Tuesday, December 14, 2010

Conservative (And Biased) Judge Deems Individual Mandate Unconstitutional

Yesterday brought headlines that a conservative judge (and part-owner of a Republican campaign-consulting firm that fought the health-care legislation) in Virginia, U.S. District Judge Henry E. Hudson, had determined the individual mandate of the health care reform bill was unconstitutional.  This of course was a good thing for opponents of the law, who want the entire thing gone.  In their eyes, the other rulings on the law were done by liberal activist judges.  After reviewing some of the ruling, it is my understanding that the ruling was not as big as proponents of repeal make it sound.

The Washington Post had a story pointing out that the judge only struck down the individual mandate and reference to that particular section, but when searching the health care law, one can only find reference to the section twice in the bill - in the table of contents and the section itself.
The danger was that, in striking down the individual mandate, the court would also strike down the rest of the bill. That's exactly what the plaintiff had asked Hudson to do. But the judge pointedly refused, noting: "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.

Another interpretation says that Section 1501 relies on Section 5000A of the Internal Revenue Code, which contains the mandate's enforcement mechanism, and so that was the part Judge Hudson meant to identify. But 5000A isn't mentioned in the insurance regulations, which are the only pieces of the bill that plausibly rely on the mandate for their effectiveness. So pretty much any other part of the bill you can think of fails either the "directly dependent" or the "specific reference" test.
The Washington Post article also went into a brief history of the individual mandate, which I thought was interesting:
Hudson will not have the last word on this. Anthony Kennedy will. The disagreements between the various courts virtually ensure that the Supreme Court will eventually take up the case. But right now, the range of opinions stretch from "the law is fine" to "the individual mandate is not fine, but the rest of the law is." That could create problems for the legislation if the mandate is repealed and Republicans block any attempts at a fix, but it's a far cry from a world in which the Supreme Court strikes down the whole of the health-care law.

It might, however, be a worse world for Republicans. The individual mandate began life as a Republican idea. Its earliest appearances in legislation were in the Republican alternatives to the Clinton health-care bill, where it was co-sponsored by such GOP stalwarts as Bob Dole, Orrin G. Hatch and Charles E. Grassley. Later on, it was the centerpiece of then-Gov. Mitt Romney's health-reform plan in Massachusetts, and then it was included in the Wyden-Bennett bill, which many Republicans signed on to.

It was only when the individual mandate appeared in President Obama's legislation that it became so polarizing on the right. The political logic was clear enough: The individual mandate was the most unpopular piece of the bill (you might remember that Obama's 2008 campaign plan omitted it, and he frequently attacked Hillary Clinton for endorsing it in her proposal). But as a policy choice, it might prove disastrous.

The individual mandate was created by conservatives who realized that it was the only way to get universal coverage into the private market. Otherwise, insurers turn away the sick, public anger rises, and, eventually, you get some kind of government-run, single-payer system, much as they did in Europe, and much as we have with Medicare.

If Republicans succeed in taking it off the table, they may sign the death warrant for private insurers in America: Eventually, rising cost pressures will force more aggressive reforms than even Obama has proposed, and if conservative judges have made the private market unfixable by removing the most effective way to deal with adverse selection problems, the only alternative will be the very constitutional, but decidedly non-conservative, single-payer path.
It seems that Republicans may get an unexpected result from their political games.  I don't think the law would be struck down but I do see this as being used as a political toy for the next few years.  I agree with the judge from the recent ruling over the Liberty University case, in which the religious school from Lynchburg, Virginia, lost its constitutional case by claiming the law violated the school's First Amendment right by forcing the school to fund abortions - a claim the plaintiffs failed to prove.

Emily Williams wrote the following for The Lynchburg Times:
Another big topic in the case is abortion. In the suit, Liberty argued that the bill is a violation of its First Amendment right as it requires the school to fund abortion. In his ruling, Judge Moon wrote that the bill has special provisions to ensure that every state has a health exchange option that does not cover abortion services, and that no plan is required to provide abortion coverage.

[Dean Mathew] Staver argued that this guarantee is not sufficient as the senate’s version of the bill did not include a clause prohibiting federal funds to go towards abortion. As for being able to choose a state plan that does not cover abortion, Staver voiced his skepticism.

“While there may be one of the exchanges has an option that does not fund abortion the others will fund abortion. At the end of the day those [healthcare exchanges that fund abortion] will probably be the only ones you have an option to choose,” said Staver.

Some of the money Staver worried would go to fund abortion, are the fees, fines and taxes imposed by the mandate. Staver said employees of the university have “good” health care coverage. Under the bill, explained
Staver, if one employee were to find that a service was not covered and seek outside insurance, Liberty would face fines that could reach over a million dollars.

Judge Moon ruled that the University was unable to prove that this money would be used to fund abortions, and thus was not unconstitutional.
That particular portion of the case highlighted the irrational thinking of the right - as long as the government has money and as long as the health care bill is on the books, abortions, in their mind, are being funded by the bill.  They don't need evidence, because being a religious school, they have faith.

I also thought Judge Moon's comments regarding the impact the law has on the marketplace was interesting, being that it seemed to be the opposite of what Hudson argued.
In the ruling, Judge Moon points out that nearly every person will make use of some sort of health service in his or her lifetime. He then argued if a person opts out of purchasing health insurance, they are simply choosing a different payment method for health services, be it out of pocket or by use of free or low-cost emergency room services.

These payment choices then affect the healthcare market and drive price of insurance.

“Because of the nature of supply and demand, Plaintiffs’ choices directly affect the price of insurance in the market, which Congress set out in the Act to control,” wrote Moon.

The fact that opting out of insurance has so much power over the market, argued Moon, means the federal government has a right to regulate how people pay for healthcare.
Liberty University didn't like this, of course, and argued that by the judge's logic, the government could force individuals to purchase a General Motors car to improve the General Motors market, but as we saw with the abortion logic  Staver used, Staver is mistaken.  The automotive industry is very different from the health care industry - an individual's decision to purchase a car would not impact the cost of a car for someone else because there are other manufacturers out there offering similar products.  The GM analogy would only work if GM was the only one out there.

While this recent ruling is a bit of a disappointment, I am not to concerned with it because it seems every conservative argument is based on flawed and highly partisan logic.


  1. Here is a perfect example of the problems this ruling faces. I think that everyone will agree that Congress, pursuant to the Commerce Clause an require commercial vehicles traveling across state lines to have insurance. Now the million dollar question. Can Congress, pursuant to the Commerce Clause require a citizen of one state traveling across state lines to another state to have health insurance. If you answer no, assume that the non-citizen becomes sick or injured in the foreign state and does not have insurance. Who pays. The citizens and entities of the foreign state. This is the reason the Affordable Health Care Act will be upheld. I know persons can opt out and as a result, not have insurance. However, there is a long line of cases that a Congressional solution does not have to solve every problem and in the example I gave, it certainly would be a significant problem.

  2. You make a very interesting point that I did not think of regarding interstate commerce and health care - if an individual crosses state lines to receive health care...

    I just don't understand why people can't wait and see how the law works and then consider modification...


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