Yes, Madam Speaker, We’re Serious
During the initial legislative debate over ObamaCare, a reporter asked (now-outgoing) House Speaker Nancy Pelosi (D-CA) whether the U.S. Constitution grants Congress the power to compel Americans to purchase health insurance. Pelosi responded, “Are you serious? Are you serious?”
Today, a federal court answered Ms. Pelosi’s question when it declared ObamaCare’s individual mandate unconstitutional.
Here is Pelosi’s statement responding to today’s court ruling in Cuccinelli v. Sebelius:
Pelosi Statement on Affordable Care Act Ruling in Virginia District Court
WASHINGTON, Dec. 13, 2010 /PRNewswire-USNewswire/ – Speaker Nancy Pelosi issued the following statement today after a District Court judge in Virginia ruled one provision of the Affordable Care Act unconstitutional. The judge refused to freeze implementation of the law during the appeals process, meaning Americans already benefitting from health insurance reform — or set to benefit soon — will not be affected:
“Today’s court ruling stands in stark contrast to 14 similar challenges to the Affordable Care Act — in two, federal district judges strongly upheld the law; in the other 12, the challenges have been dismissed.
“Since its enactment, health insurance reform has delivered concrete benefits to millions of Americans. Among provisions already benefitting the American people, it has offered small businesses a tax break to cover their workers, allowed young adults to stay on their parents’ plans until age 26, and provided assistance to seniors struggling to pay prescription drug costs. These changes are good for our middle class, and will not be impacted by this court’s decision to overturn a single provision of the law.
“There have been and will continue to be a wide range of attempts to weaken this law. But as in previous court rulings across the country, I am confident that the Affordable Care Act will ultimately be sustained and will keep benefitting our middle class, our families, and our businesses, indeed every American. In Congress, we will stand firm against attempts to roll back the law, including the Patient’s Bill of Rights and the critical consumer protections enacted by health insurance reform.”
SOURCE Office of the Speaker of the House
Note that Pelosi does not address the constitutional issue.
Yes, Virginia, There Are Limits on Federal Power
Yes, Virginia, there are limits on federal power.
Today is a good day for liberty. And a bad day for those who say that Congress is the arbiter of Congress’s powers. By striking down the individual mandate, Judge Hudson vindicated the idea that ours is a government of delegated and enumerated — and thus limited — powers. Even if the Supreme Court has broadened over the years the scope of Congress’s authority to legislate under the guise of regulating interstate commerce or to tax for the general welfare, “the constraining principles articulated in this line of cases… remains viable and applicable to the immediate dispute.”
In short, we have come far from the days when pundits dismissed the lawsuits challenging the new health care law as frivolous political gimmicks. This is just one district court — whose opinion is not binding on the judges who will now consider the government’s appeal — but we can now see the day where this unprecedented assertion of federal power is definitively rejected as fundamentally contrary to our constitutional order.
As Judge Hudson said, “Despite the laudable intentions of Congress in enacting a comprehensive and transformative health care regime, the legislative process must still operate within constitutional bounds. Salutatory goals and creative drafting have never been sufficient to offset an absence of enumerated powers.”
Federal Court Declares ObamaCare’s Individual Mandate Unconstitutional
ObamaCare has always hung by an absurdity. ObamaCare supporters claim that the Constitution’s words “Congress shall have the Power…To regulate Commerce…among the several States” somehow give Congress the power to compel Americans to engage in commerce. This ruling exposes that absurdity, and exposes as desperate political spin the Obama administration’s claims that these lawsuits are frivolous.
This ruling’s shortcoming is that it did not overturn the entire law. Anyone familiar with ObamaCare knows that Congress would not have approved any of its major provisions absent the individual mandate. The compulsion contained in the individual mandate was the main reason that most Democrats voted in favor of the law. Yet the law still passed Congress by the narrowest of all margins — by one vote, in the dead of night, on Christmas Eve — and required Herculean legislative maneuvering to overcome nine months of solid public opposition. The fact that Congress did not provide for a “severability clause” indicates that lawmakers viewed the law as one measure.
Despite that shortcoming, this ruling threatens not just the individual mandate, but the entire edifice of ObamaCare. The centerpiece of ObamaCare is a three-legged stool, comprised of the individual mandate, the government price controls that compress health insurance premiums, and the massive new subsidies to help Americans comply with the mandate. Knock out any of those three legs, and whole endeavor falls.
Moreover, the individual mandate is not the law’s only unconstitutional provision.
These lawsuits and the continuing legislative debate over ObamaCare are about more than health care. They are about whether the United States has a government of specifically enumerated powers, or whether the Constitution grants the federal government the power to do whatever the politicians please, subject only to a few specifically enumerated restraints. This ruling has pulled America back from that precipice.
Filed under: Cato Publications; General; Government and Politics; Health Care
Is Congress Above the Law?
The first item on this election campaign’s Contract with America was that, if elected (as they have been), the House Republicans would require that all laws that apply to the rest of the country also apply to Congress. We’ll see if that and the other promised reforms materialize, but it does raise yet another issue in the context of Obamacare.
As my colleague Michael Cannon pointed out to me, the new health care law kicks congressmen out of the Federal Employees Health Benefits Program. (The current FEHB is no different from the health coverage provided by any private employer -– federal employees choose from a series of private plan options (none of which is run by the government), and receive a subsidy from the federal government acting in its role as an employer.)
My first reaction to hearing this was: Good — if the rest of us lose our health care freedom, so should those who forced this new atrocity on us. But apparently this result was not intended, so the Obama administration has decided to ignore that part of the law.
No joke. Here is the Congressional Research Service report on the provisions that oust members of Congress from their health insurance. And here is the letter in which an Obama appointee announces that the administration will ignore the law. These two articles also provide important information.
Now, assuming that something constitutionally problematic is going on here, what can anyone do about it? To put it in legal terms, who has standing to sue for this apparent constitutional violation? It’s a tough row to hoe — taxpayers cannot bring suit based on generalized grievances — but off the top of my head, I can think of two possibilities: (1) members of Congress suing the president or the Department of Health and Human Services for essentially passing new law and therefore infringing on congressional prerogatives (thereby violating the separation of powers); or (2) an insurance broker or carrier who would otherwise be signing up new clients.
And there are two additional related questions:
1. Why did Congress expand Medicaid while refusing to participate in it themselves? Obamacare expanded Medicaid to an estimated 18 million new Americans, none of whom will have a choice of private plans, instead being dumped into Medicaid, a program notorious for access problems (and which in Arizona now doesn’t cover organ transplants). Yet all Senate Democrats voted against an amendment enrolling members of Congress in the new Medicaid program (all Republicans voted for it, except one who was absent).
2. Will members of Congress use their own salaries to pay any fines assessed because their employees have “unaffordable” health coverage? Obamacare includes a $2,000 per worker penalty for any employer that does not provide “affordable” coverage, beginning in 2014. Many junior staffers have incomes below 400 percent of the federal poverty level ($43,320 for a single person, or $88,200 for a family of four), and thus could be subject to the new statutory test of whether their health insurance options are “affordable.” While it’s unclear how this particular provision will be implemented for Hill staff – due to the “significant unintended consequences” of sloppy drafting — it’s entirely possible that member offices could be assessed a $2,000 penalty for every worker needing insurance subsidies because they have no “affordable” alternative. If that scenario happens, will the members of Congress who voted for the law pay the penalty out of their own salaries or will they rely on taxpayer funds to finance an obligation they imposed on themselves?
How to Tell When ObamaCare Supporters Are Nervous
Supporters have gone to great lengths to make ObamaCare appear popular or to make repeal seem impossible. But this op-ed by my friend Jonathan Cohn made my jaw drop.
First, Cohn notes that the Senate recently voted down two efforts to repeal one of ObamaCare’s more unpopular provisions: the “1099 reporting tax,” which will place an enormous burden on small businesses. ”Neither provision,” Cohn obliquely reports, “got enough votes to pass.” He concludes:
Critics of health care reform [sic] this week thought they would get their first win in the campaign to repeal the Patient Protection and Affordable Care Act. Instead they got a lesson in just how politically challenging a wholesale repeal might be.
If opponents can’t even repeal the unpopular parts of ObamaCare, how can they repeal the whole thing?
Cohn neglects to mention a few important details. The reason neither amendment received “enough votes” is because, due to procedural considerations, each would have needed a 2/3 majority to pass — i.e., 67 votes. The Republican amendment actually received 61 votes. (The Democratic amendment received only 44 votes.) Reading Cohn’s account, though, you might think — and Cohn might think, or just want you to think — that both failed because they lacked majority support. In fact, the Republican amendment received a filibuster-proof majority. Even though it included $19 billion of spending cuts. And in a chamber with only 41 Republicans. (Another six arrive next month.) And the mere fact that Democrats offered an amendment to repeal part of ObamaCare is notable in itself. Cohn’s spin aside, the skirmish over the 1099 reporting tax shows that Democrats are divided and ObamaCare supporters are on the run.
Second, Cohn writes, “advocates of repeal have one extra liability that the law’s architects did not — a lack of majority support even before the wrangling begins.” As evidence, he cites a single Gallup poll from July 2009 that found 50 percent of the public supported “comprehensive health care reform.” Oy, where to begin. First, by Cohn’s own single-poll standard, he is just flat wrong. Advocates of repeal can point to the latest Rasmussen poll, which shows that 58 percent of adults support wholesale repeal. (Polls have clocked support for repeal as high as 61 percent.) Second, support for “comprehensive health care reform” is not the same thing as support for ObamaCare. If Gallup were to ask Cato employees whether they support comprehensive health care reform, my guess is that at least 50 percent would answer yes. (Presumably, Cohn would then write an oped titled, “Even Libertarians Support ObamaCare!”) Advocates of repeal have something else going for them, too: 17 months of consistent public opposition to ObamaCare.
No one is saying that getting repeal through the Senate is likely in the next two years. But the fact that supporters have to shade the truth like this suggests they are nervous.
Virginia Obamacare Lawsuit Dismissed
No, not the lawsuit brought by Virginia Attorney General Ken Cuccinelli (in which Cato has been filing amicus briefs), but rather one brought by Jerry Falwell’s Liberty University. Most notably, the district judge found the individual mandate to be a lawful exercise of Congress’s powers under the Commerce Clause because
individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market…. Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.
This analysis echoes that of the Michigan judge who granted the government’s motion to dismiss the Thomas More Legal Center’s lawsuit in October – and is fatally flawed because everything is an “economic decision” that “substantially affects the national market” in something. If that’s the rationale upon which the Supreme Court ultimately upholds Obamacare, then we are left quite literally with no principled limits on federal power. Something tells me it won’t be so simple, however, even if the forces of darkness big, “self-checking” government prevail.
Nevertheless, the White House blog is understandably delighted with such rulings, trumpeting yesterday’s decision as yet another on an inexorable and inevitable march to the full vindication of an unprecedented assertion of federal power. (Question: Was nobody there paying attention to what voters said about all that November 2?)
In any event, as I said in a recent blog post and op-ed, nobody should yet declare victory or concede defeat. There will be many, many rulings yet, both at the trial court level and on appeal. This will not end until the Supreme Court rules, most likely in June 2012. But if you’re keeping track, the next major event is a December 16 summary judgment hearing in Pensacola in the Florida-led 20-state lawsuit — and we should also soon see a final ruling from the Cuccinelli case right before or after Christmas. Expect the White House to be a bit less chipper about these events.
First Amendment Victory in Second Circuit
As the legal battle against Obamacare continues, we got good constitutional news today in another aspect of health care law. The Second Circuit Court of Appeals, based in New York City, ruled that statutes restricting commercial speech about prescription drug-related data gathering are unconstitutional. The court emphasized that the First Amendment protects “[e]ven dry information, devoid of advocacy, political relevance, or artistic expression.”
The case, IMS Health v. Sorrell, concerned a Vermont law that sought to constrain various aspects of prescriber-identifiable data gathering, dissemination, and use. The state argued that such information collection and exchange could induce doctors to alter their prescribing practices in ways that impose additional costs on the state’s budget. Most notably, the law outlawed the transfer of doctors’ prescription history to facilitate drug companies’ one-on-one marketing—a practice known as “detailing” —because the state believed detailing drives up brand-name drug sales and, in turn, health care costs. Thus, the Vermont law would have eliminated a key part of the market by hindering economic incentives to comprehensively gather the data. The state argued that the data sharing isn’t “traditional journalistic activity,” it’s not protected by the First Amendment.
Cato joined the Pacific Legal Foundation, the Progress & Freedom Foundation, and two trade associations to file an amicus brief in the case in support of the plaintiffs challenging the law. The Vermont Prescription Restraint Law (and the similar laws enacted in New Hampshire and Maine) imposed unprecedented censorship on a broad swath of socially important information. We are gratified that the Second Circuit upheld First Amendment protections here and congratulate the plaintiffs on their victory.
You can read Cato’s brief here and the Second Circuit’s decision here.
ObamaCare’s ‘Medical Loss Ratio’ Regs Encourage Fraud, Unnecessary Medical Services
Yesterday, the U.S. Department of Health and Human Services issued regulations implementing ObamaCare‘s rule mandating that health insurers maintain minimum “medical loss ratios.”
Opponents of private health insurance have made a fetish of MLRs – a statistic that insurers developed to show investors the share of premiums they spend on claims. (“See? They call it a ‘loss’ when they pay for medical care — that proves they’re evil!”) So the opponents of private health insurance who crafted ObamaCare included a rule requiring carriers to spend at least 80 percent of premium revenue (large employers must spend 85 percent) on “your health care.” What could possibly go wrong?
The folly and false compassion of ObamaCare are on full display in the MLR regs, where government bureaucrats have evidently determined that unnecessary and harmful medical services, and even insurance fraud, are in fact good for patients. Okay, HHS bureaucrats don’t actually think that. But ObamaCare’s MLR regs include fraud prevention and utilization review among the administrative expenses on which carriers may spend no more than 20 percent of revenue (15 percent for large employers). That will effectively discourage insurers from policing fraud and conducting utilization reviews that protect patients from the expense and risks of unnecessary medical tests and procedures.
ObamaCare’s fatal conceit is that government bureaucrats can determine and deliver what is good for patients. Consumers will continue to feel the pain – costs will continue to rise and more insurers will flee the marketplace – until Congress gives up that conceit and repeals this law.
Filed under: Cato Publications; General; Government and Politics; Health Care
RomneyCare’s ‘Connector’ a ‘Legal Pit Bull’ Forcing Fed-Up Mass. Residents to Pay
According to the Boston Herald:
The state’s health insurance connector — the highly touted agency that aims to bring cheap medical care to the masses — has turned into a legal pit bull by aggressively going after a growing number of Bay Staters who say they can’t afford mandated insurance — or the penalties imposed for not having it.
The Commonwealth Health Insurance Connector Authority is cracking down on more than 3,000 residents who are fighting state fines, and has even hired a private law firm to force the health insurance scofflaws to pay penalties of up to $2,000 a year.
All told, more than 7,700 people have appealed state fines for not having health insurance, according to connector spokesman Richard Powers. The agency has hired several private attorneys at $50 an hour to hear many of the appeals, and some 3,150 of them have been denied — and the losers told to pay up.
The connector has also hired the Hub law firm Bowman & Penski — at $125 an hour — to defend itself against 13 lawsuits filed by fed-up taxpayers who insist they can’t afford state required insurance premiums or the escalating fines.
For more on RomneyCare, see “The Massachusetts Health Plan: Much Pain, Little Gain.”
More Proof ObamaCare Is a Sop to Industry
Reuters has helpfully published another article demonstrating that ObamaCare‘s biggest cheerleaders are the insurance and drug industries. That’s because, barring repeal and despite the Obama administration’s fatuous rhetoric about standing up to the special interests, ObamaCare will shower those industries with massive subsidies. Excerpts follow.
Health Overhaul Should Press Ahead: Industry
By Susan HeaveyThu Nov 11, 2010 1:39pm EST
NEW YORK (Reuters) – Repeal reform? No thanks, say health insurers, drugmakers and others looking for a clearer picture of the U.S. healthcare market after the bruising passage of the controversial overhaul law…
The new healthcare law created “a stable, predictable environment, however painful it has been in the short term,” GlaxoSmithKline Plc’s (GSK.L) Chief Strategy Officer David Redfern said at the summit in New York.
“When you are running a business, the hardest thing is changing policy and a changing environment because it is very difficult to plan, predict and ultimately invest in that sort of scenario,” he said, echoing other speakers.
True enough. How’s a firm supposed to develop a business plan around uncertain taxpayer subsidies?
Health officials must still hammer out how to implement the law and finalize hundreds of new rules and regulations. Many such details are key, as the sector looks to adjust its business for 2011 and beyond.
Wait, I thought the law created a “stable, predictable environment” and repeal would create uncertainty. Hmmmm.
“Anti-reform made good talking points before the election,” said the Department of Health and Human Services’ Liz Fowler, adding that people “will find more to like than to dislike” in the law once it is more in place.
Boy, they just won’t let go of that chestnut, will they? Remember: voters need re-education, not the Obama administration.
Even insurers, which were vilified by Democrats in passing the reforms, said they don’t want a repeal, even as they push for clarity on forthcoming rules and seek additional changes.
Cigna Corp CEO David Cordani and Aetna Inc President Mark Bertolini both urged the nation to move forward on the overhaul.
Even the insurance industry is against repeal? The folks whose products the law will force 200 million Americans to purchase? Never saw that coming.
Since the start of 2009, the Morgan Stanley Health Care Payor index has risen 75 percent, outperforming a roughly 35 percent rise for the broader Standard & Poor’s 500 index.
You don’t say.
Unlike insurers[!], drugmakers have escaped largely unscathed under the law, although there is still incentive to shape it.
Filed under: Cato Publications; General; Government and Politics; Health Care
Tea Party Not Keen on RomneyCare
The following exchange took place yesterday on the Christian Broadcasting Network between host David Brody and Tea Party Express Chairwoman Amy Kremer.
Brody: Mitt Romney…on the Massachusetts health care situation, you’re going to tell me that’s going to fly in the Tea Party movement?
Kremer: Absolutely not…I’m being honest here…You can’t get away from that. And that’s the thing is, the days of people being able to do one thing in their state in front of a microphone, and then going to Washington and doing something else. I mean, the Internet, and 24-hour news cycles changed it all, and these people don’t have short memories, they’re digging up everything from the past, and they’re not going to let go of the health care.
Hmm. I wonder why…
Video of the CBN exchange is available here. For more on RomneyCare, read “The Massachusetts Health Plan: Much Pain, Little Gain.”
Filed under: Cato Publications; General; Government and Politics; Health Care
ObamaCare = A Bailout for Private Insurance Companies
This Reuters headline says it all: “Cigna CEO: Don’t repeal U.S. health law.”
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
