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Health-care reform wins its first constitutional challenge

I wanted to write a long post on the Michigan judge who, in the first ruling on the subject, declared health-care reform -- and the individual mandate -- comfortably constitutional. Then the day got busy and plenty of other people wrote the post I was going to write. So head over to Andrew Sullivan's place for a round-up of links and commentary.

I'll only add that the arguments being tossed around by the two sides are essentially meaningless. There's no "right" argument here. No one doubts that health-care reform would be constitutional if Antonin Scalia decided to pursue his passion for beekeeping and allowed President Obama to appoint his replacement. The only reason there's any question about the law's constitutionality is that conservatives appointed five of the nine sitting justices, and conservatives have organized against the constitutionality of a proposal they once considered not just constitutional, but desirable as a matter of public policy.

And so it goes. Politics is politics, and the Supreme Court is, at this point, deeply and unquestionably political. I continue to think it unlikely that they will want the sort of direct confrontation with the political system, and with the Democratic Party, that overturning health-care reform would entail. But only time will tell.

By Ezra Klein  | October 8, 2010; 3:37 PM ET
 
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Comments

Everyone is describing the MI judge as the first to rule on this which may be technically true, but the judge in FL who is hearing the big case against the mandate brought by 23 states has contradicted him. The FL judge said during the case that he couldn't find any example in our history of a mandate akin to this, and explicitly rejected the applicability of the Commerce Clause (which it appears the MI disagrees with.) He then wrote a letter indicating he will allow the challenge of Constitutionality to continue in certain areas, but he has not made this ruling formal yet, which is I guess why people are focusing on MI.

Anyway, as Ezra says, the final question comes down to an increasingly-political SCOTUS. And as Toobin said on Charlie Rose the other night, the possibility of them overturning the mandate is very real, he said it's one of the big 2 questions before them. And as some liberals like me say, overturning the mandate would be a great thing. Even Obama in his heart of hearts knows the mandate is a bad idea: http://www.youtube.com/watch?v=EoSnqofelsQ&feature=related

Posted by: michaelh81 | October 8, 2010 3:55 PM | Report abuse

I know this is a nitpicky lawyer-y thing to do, but I'm really not comfortable with phrasing this as healthcare reform "being" constitutional if the court is liberal and not "being" constitutional if the court is conservative. Issues before the court are deemed constitutional or held to be constitutional. This is actually reinforcing Ezra's point; that laws aren't inherently constitutional or unconstitutional. It all depends on the ajudicator and the way in which the case is presented, and the holding can change over time.

Posted by: MosBen | October 8, 2010 4:04 PM | Report abuse

So far, one federal district has determined that Plaintiffs have no right to sue regarding the PPACA while in three others Plaintiffs have been found to indeed hold such a right. In one of the districts in which Plaintiffs have been found to have the right to sue, the Plaintiffs failed to prevail on two (of seven) claims against the PPACA.

Such patchwork is likely to continue, with different jurisdictions reaching different conclusions. What happens if (after intermediate appeal) the Supreme Court refuses to take any of the cases? The Court cannot be forced to hear an appeal, so one potential outcome is a quilt -- with the PPACA having different status in each jurisdiction. While certainly not the national-socialist solution embodied by the Obama/Pelosi PPACA, such a quilt might actually be the ideal solution: a consensus might emerge if the issue isn't forced.

Justice Breyer's latest book has a perspective on what the Court's role ought to be. In his book, Breyer stresses the facts that (a) the Court has no army to enforce its rulings and (b) a ruling of the Court technically applies only to the parties of the case actually heard by the Court and to no others. Dred Scott is a key example.

Moreover, (as someone notes above) the controversial mandate might not be such a good thing: while it has academic appeal, it also has some practical limitations and some frightening implications.

Posted by: rmgregory | October 8, 2010 4:12 PM | Report abuse

You're very sophisticated about some subjects - health care and Senate procedural rules, for example. I often disagree with your conclusions, but you're often thought provoking.

Your legal analyses, on the other hand, are juvenile. You obviously know almost nothing about the law. Until you make the investment to fill that gap, you should stay away from the subject.

Posted by: ostap666 | October 8, 2010 4:33 PM | Report abuse

@ostap666: in a world in which the legal analyses of the SCOTUS majorities themselves are often juvenile and reflect little knowledge of the law (see Citizens United), I think Ezra's level of analysis is just fine.

Posted by: michaelh81 | October 8, 2010 4:39 PM | Report abuse

michaelh81, Obama's previous statements about the mandate are an indication of his lack of understanding of its necessity at the time (not an actual legitimate policy critique against it).

You may be against the mandate, but you should be aware that the government has conceded that the rest of the bill must be struck down if the mandate is struck down (since obviously the rest of the bill can't work without the mandate). So if the mandate goes, so goes the pre-existing condition regulations (in a well defined legal sense).

Posted by: JonShields1 | October 8, 2010 4:48 PM | Report abuse

Of course, you may very well want the whole bill struck down (as some "liberals" openly advocate for). In that case, striking down the mandate will get exactly what you want (though if I were you, I wouldn't bet on it happening).

I'm just saying that if you think that the mandate is somehow not required to have community rating without skyrocketing premiums, you are deeply mistaken, and are in for a rude awakening should the mandate be struck down (as the rest of the bill will be thrown out with it).

Posted by: JonShields1 | October 8, 2010 4:52 PM | Report abuse

ostap666, just because you are uncomfortable with the idea that the Supreme Court is deeply and unquestioningly political doesn't make it untrue.

Posted by: JonShields1 | October 8, 2010 4:56 PM | Report abuse

@JonShields1: Obama didn't lack understanding when he repeatedly discussed his real feelings on the mandate...what he lacked was the need to cowtow to a bunch of ConservaDems pushing horrible policies on the American people.

Can you please show me where you're getting the notion that striking down the mandate would strike down the whole law?

Gov. Dean said recently that he fully expects the SCOTUS to rule the mandate unconstitutional, and that this will not have much effect on the overall bill:
http://www.huffingtonpost.com/2010/08/06/dean-individual-mandate-w_n_673218.html

I think you're wrong that the lack of a mandate would cause premiums to rise. Seems to me less demand would force them to lower the premiums. You could just as easily say the mandate will skyrocket premiums because it will force-feed consumers to monopolies that don't have to be accountable.

The whole bottom line of the ACA is that the only real price controls will be the State Commissioners, who are an extremely varied mixed bag - hence the overall bill is a variable mixed bag. The only reliable way to control prices would have been a public option - you know, competition, market-based solutions, all those things conservatives claim to believe in.

Posted by: michaelh81 | October 8, 2010 5:14 PM | Report abuse

Gov Dean does not know what he is talking about with respect to this issue. The government has already conceded that the pre-existing condition regulations MUST fall if the mandate falls. In the government's opposition to Virginia's motion for summary judgement:

"Absent a minimum coverage provision, the guaranteed-issue and community-rating reforms in Section 1201 would cause many to drop coverage, leading to a spiral of increased premiums and a shrinking risk pool – the insurance market will “implode.” Because Congress would not have intended this result, these reforms cannot be severed from the minimum coverage provision."

Furthermore, Dean doesn't even know what he's talking about as a policy matter. As thinkprogress notes,

"An amicus brief that I co-wrote on behalf of seventeen disease and health organizations goes into more detail. It explains that seven states attempted to ban preexisting conditions discrimination without also requiring everyone to carry a minimum level of coverage, and all of them saw their premiums skyrocket. According to a scholarly study of Vermont’s health plan, Vermont’s premiums shot up after it enacted a ban on preexisting conditions discrimination but no mandate in 1993. Between 1994 and 1996, most of the country only experienced single-digit increases in its insurance costs. In Vermont, however, average premiums increased by 16 percent during this same two year period.

In Massachusetts, the one state to enact a minimum coverage provision along with its ban on discrimination, the numbers are very different. There, individual premiums fell a massive 40 percent in the years after Massachusetts’ minimum coverage law went into effect, while the rest of the nation experienced a 14 percent increase."

http://thinkprogress.org/2010/08/06/dean-minimum-coverage/

In the end, this is not an issue. The people that admit the mandate is necessary for community rating are obviously right, and the people who deny it simply do not understand economics. It is not really debatable -- no serious economist would argue one could work without the other, and no side in any case is arguing otherwise.

Posted by: JonShields1 | October 8, 2010 5:36 PM | Report abuse

Those numbers seem wildly off.

Vermont's reforms without a mandate caused costs to "shoot up" 16 percent? Big deal! Read a newspaper lately? 16 percent is now normal for annual increases. If this is his standard, I wonder about those other 7 states he mentioned.

Regardless of those 2 years, Dean was the longest-serving Gov in VT history, and he knows how the plan worked. He says its fine, you don't need a mandate, and costs don't go up. They have community ratings in VT, premiums are not primarily based on "market forces". So you either figure out a way to give people fair prices w/ pre-existing conditions, or you go out of business. Plenty of companies figured out how to do the former.

And MA costs dropped 40 percent?! That's the proof-positive that this is a line of bull. I'm quite sure I've heard it repeated ad nauseam that the MA plan did nothing to control cost, in fact if anything they must have meant costs went UP 40 percent. I've also heard plenty of stories of families squeezed into horrible situations in which they can't afford the mandate. Same thing that would happen if the mandate was enacted nationally.

But that won't happen, because the mandate is possibly the single worst hair-brained scheme ever foisted on the American public, and it will either be removed by the SCOTUS or Obama, who wants to get re-elected, in a clever return to his real principles about the mandate.

Posted by: michaelh81 | October 8, 2010 5:58 PM | Report abuse

16 percent in 1994 was DOUBLE the respective increases in the other states at the time. You can't compare one state in 1994 to other states NOW.

Your argument about Massachusetts is absolutely hillarious. You see data that doesn't conform to your false narrative, and then you claim the data is false, solely because... wait for it... wait for it...

because it doesn't conform to your false narrative.

Rather than admit your narrative is false, you say that objective data is false for not fitting your false narrative.

Arguments like these are really indicative of all "liberal" arguments against the mandate. They are like creationists' arguments against evolution. Yes, we have free speech, they are allowed to say whatever they want, but that doesn't mean they are taken seriously by any remotely serious healthcare economist.

"But that won't happen, because the mandate is possibly the single worst hair-brained scheme ever foisted on the American public, and it will either be removed by the SCOTUS or Obama, who wants to get re-elected, in a clever return to his real principles about the mandate."

As seems par for the course in this thread, reality is basically whatever you say flipped to the exact opposite. Far from being hair-brained, it is essential to any plan to expand access (which is why every country that has universal healthcare has one, even non-single payer countries).

If it is removed by the SCOTUS, the pre-existing conditions automatically will fall as well.

And it won't be removed by Obama voluntarily. I would take a 100 to 1 bet on that.

Posted by: JonShields1 | October 8, 2010 6:14 PM | Report abuse

You've yet to provide a shred of evidence that the numbers you cited aren't actual bull. Look, here's how it's done:

http://www.cato.org/pub_display.php?pub_id=10488

If you go there (not that I'm a Cato fan, but at least they've crunched the numbers) you see my suspicion was exactly right. Costs went UP 40%, not down 40%.

Now please retract everything you said that was based on the hilariously erroneous numbers from the usually-better Think Progress.

Lastly, you are wrong that any other country has tried a mandate like ours. Either they have a single-payer or even nationalized system in which health care is universal and not a consumer privilege, which is obviously the best solution. Or like Germany they have a very tightly regulated market that makes Health Insurance like a utility, in which case a mandate is perfectly acceptable. NO country would even think about doing something like we are, which is to mandate you buy a minimally-regulated product from private companies that are frequently monopolies. Worst. Idea. Ever.

Posted by: michaelh81 | October 8, 2010 6:30 PM | Report abuse

You are a joke. You cite a Cato chart that measures "costs" from 2003 to 2008 (without saying what its values actually are). Of course 2003 was THREE YEARS BEFORE the health plan was implemented. Thinkprogress' source was an economist's paper, that actually said

"The average individual premium in the state fell from $8,537 at the end of 2006 to $5,143 in mid-2009, a 40 percent reduction, while the rest of the nation was seeing a 14 percent increase."

I'm waiting for your retraction.

Posted by: JonShields1 | October 8, 2010 6:43 PM | Report abuse

Sorry, joke's on you. Gruber was a paid collaborator to the administration, hardly unbiased. Here's what he's ignoring (surely intentionally):

"Had state officials not done their level best to hide those costs — the individual mandate pushed 60 percent of the cost off-budget, while expanding eligibility for Medicaid pushed another 20 percent onto the federal budget — no one would be hailing Massachusetts as a model."

All the ACA does is shift costs around and take something that's too expensive for individuals and make it something that's too expensive for individuals to pay for through taxes in order to fund subsidies. It doesn't actually lower any costs or make anything affordable. If that's your idea of progressive success, I fear the coming years when these fake progressive policies make advocating real progressive policies that much harder.

That's the real problem with the ACA. I wouldn't mind if it was a starter home, per Harkin's analogy. Fact of the matter is it's a facade purchased with a subprime loan based on a teaser rate that is about to explode in America's face.

Posted by: michaelh81 | October 8, 2010 6:56 PM | Report abuse

You are trying to refute a statement about premiums by posting a completely irrelevant quote about the MA state budget? Really?

Back to the original question, do you finally admit that premiums did, in fact, go down 40% on the individual market in MA?

Posted by: JonShields1 | October 8, 2010 7:14 PM | Report abuse

"You are a joke. You cite a Cato chart that measures "costs" from 2003 to 2008 (without saying what its values actually are). Of course 2003 was THREE YEARS BEFORE the health plan was implemented. Thinkprogress' source was an economist's paper, that actually said

"The average individual premium in the state fell from $8,537 at the end of 2006 to $5,143 in mid-2009, a 40 percent reduction, while the rest of the nation was seeing a 14 percent increase."

I'm waiting for your retraction."

An economist? Just any ol' economist? Ah, Jonathan Gruber.

http://www.huffingtonpost.com/jane-hamsher/how-the-white-house-used_b_421549.html

This guy has "conflict of interest" written all over him.

Let's take a look at an important part of this 40% decrease:

"notably the introduction of large subsidies for low income populations"

So if someone else is covering most of your premiums, sure, they can go down quite a bit! That's how you get the average down. Steal from person A, give to person B in the form of lower premiums, and volia, lower average premiums!

As an aside, Gruber has some sort of model which shows health care premiums rising slightly less for even those without subsidies, but then again the Fed had a model which showed how a 20% decline in home prices would only have minor effects on the economy. And how about that sub 8% unemployment rate yet another model thought ARRA would accomplish?

The Massachusetts Health Care Cost Trends Report (http://en.wikipedia.org/wiki/Massachusetts_health_care_reform#cite_note-MA_HC_cost_trends_III-38 - see endnote #39) shows that private per capita health care spending increased 7.5% annually from 2006-2008. This compares with national income growth of 2.7% annually per person during the same period (no inflation adjustment).

Posted by: justin84 | October 8, 2010 7:18 PM | Report abuse

I never said anything about per capita health spending. You are the one that keeps bringing that up. All I ever said (actually quoted) was about premiums. I'm glad to see you finally admit the truth.

Your analogy of funding for subsidies to theft is ludicrous. The tax deductibility of employer sponsored plans is a gigantic subsidy and has been for decades. The excise tax simply redirects a small part of that gigantic subsidy to people who don't have employer sponsored health plans.

Posted by: JonShields1 | October 8, 2010 7:27 PM | Report abuse

@justin84: thanks for finding the key numbers: 7.5% vs. 2.7%

so it's possible we are going to take our currently unsustainable rate of increasing health care costs, and TRIPLE them! Rube Goldberg would have been proud!

And then tripling costs to eliminate just the most egregious private monopoly practices will become known as the "progressive solution"...good grief!

Posted by: michaelh81 | October 8, 2010 7:50 PM | Report abuse

Of course, you conveniently "forget" to mention that MA costs per capita were the highest in the nation BEFORE the bill, so of course your comparison is invalid (with respect to analyzing the bill's effects).

Posted by: JonShields1 | October 8, 2010 7:57 PM | Report abuse

And on top of that,

Posted by: JonShields1 | October 8, 2010 8:12 PM | Report abuse

And on top of that, 7.5 is health costs while 2.7 is income. You are trying to use that to show that our rate of increase for health costs will triple???

Posted by: JonShields1 | October 8, 2010 8:15 PM | Report abuse

While it was orignally affordable health care we wanted, the insurance companies were allowed to define the process. Cut out the insurance companies and guess what, the price of medications ect., will adjust to what people can afford.We do not want to pay health insurance companies to handle our care AND the price of our care, if they are the ones who are driving the prices. That is extortion.

Posted by: funlol | October 8, 2010 8:40 PM | Report abuse

"I never said anything about per capita health spending. You are the one that keeps bringing that up. All I ever said (actually quoted) was about premiums. I'm glad to see you finally admit the truth."

Jon,

I admitted that if you take from one person and use it to reduce another person's premium, you can show lower average premiums.

You can also lower the monthly payments on a Cadillac CTS to $99/mo if the government puts a $32,000 down payment on it for you. Of course, total dollars spent on CTS automobiles would go up as GM produces more of them at a higher price. The same is true with health care. The total dollars spent on all things health rose quite rapidly in MA after their reform, and those costs must be paid for.

"Your analogy of funding for subsidies to theft is ludicrous. The tax deductibility of employer sponsored plans is a gigantic subsidy and has been for decades. The excise tax simply redirects a small part of that gigantic subsidy to people who don't have employer sponsored health plans."

A thief who leaves you with $5 after taking your wallet isn't subsidizing you. Either way, the government is taking money from a set of people whether they like it or not, and giving it to another set of people.

Anyway, it doesn't make a difference how you view the matter. Even if taxation isn't theft, all you are doing here is using transfers to paper over rising costs. Either way, total spending on health care rises, whether or not one particular person's premium goes down.

By the way, in all probability the beneficiaries of the tax exemption 'subsidy' are largely subsidizing themselves via higher marginal tax rates. I'd imagine 95-99% of income taxes are paid by people who also have employer sponsored health insurance.

"Of course, you conveniently "forget" to mention that MA costs per capita were the highest in the nation BEFORE the bill, so of course your comparison is invalid (with respect to analyzing the bill's effects)."

Um, how exactly does that help your case? MA had the highest costs in the nation prior to reform, and after reform they continued rising at a far more rapid pace than income.

Posted by: justin84 | October 11, 2010 9:23 AM | Report abuse

Ezra Klein, journolist, has just provided the reasoning behind why liberals are so adamant that loberally activist judges be appointed.

Posted by: gfafblifr | October 11, 2010 1:12 PM | Report abuse

In respect to Employer mandates, it appears from www.BenefitsManager.net and www.AHealthInsuranceQuote.com analysis that employers nationwide will be assessed a $2,000 penalty for every employee not offered group health insurance or commonly referred to employer sponsored health insurance. Does this include part time employees that traditionally didn’t qualify or buy health insurance in the first place because of the cost vrs. Hours worked? How in the world is an employer going to absorb this cost? So if an employee doesn’t want to participate in paying their share, the employer is penalized $2,000?

Posted by: mikeoliphant | October 11, 2010 1:38 PM | Report abuse

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