Tuesday, February 01, 2011
A Bit More On Health Care Reform
The necessary and proper clause. Type 2 bbelow thinks the individual mandate is constitutional (or at least probably so). He's writing about the income tax, but I think he really means the Necessary and Proper Clause.
Links on that. XXXIlya SominXXXX Kerr at Volokh. NO! Orin Kerr!!! Not Ilya!!! Kerr thinks Vinson overstepped on the Necessary and Proper reasoning and is still explaining why. Somin thinks otherwise as explained here (from yesterday).
Wikipedia for a definition and background. The debate on this issue dates back before ratification. That is one reason why this has become so interesting.
A short summary which does not do justice:
In Article One, Section 8 of the Constitution Congress is given enumerated powers. The last sentence of that section:
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.As US jurisprudence has developed, this clause has been used very widely, and it is often paired with the Commerce Clause to allow for rather wide legislative scope. The basic argument why this makes the individual mandate constitutional is that it is clear that Congress has the right to legislate and regulate insurance (think Medicare, Medicaid, etc), and therefore, since it has that right, it also has the right to legislate the mandate under the Necessary and Proper Clause.
You can read that section of the Vinson ruling from the post below. If you are interested, here is a Dec 28th NY Times discussion of the increasing role of the Necessary and Proper Clause in the individual mandate litigation. Findlaw review on the clause.
There's now a wealth of discussions of this out there. Randy Barnett's brief (anti). Page 34 of this amicus brief in the Florida case (INTERNAL page 34) starts the discussion of the Necessary and Proper Clause, Commerce Clause and the individual mandate. I think this one is pretty good.
Have fun. I'm still working on the data dump.
None of us will know whether this is constitutional until the SC finally rules. We are entitled to our own opinions, but in the end, only nine count. That is, unless the widespread unhappiness with the individual mandate eventually produces a constitutional amendment, which is becoming more and more possible.
This could not ever have been the subject of an SC ruling, because no Congress has ever before came up with the bright idea of mandating that an individual be forced to buy something from a private company.
We are all forced to participate in SS and Medicare, but that is a government program.
The CRS pointed this out to Congress. And as I commented below, the mandate could have been implemented in ways that would have clearly been constitutional under precedent. Instead, a novel means was chosen.
That's the comical thing about all this. Congress could have created a mandate that was constitutional. But they were intent on maintaining a fig leaf of fiscal responsibility, so they used a legal construct that most people agree is a bridge too far.
What's funny is that nobody, nobody, nobody thinks the fig leaf was covering anything anyway. They may as well have just constructed it as a tax and been done with it.
I think the SC will probably rule that it's constitutional anyway, but the power grab is blatant enough that a favorable ruling will just begin the battle over an amendment.
Also, it is not at all clear who this ruling applies to. Even though Vinson is in Florida, 26 states were a party to that suit. So, unless a court in an individual state has ruled differently, then at this point the decision is binding in 26 state (pending an in junction or whatever).
What is also surprising is the stance by the Obama administration that the decision changes nothing and that implementation of the health care law should continue as scheduled. It is not often an administration comes right out and says it is going to ignore a major court ruing.
As Neil points out, Congress could have decided to avoid the problem by creating a different system that made the government a single payer for all medical claims. But, that would have involved tremendous tax increases that would be out front for all to see. By creating this "hybrid" they were able to push a lot of the costs onto the states and onto policy holders. For example, eliminating lifetime maximums and keeping people on their parents insurance until age 26 have costs. Those costs are spread over all the policy holders, so we each see our health care insurance costs go up, but we are likely to blame the insurance companies rather than the Democrats. This is just another example of our government playing "hide the ball".
Here is an article explaining the current situation.
The federal government has announced that it is appealing in the eleventh circuit. It is also considering seeking a stay.
However Vinson's decision is only controlling law in his district. Now any party can go to another federal district court and seek a judgment against the US for ignoring the ruling, but it may not be beneficial for that party to do so. Another district court does not have to agree with Vinson.
There are 94 federal districts in the US judicial system. There are 12 circuits, each having jurisdiction over a number of districts.
Once one or more of these cases has been appealed to a circuit and been decided, the losing party can then appeal to the Supreme Court, which has jurisdiction over the entire country.
Federal Court system basics.
US district courts have to hear most types of claims as long as the plaintiffs can establish jurisdiction and standing. Appellate courts do not have to take most appeals.
Because, for example, NFIB is a national organization, NFIB chose to file the suit in this particular district in part because they considered that they had a much better chance of winning there.
And the Eleventh Circuit is considered one of the more conservative-leaning circuits, so it is to the advantage of NFIB, and the states to proceed upwards there.
From the administration's standpoint, they would like the first recourse to a circuit to be in a circuit that would be more likely to sympathize with their arguments. However seeking a stay generally has to be done through court or appellate district which handed down the judgment.
So the admin is not really ignoring this; the administration is probably wondering about the feasibility of seeking a stay by drawing in other courts and going through another court district.
I am not sure of the status of all the litigation, so I am not sure if they have a real chance of doing that.
There are also now political considerations. No matter that the talking heads think this is judicial activism. The majority of voters do not agree that the federal government has the right to mandate that they buy a particular product from a private company.
As this progresses on, it will be more and more embarrassing for the administration to be advancing that argument once it is discussed publicly.
Randy Wray and I have argued previously that the health care reform plan represented primarily a huge and unprecedented mandate to benefit private insurers. Under the new “reform,” 50 million people are being told they must turn over their paychecks to private companies. Of course this was bound to lead to court challenges. And it is hard to fault the Virginia and Florida courts for rejecting the mandate. The auto insurance analogy that has been deployed in favor of the mandate is flawed because NOBODY is forced to drive a car."
Unless the SC rules 9-0 one way or the other, we still won't know. The SC does make mistakes, as SC rulings have stated.
One of the major points of contention during the whole Iraq affair of the last ten years was the imposition of case law which is vehemently opposed in many other cultures all of which are older and more experienced than ours. Case law's biggest problem is that it can be taken to absurd levels, one of the absurd levels being that every stupid court decision in the past has eternal validity.
I don't know who Marschall Auerback is, but he does work for the Roosevelt Institute. It looks as if George Soros son, Jonathan Soros, is also a staff member there. Stilitz is also there, so it looks a ore than a bit left to me.
I can deduce that Auerback is a Keynesian. He also has no fear of additional sovereign debt. But, from the link you posted, it is clear Auerback is s single payer advocate. Now, I doubt there is a chance in the world any kind of single payer could pass Congress. So, that is not plan B. It is more like plan double Z prime.
I also disagree with Auerback that this bill was some kind of benefit to the health insurance companies. Clearly, the mandate was designed to help pay for some of the mandated benefits like no exclusion for preexisting conditions. My take has been the insurance companies would have preferred no bill at all rather than this because now they are under the thumb of the Federal Government. They got the best deal they thought they could get. But, you may remember all the thuggish threats from Obama and Sibeleus to bring them along and keep them in line. Remember about "getting a seat at the table"? I suspect the long term plan of the administration is to rid themselves of the insurance companies.
They are invariably very big on personal liberty, and very well educated in their particular specialties. They also think that government can provide all manner of things without threatening their personal privileges, which may be true in their cases. I have not had this discussion with any of them, but I would not be surprised if they are against the mandate on personal liberty grounds, while still believing that the government can and should mandate the insurance companies to simply cover everyone.
Marshall Auerback is a portfolio manager with over 14 years' experience. He spent 9 years with GT Management in Hong Kong and Japan, initially covering the stock markets of Hong Kong, Korea, South East Asia (Thailand, Indonesia, the Philippines, Singapore, and Malaysia), Australia, and New Zealand, and then later from Tokyo, the Japanese equity market. In 1992, he moved to New York, where he ran an Asia/Pacific hedge fund for the Tiedemann Investment Group. During his tenure there, he also oversaw the Group's investments in the CIS (Russia and the former Soviet Republics), and Africa. Since the beginning of 1996, Mr. Auerback has been a partner in Veneroso Associates. Mr. Auerback graduated magna cum laude from Queen's University and later earned a law degree at Corpus Christi College, Oxford University.
I Googled that, too. The problem is it tells me very little. I had to read some of his stuff to see he was a Keynesian, unafraid of additional sovereign debt, and a single payer advocate. We need to know more than a simple biography to understand his motivations.
The UK has a two-tier medical system. There are private non-NHS clinics and treatment facilities, and companies often provide supplemental private insurance which pays for that type of thing, at least for higher-ups.
The paradox of the UK system is that most people get the bulk of their medical care through NHS. There is implicit rationing, although on the whole it is pretty good. When it fails it is terrible.
But this makes care through the private system surprisingly affordable - far cheaper than it would be in the US. The private system pays no cost-shifting expenses WHATSOEVER.
In the US, government insurance (chiefly Medicare and Medicaid) underpays for services, and privately insured people pay far more for their care than they would if they were in the UK and using the private system.
If you are an upper-class person in the UK, you think the NHS is wonderful. It is not so wonderful for those who must use it, especially for those in the less well-funded hospitals.
A person on government insurance in the US gets much better standards of care than most UK people do, and that is because the standard of care is conformed to the standard of care provided to the upper tier of persons (those using the private system) in the UK.
It's highly doubtful that Auerback understands the economics and market forces of the US medical system. It's highly doubtful that he fully understands it in the UK.
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