Tuesday, March 23, 2010
Health Care Reform And Constitutional Issues
Most debates over the act have centered on the constitutionality of the individual mandate. In the comments on this post, Carl at NOFP says he thinks the court will find the individual mandate constitutional, because the mandate comes in the form of a tax for failure to maintain government-approved health insurance. My position from the beginning has been that he is right.
A successful challenge might be mounted only if someone comes before the court having been imprisoned for being unable to buy insurance while affording medical care, and consequently having been jailed for not being able to afford to pay the extra tax. But it is doubtful this will happen, because everybody is aware that there are lines one cannot cross. For example, suppose the federal government passed a law saying that anyone who didn't have a job had to pay all their income to the federal government in income tax. That law would be ruled unconstitutional. There are limits.
Based on the information in the Bloomberg article, the states are concentrating on violations of their own sovereignty and arguing Printz v United States as a precedent. That was the case in which the SC struck certain mandates for local law enforcement to do background checks under the Brady Act.
From the Printz syllabus:
(c) The Constitution's structure reveals a principle that controls these cases: the system of "dual sovereignty." See, e.g., Gregory v. Ashcroft, 501 U.S. 452, 457. Although the States surrendered many of their powers to the new Federal Government, they retained a residuary and inviolable sovereignty that is reflected throughout the Constitution's text. See, e.g., Lane County v. Oregon, 7 Wall. 71, 76. The Framers rejected the concept of a central government that would act upon and through the States, and instead designed a system in which the State and Federal Governments would exercise concurrent authority over the people. The Federal Government's power would be augmented immeasurably and impermissibly if it were able to impress into its service--and at no cost to itself--the police officers of the 50 States. Pp. 18-22.Maybe Carl will comment on this.
(d) Federal control of state officers would also have an effect upon the separation and equilibration of powers between the three branches of the Federal Government itself. The Brady Act effectively transfers the President's responsibility to administer the laws enacted by Congress, Art. II, §§2 and 3, to thousands of CLEOs in the 50 States, who are left to implement the program without meaningful Presidential control. The Federal Executive's unity would be shattered, and the power of the President would be subject to reduction, if Congress could simply require state officers to execute its laws. Pp. 22-23.
(e) Contrary to the dissent's contention, the Brady Act's direction of the actions of state executive officials is not constitutionally valid under Art. I, §8, as a law "necessary and proper" to the execution of Congress's Commerce Clause power to regulate handgun sales. Where, as here, a law violates the state sovereignty principle, it is not a law "proper for carrying into Execution" delegated powers within the Necessary and Proper Clause's meaning. Cf. New York v. United States, 505 U.S. 144, 166. The Supremacy Clause does not help the dissent, since it makes "Law of the Land" only "Laws of the United States which shall be made in Pursuance [of the Constitution.]" Art. VI, cl. 2. Pp. 24-25.
(f) Finally, and most conclusively in these cases, the Court's jurisprudence makes clear that the Federal Government may not compel the States to enact or administer a federal regulatory program. See, e.g., New York, supra, at 188. The attempts of the Government and the dissent to distinguish New York--on grounds that the Brady Act's background check provision does not require state legislative or executive officials to make policy; that requiring state officers to perform discrete, ministerial federal tasks does not diminish the state or federal officials' accountability; and that the Brady Act is addressed to individual CLEOs while the provisions invalidated in New York were directed to the State itself--are not persuasive. A "balancing" analysis is inappropriate here, since the whole object of the law is to direct the functioning of the state executive, and hence to compromise the structural framework of dual sovereignty; it is the very principle of separate state sovereignty that such a law offends. See e.g., New York, supra, at 187. Pp. 25-34.
The suits do appear to have some merit, since there are mandates in this bill for the states to do certain things, but I am confused about how this is different from the current structure of Medicaid. It will be interesting to see the argument in full.
There is one difference that stands out in at least one version of the law, which sets payments for Medicaid. All Medicaid programs are run by states. The federal government sets minimum standards for coverage and gives money to defray part of the costs to the state (same with SCHIP), but the states set the payment levels and administer the programs.
But I think this challenge may not succeed, because in theory the states could opt out of Medicaid altogether. That would, of course, promptly bust many hospitals which would still be required under federal law to provide care for anyone whose life or bodily integrity is threatened, so in fact they cannot opt out, which is why they are suing.
I think that constitutionality is somehow involved here under whatever rubric one argues it, because I cannot see how some states can possibly afford to implement the law. Some of the other touted benefits of the law (like the high-risk pools) are also federal mandates to the states. I don't think all of the states can afford to implement those pools, either.
To me, very little about this law (the Senate version is now law; the House version may become law later) is as one reads in the press. I cannot suspend disbelief long enough to believe that even current benefit levels will survive in most the states, much less these new mandates. The states are facing budgetary crunches stemming from demographics of their own, and their budgets are in some cases even more imperiled than the federal budget.
I wasn't joking when I said this was going to help legal employment; it will. I read everywhere that this law will not be repealed. All I know is that it cannot go into effect because in reality the money is not there. So it will be changed.
In addition, should matters work out as I have suggested (that many persons will not pay for insurance until they become sick, and then enroll), there is a real possibility that insurance companies will start to go bankrupt. Should that occur, an insurance company threatened with bankruptcy due to this law can litigate and might win. Commercial associations also have the basic right to exist under the Constitution. The government need not save them when they fail, but the government also cannot force them to annihilate themselves. Corporate entities do have some constitutional due process rights. The most recent case I can remember is the 2008 Blackwater suit against San Diego; a district judge ruled in Blackwater's favor by allowing it to occupy the property. The Blackwater complaint is here.
There is a rather interesting (and in this context, quite amusing) law paper "Dispatch from the Supreme Court Archives: Vagrancy, Abortion, and What the Links Between Them Reveal About the History of Fundamental Rights" by Risa L Goluboff available for download. I had only a vague recollection of some of these cases, searching for text led me to this paper. What sent me on this search was a memory of some of Douglas' flights of rhetoric about socially approved and disapproved lifestyles. In essence, the US government is trying to create a new type of vagrancy law with this reform. It is no longer not having a job which will be sanctioned as socially harmful; now not having insurance will be so viewed.
I would invite readers to read the paper above, especially if the reader in question is not a lawyer. In many ways, the left of today has become the right of the 1960s with this law. Demanding conformance to a socially responsible standard of economic performance is almost a direct contradiction of the concepts of individual autonomy and social freedom from state control that informed the left's beloved 60s jurisprudence.
We have come full circle. I suspect that in the Douglas era this law would not stand. Scalia and Thomas have expressed suspicions about large parts of the substantive due process doctrine. We'll see. It depends on how far our government overreaches itself.
We may well be in litigation over this law for seven or eight years.
Suppose one lives off the fat of the land, and prefers to trade for the few instances of health care he needs. Have we just outlawed 19th century lifestyles now? Or is such a person's income considered so low that he doesn't have to buy it anyway?
M_O_M, my understanding is that the state AGs aren't suing over the mandate because they don't have standing, not because they have determined it to be constitutional. I think someone actually has to pay the tax first in order to have standing.
The second issue is the reach of the commerce clause itself. There, the claim is that the provision allows the regulation or prohibitions of the sales of goods/services, but not the complelled purchase. I think this sophistry--there is no such limit in the Constitution, nor would it make sense to infer one. We already compel the purchase of Social Security and Medicare/Medicaid. Though those are government services, why should the compelled purchase of a private service be different? By analogy, see Berman v. Parker, 348 U.S. 26, 33-34 (1954) (upholding condemnation for private urban renewal programs) ("The public end may be as well or better served through an agency of private enterprise than through a department of government -- or so the Congress might conclude. We cannot say that public ownership is the sole method. . ."). And, as Orin Kerr reminds, courts have set almost no limits in the scope of the commerce clause, at least where genuine purchase of goods or services are involved.
Requiring the purchase of a service subject to penalties is new territory, I think. The closest thing is mandatory car insurance, but even that is not really mandatory. One can simply not drive.
I don't understand that statement. The types of taxes allowed to be levied are pretty clearly stated in the Constitution. Conversely, if the commerce clause can be interpreted to allow the imposition of a universally compulsory activity and a universal poll tax, then there are no limits whatsoever to government.
I'm not saying the Court won't rule that way. The Court has not yet been willing to put much of a restriction on the Commerce Clause, but if they don't do it now then they've pretty well gutted the Constitution. Congress could, for example, require everyone to subscribe to the New York Times (an educated citizenry is necessary...). Or require everyone to purchase a new General Motors automobile every few years (to get gas-guzzlers off the road). If this is within the Commerce Clause, then what isn't?
Mind you, I think compulsory insurance is stupid. But not all stupid laws are unconstitutional.
Automobiles and newspapers have also been held to be interstate commerce, and I gave an overriding state interest for each example. The specificity could be easily handled the way they always do. (...must be purchased from a company based in Flint, MI, having been founded in September 1908...)
How do I overstate the case?
I realize you're not arguing for compulsory insurance, and I'm not optimistic that the Court would rule it unconstitutional, I'm just demonstrating the obvious consequences here.
See, for example, Gonzales v. Raich. That case made it clear that there is nothing beyond the reach of the Commerce clause. In no way did the privately grown marijuana affect commerce, and the commodity was not even a marketed commodity (as in Wickard, in which privately grown wheat for one's own consumption was ruled within the Commerce clause).
So forget the Commerce clause. The Supreme Court (essentially this SC) has already ruled that the Commerce clause covers anything Congress wants to regulate, even if it is not commercially traded or the private generation of an item that is not even commercially traded.
You have to understand that the Commerce clause means nothing except that Congress can do anything it wants to do, according the Supreme Court.
If the people disagree (I do), the only remedy is a constitutional convention.
There is one possible avenue that would make a very interesting test case.
As regulations settle over doctors who accept any insurance, it is increasingly likely that people who can afford to pay a few hundred in cash for access to a doctor who works for his patient will do so.
I certainly intend to do that! I'm not interested in learning that I am officially dead in my doctor's office.
What if people were to set up a joint trust which would pay for beneficiaries' medical expenses? Catastrophically speaking? The same could be done for a community practice.
I'm sure Congress would want to deem this "insurance", but it would have a hard time writing a law to forbid this without falling over the many existing trusts which do have provisions for the payment of medical expenses.
I'm going to think about that some. There are clauses in the Senate law that really strike at physician-owned facilities, but basically as long as one exits the system entirely, one is still free.
to most providers. Hospitals will take a 9.5% cut.
Looks like health care jobs are going to take a pay cut.
I don't see why this wouldn't be all-new territory. If this is held to be constitutional, then I agree it's time for a convention.
The burden on states is not sustainable.
MA has cut its payments quite a bit over the last few years also. I believe CA has.
So maybe we'd better start thinking about a constitutional convention.
We have been through two stoned-out Congresses (the GOP and now the Dems), and there is no real indication that Congress will return to sanity any time soon. It may be time to control Congress in other ways.
The same thing is going to be true for tampon taxes, genetic screening subsidies, testing for learning disabilities in children, and so on. The classical liberals and classical conservatives are both going to learn in a hurry that a faceless bureaucracy in D.C. is effectively immune to their pet causes.
I really think this is important, because it makes allies out of the classical liberals and small-government conservatives, while exposing the Democrats as a mob of power brokers. We'll see the same thing with tampon taxes, genetic testing subsidies, and so forth.
The broad Commerce Clause interpretation also has a shocking effect that the Democrats have not yet realized: it has no exception for foreigners. If health insurance is effectively a license required for interstate commerce, then all those Chinese container ships must be embargoed until the supply chain gets licensed.
But what's the specific agenda of the convention? I agree with Simon Jester that the attractive coalition here is the 6-pack liberals with the small-government conservatives.
The weakness in that plan is where and when you get sick. If local hospitals are short-staffed and don't have the equipment, your scheme doesn't help.
But as long as those local hospitals do have decent facilities, of course the wealthy and the well-off are going to get their medical care, one way or another. In a lot of ways, the "reform" works out very well for those with high assets. It's really hospital insurance - it should shunt enough money into hospitals to keep them running.
What it won't do is get the average person good medical care should he or she become very ill, unless the average person is willing to lose house, etc. It's really a bill that shifts resource utilization from the poor and the lower to mid-class to the upper class.
If you look at the history of many famous hospitals, they started in the way that you describe.
As for a constitutional convention, if DC irks enough people it will happen. Americans are not very revolutionary, and the Constitution does provide quite legal remedies for this sort of thing. The constitutional remedy also has the merit of requiring widespread popular support, so we know we won't get too radical.
Of course, my theory is that the least radical solution is always the best, so I'm just in the "throw the bums out" mode. After the election, I'll go to constitutional convention mode.
I don't think Congress understands the people of the country any more. It is also notable that the angry constituents are reading the bill whereas our critters (and apparently our president) haven't. This may explain the discrepancy in views.
If you are paying $700 because you can't afford to pay the subsidized premium and the bronze copays (27-30%???), then you have really lost the medical buying power of that $700.
I keep trying to squint at the numbers and make them look better, but the bottom line is that many people buying insurance on the exchanges will be acutely underinsured.
Also this costs a lot; I'd rather see Congress subsidize HSAs for poorer people and let them buy catastrophic coverage. The old major medical policies worked for most people, and that's really the only way to control costs.
Of course, even that policy wouldn't work unless Congress raised Medicare and Medicaid reimbursements to basically pay for that care. The reason the costs to those who aren't in government insurance have raised so high is because they are paying for the government programs when they walk into the door of a doctor's office, a clinic or a hospital.
Such things are for the staff to work out with the nice folks who show up to take everybody out to lunch all the time.
1) Interstate: Almost everything is interstate. In Wickard v. Filburn, 317 U.S. 111, 125 (1942), the Supreme Court held that even grain grown for home consumption qualified: "But even if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce and this irrespective of whether such effect is what might at some earlier time have been defined as 'direct' or 'indirect.'" In U.S. v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 550 (1944), the court found that insurance similarly qualified as interstate commerce. Given that, there is no serious 10th Amendment claim.
2) Commerce: Neil says the clause "never been interpreted as meaning they may require the purchase of something," which is correct. But, in modern case law, the only circumstances not considered commerce are those not involving a genuine commercial transaction. Take, for example, United States v. Morrison, 529 U.S. 598, 613 (2000), striking down a Federal law providing for a private right of action for victims of gender-motivated violence: "[G]ender-motivated crimes are not, in any sense of the phrase, economic activity." The purchase of insurance, no matter if compelled, unquestionably is economic activity.
Conclusion: The new "mandate" to buy health insurance will be upheld as Constitutional.
It levies a "fine", with associated jail time for non-payment, if a citizen fails to engage in a specified commercial transaction.
If the Court finds that is constitutional, there are no limits on government power. They can instruct us what house we must purchase, what college we must attend, what profession we must enter...
Neil: The Feds probably couldn't tell you what home to purchase. But they probably could tell you to purchase one, if they subsidized your doing so. Same with attending college, albeit not a specific college. In each case, they're regulating commerce--the choice of home or college might be beyond commerce, and more like the gender-crimes law invalidated in Morrison. I think mandating any particular profession would probably not be considered commerce, though the Feds can -- of course -- require one to work as a condition for economic assistance, which has never been thought unconstitutional.
If Congress has the ability to legislate the compulsory purchase of an insurance plan containing defined characteristics, they have the ability to legislate the compulsory purchase of ANY good or service having defined characteristics. There's no subsidy required, although as a practical matter it may be necessary.
They can certainly mandate the purchase of a particular curriculum of training, and they can mandate that one work in a profession utilizing that training until the "tuition" is paid off. The state might have an overriding interest in doing this to, let's say, guarantee a reasonable supply of doctors.
They can mandate the purchase of a home, and to some extent they can determine where the home will be. They can easily, for example, mandate a density requirement to force everyone into the cities.
I'm not saying such things are imminent, but it would be in politicians' interest to enact these kinds of things, and if this precedent stands there is no protection from such.
In particular, the states will have to pay out of their pockets for the administrative costs.
But I think the states will fail in this claim because in theory the states could just opt out of Medicaid altogether.
Neil - regarding the mandated purchase, in fact Congress isn't requiring you to purchase an insurance policy that meets their guidelines. They are just charging a tax if you don't.
Carl, the subsidy issue isn't relevant to the individual mandate - just to the states' position with regard to the Medicaid provisions. I think you misunderstood Neil.
But I do agree with your remarks about power. Under the Commerce clause as interpreted by the SC, there are virtually no limits to Congressional power.
And that is why Commerce doesn't have anything to do with successful challenge. At some point, Congress will overstep the tolerance levels of even the Supreme Court, and when they do it would be a substantive due process clause which would succeed, or a state sovereignty challenge.
Could Congress mandate that everyone in the US save a certain percentage of their salary each year and put it in T-bills? Would the court agree that that percentage could be 50%, even if that percentage was effectively impossible for many people, and would cost many people's lives?
My theory is that I think the people's tolerance level for this sort of thing will be exhausted far more quickly than the Supreme Court's.
Could Congress mandate that everyone buy pricey organic produce when that would mean that some people with limited funds starve to death? I say no - but I think the citizens will draw the line first. And we're getting close to that line.
Anyway, I suspect the Commerce Clause would be an excellent focus for a Constitutional Convention. All manner of mischief has sprung from that clause, and it seems like everybody could agree on putting some limits to it.
Neil: You're right that the consequences of non-purchase are closer to a fine than a tax. But, I'm not sure that's a difference that makes a difference--i.e., that the reach of the taxing power is different than that of the commerce clause (at least for activities, such as insurance, that plainly are interstate). And be careful what you wish for--the possibility that a Constitutional convention might "Christmas-tree" all sorts of new Amendments, not necessarily restrictive of government power, is to great a risk for my taste.
ways they may try to fix it but will fail:
another unconstitutional idea they could use is to use taxing and spending and punish throguh lets say increased fee to the IRS when you pay you taxes if you dont buy,but remember congress can only use taxing and spending for regulation and revenue raising purposes.Congress cannot use its power to tax solely as a means of controlling conduct that it could not otherwise reach through the commerce clause or any other constitutional provision( Bailey v. Drexel Furniture, congress can not tax to punish conduct).
They also may use the carrot stick approach for individual citizens conditioning some government benefit on buying, but this would be impossible since no one government benefit, ignoring one we are already mandated to be a part a; these would be off limits for other reasons, applies to all citizens therefore they could not accomplish everyone having it.
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