Health care

Corporate Death Panels: Insurance Hoops

We all remember — how could we not — Sarah Palin’s alarmist fears about how the government would “ration” healthcare, leading nameless, faceless bureaucrats to make decisions that could kill off disfavored elements of the population, like sick children and the elderly. Palin’s li(n)e was always inflammatory, contributing to the climate of extremism Republicans apparently need to win elections, and it was always wrong.

But now, please consider this short anecdote on the rationing we already experience, with privately-held insurance companies.

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I have a friend with a mild medical… thing. It’s not a big deal, and it’s certainly not serious, but left uncared-for, it could prove “unfortunate.” The treatment regimen requires monthly medication — preferably on the 28-day mark — all of which is very expensive.

Prior to the effective date of this part of the Affordable Care Act, his insurer would pick and choose months to deny coverage, claiming it was a “pre-existing condition.” It isn’t. He’s been covered his whole life, and was diagnosed only in ninth grade. Also, it’s not a thing that could go away, absent some radical new medical therapy, a breakthrough in pluripotent stem cells, or (hey, why not) nanotechnology.

Maddeningly, the timing of the denials conclusively proved that the insurer’s goal was to harass its customers out of coverage — not to avoid genuine overcharges. According to his insurer, this monthly medication could be a “pre-existing condition” in April, but not in May; in June, but not in August.  Such arbitrariness doesn’t make sense, unless the insurer’s only goal is to make customers work for their coverage. Imagine an elderly, infirm couple, facing the same strategy: at what point do they just give up? Private insurers may not know, but given enough bad-faith denials, they expect some patients will.

Thankfully, “ObamaCare” made this type of harassment illegal. But here’s the new trick: my friend’s insurer switched to a new “specialty pharmacist,” who’s demanding proof that the treatment is still medically indicated, despite the fact that, as any doctor would know, his condition is permanent. He’s submitted proof to that effect, but the pharmacy & insurer are still stalling the approval. In the meantime, he’s already one week late for his treatment.

As stated, my friend’s condition isn’t serious. This delay isn’t good for him, but it certainly won’t kill him.

But what if it could? Where for-profit healthcare is concerned, the unrestrained free market just doesn’t work. Why do we pretend the private sector is always superior to the public?

The Eleventh Circuit on “ObamaCare”: How the Tea Party Actually Lost

See others’ take on the same.

Set aside the Court’s holding that the individual mandate represents an inappropriate expansion of the Commerce Clause — to which this is a proper rejoinder.  Instead, when reading the monolithic opinion (pdf), take note of Section III.B, which begins on page 55, and rejects the Plaintiffs’ attempt to read serious force into the Tenth Amendment. Functionally, the Court holds that there is no external, Tenth Amendment limitation on the spending power, absent “coercion”:

The Tenth Amendment places certain limitations on congressional spending; namely, that Congress cannot place restrictions so burdensome and threaten the loss of funds so great and important to the state’s integral function as a state—funds that the state has come to rely on heavily as part of its everyday service to its citizens—as to compel the state to participate in the “optional” legislation. This is the point where “‘pressure turns into compulsion.’”

The Court takes the coercion doctrine seriously — which is itself an indication of how far off-base the rest of the decision is — but that’s the extent of the discussion. The larger tea party argument, that healthcare isn’t a government function recognized by the Constitution, was either dropped on appeal, brushed aside, or both. An interesting question here is why right-wing lawyers won’t adopt, as a litigating position, a constitutional vision that their legions of followers purport to believe. Is it because the lawyers know it’s frivolous, invented, fake constitutionalism?

That said, credit to the dissent for going somewhat off the reservation — a dissenter’s sovereign right — to identify the background concern for individual economic liberty, and sharply correct it. Start at page 281, or, I’ve excerpted the best parts below the jump, with legal prose intact, so we can fully appreciate the breadth of the plaintiffs’ alarmism, and the depth of their error.

Long story short, the 11th Circuit’s decision represents a political victory for the increasingly radicalized right. But it’s a defeat for the larger tea party movement’s recidivist vision of the Constitution, in that their soldiers, assured of defeat, have abandoned the battlefield where it matters most:

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A First Appellate Loss for “ObamaCare” Detractors

The Thomas More Law Center — conservative America’s answer to the ACLU — is no stranger to defeat, whose acquaintance they made again today, as the Sixth Circuit became the first court of appeals to issue a decision on “ObamaCare,” and the first to sustain the Act (pdf). The majority decision comes as a thorough rejection of the conservatives’ favorite distinction — between regulating activity and inactivity. Per the Court:

The Supreme Court has never directly addressed whether Congress may use its Commerce Clause power to regulate inactivity, and it has not defined activity or inactivity in this context. However, it has eschewed defining the scope of the Commerce Power by reference to flexible labels, and it consistently stresses that Congress’s authority to legislate under this grant of power is informed by “broad principles of economic practicality.” Lopez, 514 U.S. at 571 (Kennedy, J., concurring). [. . . .]

Similarly, this Court has also refused to focus on imprecise labels when determining whether a statute falls within Congress’s Commerce Power.

Emphasis mine: it’s obvious that the Court sees this as rhetoric — not doctrine. Note too the citation to Kennedy’s concurrence. Pure diplomacy.

Contra some commentators on the right, eager for some good news, the Court expressly declined to consider, and therefore did not reject, the argument that the mandate constitutes a “tax.”

In light of the conclusion that the minimum coverage provision is a valid exercise of Congress’s power under the Commerce Clause, it is not necessary to resolve whether the provision could also be sustained as a proper exercise of Congress’s power to tax and spend under the General Welfare Clause, U.S. Const. Art. I, § 8, cl. 1.

Slip Op. at 26. And, before we get too excited about a “divided panel,” keep in mind that it’s the rare (and weak) case that results in a unanimous vote.

The Vanishingly Fine Line in the ObamaCare Litigation

The Eleventh Circuit breaks with most of its sister courts in not posting audio of argument online. So we must rely on the New York Times’ coverage to evaluate yesterday’s argument in State of Florida v. U.S. Dep’t of Health & Human Services, or, the Republican Party’s ongoing quest to invalidate a health care law that they practically wrote, because of socialism, or something.

Per the Times, the judges chose to focus on the question of when the government could require customers to opt-in to commerce, with this result:

It would be permissible, Mr. Clement [counsel for the states] acknowledged under questioning, for Congress to require insurance or other payment by those who are being treated in an emergency room, because they would already be in the stream of commerce. But he said it was a different matter to require them to pay prospectively for future care. [. . .]

But Mr. Katyal [counsel for the administration] urged the judges to see the law not as a mandate to buy an insurance policy, but as a regulation of the means of payment for care that individuals would inevitably consume. Americans would not be conscripted into the market, Mr. Katyal suggested, because the uniquely unpredictable demand for health care would have already placed them there.

“It’s all about financing,” Mr. Katyal asserted. “It’s about regulating whether people are paying cash or credit.”

With this formulation, I don’t see how we lose. Mr. Clement has conceded that life events may — because of the legal duties implied by their occurrence — bring someone inexorably into the stream of commerce, without any volitional act on the person’s part. But that concession gives away half of his argument, that regulable “commerce” requires an affirmative action. It also acknowledges the free rider problem, while rendering it unsolvable. The government can — but won’t — require insurance at the door of the emergency room. Only ex ante regulation can fulfill that need, and the individual mandate seems narrowly tailored to accomplish it. Mr. Clement would know better than me, but I expect that question was a trap, and he fell right into it.

Separately, it’s very disappointing to see a court not give free, easy access to recordings of oral argument, especially in this day and age. As a matter of good appellate practice, attorneys need to be able to revisit their performance to learn, and to gauge the necessity of post-argument filings (under Federal Rule of Appellate Procedure 28, or otherwise). Get with the times, guys.

“ObamaCare” Now 2 for 3

That’s not counting the six or so judges that’ve tossed challenges to the law on procedural grounds.

The latest sustainer comes from Gladys Kessler, a very highly respected jurist for the District of Columbia’s federal district court. The decision nails this critical point: the Supreme Court has twice rejected the notion that studied avoidance of interstate commerce thereby ducks the Commerce Clause. Opting out of the insurance industry is therefore reachable, because it still impacts the industry.

Critical quotes, from a PDF hosted by ThinkProgress. First, a choice is an action, even if it’s a choice not to act:

As previous Commerce Clause cases have all involved physical activity, as opposed to mental activity, i.e. decision-making,there is little judicial guidance on whether the latter fall swithin Congress’s power. [. . .] However, this Court finds the distinction,which Plaintiffs rely on heavily, to be of little significance. It is pure semantics to argue that an individual who makes a choice to forgo health insurance is not “acting,” especially given theserious economic and health-related consequences to every individual of that choice. Making a choice is an affirmativeaction, whether one decides to do something or not do something. They are two sides of the same coin. To pretend otherwise is to ignore reality.

And second, tea party hysterics are not constitutional arguments. Slip Op. at 45.

The crux of Plaintiffs’ arguments is that [the individual mandate] is an unprecedented attempt by Congress to regulate individual behavior, and thereforethreatens individuals’ freedom of choice. Appealing as this emotionally charged argument may sound, the ACA is not as unprecedented as Plaintiffs claim: as already discussed, Congress’s broad power to regulate individual behavior under the Commerce Clause is well established.

Slip Op. at 54. Ouch.

But the real fun starts late in the opinion. Plaintiffs in this case tried to state a claim under the Religious Freedom Restoration Act (RFRA), a Gingrich-era publicity stunt, summarily limited by the Supreme Court on most of its important provisions, that would have enlarged protections for religious conduct otherwise illegal, or limitable, under laws of general application. Naturally, the principle appeals to the Christian hard-right’s huge persecution complex but, as stated, RFRA was virtually neutered by City of Boerne v. Flores, 521 U.S. 507 (1997).

Plaintiffs didn’t get the memo, and argue, instead, that because they rely on God to protect their health, and “object[] to participation in the health insurance system, the Act imposes direct and substantial religious and financial burdens upon [them].” Well, no:

Finally, as Defendants point out, Plaintiffs routinely contribute to other forms of insurance,such as Medicare, Social Security, and unemployment taxes, whichpresent the same conflict with their belief that God will provide for their medical and financial needs.

And the ACA places no real burden on religious expression, because the Plaintiffs can opt out by paying the fee, and this is the least restrictive means of lowering healthcare premiums:

[W]hen pressed at oral argument to name a less restrictive means of lowering health insurance premiums or otherwise improving access to health care, Plaintiffs could not do so.

You see, unlike in Republican politics, we don’t operate, in law, under the premise that government doesn’t, shouldn’t, and can’t solve real problems. We actually have to think things through sometimes.

HotAir Doesn’t Really Get Litigation (or, Why “ObamaCare” Remains Valid)

Man, things like this are infuriating. Malkin’s pet website tries to draw an inference of bad faith, or bungling, from the White House’s request to Judge Vinson that he clarify that, during the pendency of appeals, the Affordable Care Act remains valid and enforceable. Legal scholar Ed Morrissey:

Essentially, the Obama administration wants Vinson to tell the states to obey an unconstitutional law.  This isn’t a necessary step for an appeal, although it might or might not be a prerequisite to an application for a stay at the 11th Circuit.  Either way, it’s a fool’s errand.  If a judge declares an entire law void on the basis of constitutionality, he is hardly likely to issue an order telling states to obey it anyway.

True, Vinson thinks the law is “unconstitutional.” But standard practice, as we’ve seen in the Prop 8 litigation, is to stay effect of such a judgment pending appeal. Judge Vinson’s judgment doesn’t take legal effect, and become enforceable, until that point, and because disturbing the status quo while awaiting appeal would throw the entire country into chaos, probably every day given the regularity of constitutional challenges to federal statutes, the Affordable Care Act remains intact.

Lawyers will know this. On one of my cases, we won a trial in, like, 2005 or something. But we can’t use the district court’s judgment to quash foreign proceedings against our client until the First Circuit affirms on appeal (as I think they will). And, last January, BNY Mellon lost an adversary proceeding to Lehman Brothers in the SDNY’s Bankruptcy Court. But they didn’t pay the damn thing until settlement, like, last month.

Can you imagine how it could be otherwise here? Critical thinking, guys.

Justin Bieber Gets Something Right?

Abbreviated, as still recovering from travel, but the argument went well!

Because you surely care, Justin Bieber, apparently, is pro-life (but for weird reasons) and pro-single payer (but for no discernible reason). It’s not really clear why we should care here, specifically, or about celebrity views on politics, generally. But note this: how often do you see someone with a hard left position (on healthcare), alongside a hard right position (on abortion)? Republican messaging is such that these normally go hand-in-hand as, for example, the healthcare war was largely fought on ideological lines (“socialism!”) rather than anything close to the merits.

Why’s Justin Bieber slipped the line? Here, finally, we might draw something interesting from celebrity punditry.

The Cynicism of Constitutional “Conservatives”

Laurence Tribe flags the cynical worldview underpinning the right’s conviction that the health care litigation will be a 5-4 win, or a 5-4 lose:

But the predictions of a partisan 5-4 split rest on a misunderstanding of the court and the Constitution. The constitutionality of the health care law is not one of those novel, one-off issues, like the outcome of the 2000 presidential election, that have at times created the impression of Supreme Court justices as political actors rather than legal analysts. [....]

There is every reason to believe that a strong, nonpartisan majority of justices will do their constitutional duty, set aside how they might have voted had they been members of Congress and treat this constitutional challenge for what it is — a political objection in legal garb.

And notes the error lurking behind the Hudson & Vinson opinions, striking down the mandate:

The justices aren’t likely to be misled by the reasoning that prompted two of the four federal courts that have ruled on this legislation to invalidate it on the theory that Congress is entitled to regulate only economic “activity,” not “inactivity,” like the decisionnot to purchase insurance. This distinction is illusory. Individuals who don’t purchase insurance they can afford have made a choice to take a free ride on the health care system. They know that if they need emergency-room care that they can’t pay for, the public will pick up the tab. This conscious choice carries serious economic consequences for the national health care market, which makes it a proper subject for federal regulation.

This is the position we’ve always maintained (and HotAir/Ann Althouse’s points are inadequate to address the Social Security analogy). The “Obamacare” litigation is not a close case; any defeats rest on a misunderstanding of recent Commerce Clause jurisprudence (Morrison and Lopez are simply inapposite); and the action/inaction distinct is “illusory.” Our word choicer, and Professor Tribe’s. nbd.

Note, too, that many federal laws punish inaction. As one example, absent extensive, expensive, regular, and time-consuming disclosures to the Securities & Exchange Commission, the ’33 and ’34 Acts shut the doors of interstate commerce to any “issuer.” Perhaps that’s different, because Congress may condition access to federal benefits on a fairly low standard. But the distinction is almost rhetorical, as Congress could easily devise an interstate commerce-based “stick” to force citizens into paying buying insurance, or acceding to the individual mandate’s exaction. To be sure, Congress’ powers over interstate commerce are a patchwork, and do not constitute a plenary power. But where an asserted congressional power fills a gap between enumerated powers, or powers already found to be constitutional, the Court never fails to find it a “necessary and proper” exercise. This is no different.

The Immediacy of Constitutional Rhetoric

Reading Judge Vinson’s ruling invalidating the Affordable Care Act, the Washington Post thinks that:

Vinson’s ruling reflects an explicit understanding among conservatives that legal fights are not so much won or lost on matters of legal precedent, but also on the field of public opinion, and that swaying the views of Justice Anthony Kennedy, whose opinion is ultimately the only one that matters, is most effectively done by portraying the mandate as a grave, un-American injustice — a yoke of oppression the American people are dying for the Supreme Court to lift.

The rhetoric of government overreach, the argument goes, is deliberately inflammatory, and designed to appeal to the emotional side of Justice Kennedy’s jurisprudence, such as it is. Maybe there’s something to that — Kennedy’s decisions are often deeply personal, and suffer for the same — but the author misses a point that practitioners will know. Constitutional arguments are always stated in terms of life-or-death threats to the republican order, with concepts, states, and systems anthropomorphized, and deemed to feel things they cannot.

I don’t mean to say that lawyers are all alarmists. Indeed, the hyperbole in which judges and advocates engage has a curious staid quality to it that comes from the matter-of-fact way in which the dangers are presented. We say, in earnest and as a matter of course, that taxpayer standing endangers the separation of powers and therefore the republic; judicial determination of a question “textually committed to the executive branch” would show “disrespect” to the office; states have “interests” in seeing their laws vindicated; failure to read Bankruptcy Code safe harbors broadly “threatens the integrity of the markets,” etc. As a matter of good advocacy, you should always present your case as part of a larger struggle, with context that demands an outcome.

Against this background, Judge Vinson’s slippery slope arguments are separately absurd, sure, but the manner in which they’re stated is anything but. It’s just the way the game is played. And before you say it, yes, different concerns control in the larger marketplace of ideas.

Adams’ Congress Would Have Passed the Affordable Care Act

And Chief Justice Marshall’s Court would have sustained it.

Last week, Forbes “discovered” the Act for the Relief of Sick and Disabled Seamen, 1 Stat 605 (1798) (pdf). Scare quotes because, Eugene Volokh’s blog beat them to it by about eight months, but the comparative circulation being what it is, the Act, which demonstrates originalist support for the notion of “socialized medicine,” has only gained prominence now.

The Act originated what would become the first federally-managed health care system, for marine workers and longshoremen, and funded it by an employer mandate, by which ship captains would find their vessels unable to leave port, unless their employees were documented, and the exaction paid on each. The system also originated a corps of doctors and health administrators under the supervision of the President — which is to say, the Executive Branch — creating America’s first substantial health bureaucracy, and thereby, our very first “death panels.” All together, powerful proof that the Founders intended their new government to be capable of taxing and spending, under the Commerce Clause, for the care of its citizens.

Careful readers will note several points of distinction. First, the care of seamen and longshoremen falls within a narrower definition of Congress’ Commerce Clause powers than, say, health care writ large. But the modern Commerce Clause adequately supports the regulation of the insurance industry, making this, at least, a non-starter. And second, the Act contains no individual mandate, which is, after all, what all the fuss is about. But the presence of an employer mandate, approved by the very men who wrote the Constitution, shows a willingness to deploy the commerce power in a tax-like, socially coercive manner. And for the narrow goal of improving the well-being of the merchant marine, no individual mandate was needed, since a seaman only encounters his profession’s perils through his employer.

There is nothing new in today’s health care debate: neither the problems nor the solutions were beyond the imagination of the founding generation. Removing the perception of novelty that surrounds the individual mandate is half the battle, both with the public and the courts; and this Act is adequate to that challenge.