of likely voters oppose ObamaCare, and that opposition exceeds support by nearly 20 percentage points. That’s compared to a 10-point spread among all adults.
Filed under: Cato Publications; General; Government and Politics; Health Care
Mitch Daniels and ObamaCare, Round Two
In a March 4 article for National Review Online titled, “Mitch Daniels’s Obamacare Problem,” I explain how Indiana Gov. Mitch Daniels (R) is undermining the effort to repeal ObamaCare, and how he might do even more damage to that movement as the Republican nominee for president. My article came under fire from Daniels’ policy director Lawren Mills (in the comments section of my article), Grace-Marie Turner of the Galen Institute, and Bob Goldberg of the Center for Medicine in the Public Interest.
Today, NRO runs my response. An excerpt:
In brief, the trio believes that Daniels’s expansion of government-run health care is a conservative triumph. I can’t believe we’re even having this conversation…
Daniels has an ObamaCare problem that could hurt the repeal movement if he doesn’t deal with it. Turner is creating more ObamaCare problems. This isn’t the first time conservatives have danced with the devil on health-care questions (see Massachusetts), but with health-care freedom now at its moment of maximum peril, that needs to stop. It will probably, however, take more than just the usual voices of protest to stop it. Tea Party and traditional conservative groups should perhaps spend less time attacking congressional Republicans over relatively minor tactical disagreements, and more time educating the governors, state legislators, and (yes) policy wonks who are actively implementing ObamaCare in their own backyards.
I’ll be speaking tonight at a Capitol Hill event sponsored by the Galen Institute (among others).
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