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Tuesday, March 27, 2012

ACA's Dead, Jim!

Based on the transcript, anyway. Of course this just may be one of those dramatic "reversible deaths" so beloved of script writers, but it does provide some superb ham acting opportunities for legal commenters.

The justices are too concerned about limiting principles at this stage:
MR. CARVIN: It is clear that the failure to buy health insurance doesn't affect anyone. Defaulting on your payments to your health care provider does. Congress chose, for whatever reason, not to regulate the harmful activity of defaulting on your health care provider. They used the 20 percent or whoever among the uninsured as a leverage to regulate the 100 percent of the uninsured.

JUSTICE KENNEDY: I agree -- I agree that that's what's happening here.


JUSTICE KENNEDY: And the government tells us that's because the insurance market is unique. And in the next case, it'll say the next market is unique. But I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets -- stipulate two markets -- the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries.

MR. CARVIN: And, Your -- I may be misunderstanding you, Justice Kennedy. I hope I'm not.

Sure, it would be perfectly fine if they allowed -- you do actuarial risk for young people on the basis of their risk for disease, just like you judge flood insurance on the homeowner's risk of flood. One of the issues here is not only that they're compelling us to enter into the marketplace, they're not -- they're prohibiting us from buying the only economically sensible product that we would want, catastrophic insurance.

Everyone agrees the only potential problem that a 30-year-old, as he goes from the healthy 70 percent of the population to the unhealthy 5 percent -and yet Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance. And the reason they do that is because they needed this massive subsidy.

Justice Alito, it's not our numbers. CBO said that injecting my clients into the risk pool lowers premiums by 15 to 20 percent.

So, Justice Kennedy, even if we were going to create exceptions for people that are outside of commerce and inside of commerce, surely we'd make Congress do a closer nexus and say, look, we're really addressing this problem; We want these 30-year-olds to get catastrophic health insurance.

See, the SC would rather not interfere with Congress, mostly for very good constitutional reasons. But occasionally they do, for very good constitutional reasons. And therefore Kennedy would probably prefer a limitation way of confining this issue to health care, but he's not quite seeing that, and there has been cross-argumentation preceding pointing out that in many ways, health care is no different from any other market.

No one can say for sure how this will work out in practice, and SC justices do not like to intervene early. But the issue about early intervention is that by choosing an expansive solution to a limited problem, they put the justices in the position of, in Kennedy's words earlier:
JUSTICE KENNEDY: Could you help -- help me with this. Assume for the moment -- you may disagree. Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act to go into commerce. If that is so, do you not have a heavy burden of justification? I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?
Kennedy was really focused all through on limitations:
JUSTICE KENNEDY: Well, then your question is whether or not there are any limits on the Commerce Clause. Can you identify for us some limits on the Commerce Clause?

GENERAL VERRILLI: Yes. The -- the rationale purely under the Commerce Clause that we're advocating here would not justify forced purchases of commodities for the purpose of stimulating demand.

We -- the -- it would not justify purchases of insurance for the purposes -- in situations in which insurance doesn't serve as the method of payment for service

-JUSTICE KENNEDY: But why not? If Congress -- if Congress says that the interstate commerce is affected, isn't, according to your view, that the end of the analysis.

GENERAL VERRILLI: No. The -- we think that in a -- when -- the difference between those situations and this situation is that in those situations, Your Honor, Congress would be moving to create commerce. Here Congress is regulating existing commerce, economic activity that is already going on, people's participation in the health care market, and is regulating to deal with existing effects of existing commerce.
Now if Kennedy does accept the "massive subsidy" argument, then Verrilli's arguments here are rebutted. And Kennedy does seem to accept the idea that Congress is trying to force those who do not need insurance into the market to create demand for a lower-priced product. That theory, which it seems that Kennedy admits, removes any possible limitation of the type Verrilli was trying to draw.

I dunno, MoM. Over the years I've been able to reverse engineer the SC's algorithm for making rulings. It is surprisingly simple -- but what else would one expect from a bunch of law academics, all V no M.

1) Is there a ruling that will make it more difficult to prosecute petty, and not so petty, crime? Yes, rule as such; no, proceed to next question.

2) Is there a ruling that will provide for more lawsuits? Yes, rule as such (see the recent EPA case); no, proceed to next question.

3) Is there a ruling that will further the power of the administrative bureaucracy? Rule as such (see Kelo, Obamacare obviously falls into this category).

4) Next case.

This one is big enough I expect a two-fer. They'll rule Obamacare stands at it's core, but strike down some side-issues opening it up for further re-litigation. I highly doubt this will be over and done once they issue a ruling (this summer?).
That's funny, but not quite accurate.

I don't expect the litigation over this puppy to be over until about 2018.

So we have that to look forward to....
Congress is trying to force those who do not need insurance into the market to create demand for a lower-priced product.

Increasing demand can never lower prices.

And of course the bigger problem is the states that shit all over the actuaries by forcing every person regardless of risk to pay the same prices.

The seeds for this debacle were sown when insurance companies were allowed to demutualize. This changed the business plans of all the insurance companies, even those that didn't want to demutualize.

I also think this case the flat-out STUPIDITY of nearly everyone in DC. I know correlation is not causation, but why have there been NO Congresscritters mentioning the increase in student loans and their financial burdens with the reduction in young people's purchase of health insurance? How the hell are people in their 20's, the low-end of their lifetime purchasing power, going to afford to pay back student loans AND pay for ridiculously high health insurance premiums which are price-fixed by the government?
That's funny, but not quite accurate.

I'm hurt, MoM. It took me years to reverse engineer that algo. Yeah, I was a gullible 20-something for most of them, but once I put the finishing touches on it, it has shown itself to be infallible.

How the hell are people in their 20's, the low-end of their lifetime purchasing power, going to afford to pay back student loans AND pay for ridiculously high health insurance premiums which are price-fixed by the government?

That's Boomers for you. The Statist Generation begat the Narcissist Generation. Once the Boomers burned through their parents' wealth they began consuming their children's seed corn.
"ACA's dead, Jim!"

Let it be so!
Charles - I have been wondering the same myself. Trying to imagine a 20 something with a not very good job, paying the required insurance plus the student loan payments is beyond beyond.

One of the reasons that I'm following this so closely is that I think it will have a huge effect on home prices.

The required minimum package is going to be pretty expensive, and these younger people are often going to be forced onto the exchanges.

I think the old and the young are roasted by the law.
I think the old and the young are roasted by the law.

They can always move in together. That should help.

BTW, Mark's been working hard over on his blog lately so I figure it falls to me to keep the snark flowing.

Although with these new captchas I have to wonder if it's really worth the effort.
Do you think I should just take out word verification?

It prevents me from commenting too.

If we all agreed never to click on links not left by known commenters?

I hate the new system.
My browser is set up to show the URL when I hover over a link. I never click a link without seeing where it will take me. I've heard this is not typical. Apparently I have a pretty thick a tech bubble.
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