Give The Public What They Want, More Blog Posts On Mandates

Sheryl Gay Stolberg and Kevin Sack at NYT:

Seeking to appease disgruntled governors, President Obama announced Monday that he supported amending the 2010 health care law to allow states to opt out of its most burdensome requirements three years earlier than currently permitted.

In remarks to the National Governors Association, Mr. Obama said he backed legislation that would enable states to request federal permission to withdraw from the law’s mandates in 2014 rather than in 2017 as long as they could prove that they could find other ways to cover as many people as the original law would and at the same cost. The earlier date is when many of the act’s central provisions take effect, including requirements that most individuals obtain health insurance and that employers of a certain size offer coverage to workers or pay a penalty.

“I think that’s a reasonable proposal; I support it,” Mr. Obama told the governors, who were gathered in the State Dining Room of the White House.

“It will give you flexibility more quickly while still guaranteeing the American people reform.”

Kate Pickert at Swampland at Time:

As I wrote in November, there’s no guarantee Republicans governors will embrace this 2014 opt-out waiver plan, which would have to pass through Congress to become law:

Aside from the political implications of endorsing a plan championed by a Democratic leader on health reform – even if he is in cahoots with a Republican from a blue state – some on the right might balk at the Wyden-Brown plan on the grounds that it’s still an expensive expansion of government. The Wyden-Brown plan, after all, does not – as far as I can tell – spend any less money than the ACA without a state opt-out. On the contrary, it may cost more.

The Wyden-Brown plan also does not impact the huge Medicaid expansion called for in the ACA, which Republicans vehemently oppose. It doesn’t eliminate taxes on expensive health insurance plans, or fees levied on medical devices or pharmaceuticals.

Another catch: The Wyden-Brown plan only allows states to opt out if they have a good plan for how to undertake comprehensive health care reform on their own. Most states don’t have such a plan. Massachusetts, which enacted reform in 2007, obviously does, which is why Brown was a logical co-sponsor of the opt-out bill. California, Connecticut and Vermont are three other states that are on their way toward developing health care reform inside their borders. But red states – especially southern states – are among those least equipped to design and implement reform that could accomplish what the ACA attempts to do, as they typically have higher percentages of uninsured residents and looser insurance regulation.

Conn Carroll at Heritage:

As long as the HHS Secretary, whether it is Kathleen Sebelius or the next occupant of the office, has the final say on granting Obamacare waivers, then there is no real flexibility for states under Obamacare. All 50 of them would still be at the mercy of the whim of the HHS. The only real way to give states true flexibility on health care reform begins with the full repeal of Obamacare.

UPDATE: Politico confirms that Wyden-Brown has nothing to do with offering Obamacare critical states “flexibility” and everything to do with advancing single payer health care:

[A] White House conference call with liberal allies this morning says the Administration is presenting it to Democrats as an opportunity to offer more expansive health care plans than the one Congress passed.

Health care advisers Nancy-Ann DeParle and Stephanie Cutter stressed on the off-record call that the rule change would allow states to implement single-payer health care plans — as Vermont seeks to — and true government-run plans, like Connecticut’s Sustinet.

The source on the call summarizes the officials’ point — which is not one the Administration has sought to make publically — as casting the new “flexibility” language as an opportunity to try more progressive, not less expansive, approaches on the state level.

“They are trying to split the baby here: on one hand tell supporters this is good for their pet issues, versus a message for the general public that the POTUS is responding to what he is hearing and that he is being sensible,” the source emails.

Ezra Klein:

The question is whether this makes Wyden-Brown more or less likely to pass. I’m guessing less likely. The political theory behind Wyden-Brown was that it gave Republicans a constructive way to attack the Affordable Care Act: The waiver program could be sold as a critique of the law — “it’s such a bad bill that states need to write their own policy” — even as it entrenched the country’s basic commitment to universal health-care insurance. You could’ve imagined it being attached to the budget or one of the spending bills as part of a larger bargain.

But now that Obama has admitted it’s not a threat to the Affordable Care Act, a lot of the appeal for Republicans dissipates. Supporting it could even be seen as helping the White House in its efforts to defend the law against repeal. So the idea looks likelier to become a talking point for the administration — see how reasonable we’re being? — than an outlet for Republicans. But perhaps that doesn’t matter: Wyden-Brown hasn’t attracted any Republican co-sponsors beyond Scott Brown, so maybe it never had a chance of playing its intended part anyway.

Kevin Drum:

I suspect this is not as big a deal as it seems. Basically, Obama is calling the bluff of Republicans who insist that they can build a healthcare system that’s as extensive and affordable as PPACA using some combination of tea party-approved “free market” principles. He’s telling them to put their money (or, rather, money from the feds) where their mouths are, which will probably demonstrate fairly conclusively that they can’t do it. It’s possible that a state like Oregon might enact a more liberal plan that meets PPACA standards, but I doubt that Alabama or Tennessee can do it just with HSAs and high-deductible health plans.

Still, we’ll see. This is a chance for conservatives to show that they have a better healthcare answer in the real world, not just as talking points at a tea party rally. Obama is betting they’ll fail, and he’s also betting they’ll tear each other apart arguing over details while they do it. Life is easy when all you have to do is yell “Repeal Obamacare!” but it gets a lot harder when you have to produce an actual plan.

Virginia Is Not For Lovers Of A Mandate

Kevin Sack at NYT:

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.

The judge wrote that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.

Daniel Foster at The Corner:

Suit was brought by Virginia attorney general Ken Cuccinelli.

“I am gratified we prevailed. This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution,” said Cuccinelli in a statement.

Cuccinelli has made the extraordinary request that the case bypass the regular appellate order and proceed directly to the highest court, arguing that the Obama administration, too, would benefit from a speedy resolution.

Josh Marshall at Talking Points Memo:

A year ago, no one took seriously the idea that a federal health care mandate was unconstitutional. And the idea that buying health care coverage does not amount to “economic activity” seems preposterous on its face. But the decision that just came down from the federal judgment in Virginia — that the federal health care mandate is unconstitutional — is an example that decades of Republicans packing the federal judiciary with activist judges has finally paid off.

Tom Maguire

Jonathan Cohn at TNR:

Hudson’s ruling is not unexpected. He is a Republican appointee with a history of conservative rulings. Nor is it definitive. Two other federal district judges, Democratic appointees both, have already ruled that the entire law passes constitutional muster. A fourth decision, by a judge in Florida, is expected by year’s end.

Most legal experts expect that, eventually, the case will come before the U.S. Supreme Court. Hudson himself acknowledged as much, writing “The final word will undoubtedly reside with a higher court.”

And how might the five Republican appointees and four Democratic appointees on the Surpeme Court rule? Most court observers I know believe that at least one of the Republican appointees, most likely Anthony Kennedy, would agree with the government that the Affordable Care Act falls well within traditional boundaries of the taxing and interstate commerce powers. (For an example of such logic, see the Michigan ruling from a few weeks ago.)

I tend to think those experts are right, for reasons I’ll get around to explaining one of these days. Then again, I recall hearing similar confidence about another highly anticipated court ruling–one about, oh, ten years ago.

For more on the mandate and some varied opinions on how an adverse ruling by the Supreme Court might affect the Affordable Care Act overall, see Aaron Caroll, Jonathan Gruber, Ezra Klein, and Igor Volsky.

Meantime, if you’re looking for a more generic primer on the individual mandate, I highly recommend this video from the Kaiser Family Foundation.

Orin Kerr:

I’ve had a chance to read Judge Hudson’s opinion, and it seems to me it has a fairly obvious and quite significant error. Judge Hudson assumes that the power granted to Congress by the Necessary and Proper Clause — “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers” — does not expand Congress’s power beyond the Commerce Clause itself. The key line is on page 18:

If a person’s decision not to purchase health insurance at a particular point in time does not constitute the type of economic activity subject to regulation under the Commerce Clause, then logically an attempt to enforce such provision under the Necessary and Proper Clause is equally offensive to the Constitution.

Judge Hudson does not cite any authority for this conclusion: He seems to believe it is required by logic. But it is incorrect. The point of the Necessary and Proper clause is that it grants Congress the power to use means outside the enumerated list of of Article I powers to achieve the ends listed in Article I. If you say, as a matter of “logic” or otherwise, that the Necessary and Proper Clause only permits Congress to regulate using means that are themselves covered by the Commerce Clause, then the Necessary and Proper Clause is rendered a nullity. But that’s not how the Supreme Court has interpreted the Clause, from Chief Justice Marshall onwards. Indeed, as far as I know, not even the most vociferous critics of the mandate have suggested that the Necessary and Proper Clause can be read this way.

Ezra Klein:

he real danger to health-care reform is not that the individual mandate will be struck down by the courts. That’d be a problem, but there are a variety of ways to restructure the individual mandate such that it doesn’t penalize anyone for deciding not to do something (which is the core of the conservative’s legal argument against the provision). Here’s one suggestion from Paul Starr, for instance. The danger is that, in striking down the individual mandate, the court would also strike down the rest of the bill. In fact, that’s exactly what the plaintiff has asked Hudson to do.

Hudson pointedly refused. “The Court will sever only Section 1501 [the individual mandate] and directly-dependent provisions which make specific reference to 1501.” That last clause has made a lot of pro-reform legal analysts very happy. Go to the text of the health-care law and run a search for “1501.” It appears exactly twice in the bill: In the table of contents, and in the title of the section. There do not appear to be other sections that make “specific reference” to the provision, even if you could argue that they are “directly dependent” on the provision. The attachment of the “specific reference” language appears to sharply limit the scope of the court’s action.

Doug Mataconis:

In this particular case, the next step on the appellate ladder would be the Court of Appeals for the Fourth Circuit, which has generally had a reputation of being among the more conservative Courts of Appeal.  However, Virginia’s Attorney General has reportedly been mulling the idea of  applying to the Supreme Court to leave to bypass the  Court of Appeals and proceed directly to the final state of the appellate process. Even if such an application were made, there’s no guarantee it would be granted so the the case may end up in the 4th Circuit anyway, but this strikes me as mistake. It seems to me that a final hearing before the Supreme Court might have a better shot, for Virginia, if it had other rulings against the law from other Courts behind it.

In any event, it’s clear that the Federal Government was unable to overcome much of the initial skepticism that Judge Hudson expressed about the arguments in favor of the mandate in his ruling on the government’s Motion to Dismiss. On the Commerce Clause, Hudson ruled that the requirement that American citizens purchase health insurance or face a penalty to exceed even the relatively liberal bounds of Congressional authority as set forth in case likes Wickard v. Filburn and Gonzalez v. Raich and that failure to act cannot itself be considered an act occurring within interstate commerce. On the government’s backup argument that the mandate and it’s penalty are justified under Congress’s far broader authority to tax for the “general welfare,” Hudson essentially ruled that the taxing power cannot be used to accomplish a purpose not authorized under the specific grants of power given to Congress under Article I, Section 8, and that the Attorney General’s argument is undercut by the fact that both Congress and the President specifically denied during the build up to passage of the Affordable Care Act that the mandate was a tax (a relevant fact because it goes to the question of Congressional intent).

Finally, rather than declaring the entire ACA unconstitutional, Hudson’s decision merely enjoins enforcement of the individual mandate. However, given the fact that mandate is the centerpiece of the entire regulatory scheme, it is hard to see how the rest of the law could survive without it.

This case is obviously going to be appealed, but it’s nonetheless a victory for Virginia, and it’s noteworthy as one of the few times in recent memory that a Court has said to Congress — no, you can’t do that. For that reason alone, it’s a good thing.