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Tag: Commerce Clause

The Supremes Rule: Why You Have to Love Lawyers and Politicians

Like the hero in an old-time movie, Chief Justice John Roberts metaphorically untied Obamacare from the railroad tracks and, with four of his colleagues, pulled it away from the onrushing destructive force of his right-wing colleagues in the nick of time.  In doing so he also saved President Obama from political disaster.

Alas, just like in the movies, the villains will soon be back.

While the next five months will determine whether the Court ruling upholding health reform was a victory or just a reprieve, the president has been plucked from the perils of a politically ruinous headline: “Signature achievement of constitutional lawyer president declared unconstitutional.”

In doing so, the Court showed why Americans hate the other guy’s lawyer and love theirs. Roberts embraced his inner reactionary by ruling that the individual mandate did not meet the requirements of the Commerce Clause — even though virtually all respected conservative jurists believe it does, and the conservative Heritage Foundation clearly believed it did when proposing the idea under a Republican president.

However, the Court avoided what would look like a political decision overturning the entire law by ruling that the penalty for not buying health insurance was a constitutionally permitted tax. Which made the law constitutional. Game. Set. Match. (Well, unless you were a poor person counting on an expansion of Medicaid. But if you’re poor, you should be used to losing.)

Don’t you love clever lawyers? At least when they’re on your side?

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Health Care and Constitutional Chaos

The Supreme Court’s decision on the constitutionality of the Affordable Care Act (ACA) will likely be handed down on the last day of this year’s term. If the Court finds that the ACA—either in whole or in part—violates the Constitution, the health care industry will be shaken to its core. And, no matter what legal justification the Court uses to invalidate the ACA, the structure of constitutional law will be severely undercut. The resulting medical and legal chaos will be expensive, divisive, and completely unnecessary. Nothing in the text, history or structure of the Constitution warrants the Court overturning Congress’s effort to address our national health care problems.

For the health care industry, a decision striking down the entire ACA would be an absolute disaster. Physicians, hospitals, and private companies have been shifting how they practice medicine in anticipation of the ACA’s implementation. They’ve been creating accountable care organizations,[1] envisioning a significant reduction in uncompensated care, and enjoying increased Medicare and Medicaid reimbursement in primary care settings.[2] That will all vanish if the ACA is struck down. Moreover, seniors will pay more for prescription drugs and young adults will be taken off their parents’ insurance. The private insurance industry, which has seen its market shrink significantly over the last decade,[3] will see a real chance to reverse that trend disappear. According to one estimate, if the ACA is overturned, insurers may lose over $1 trillion in revenues between 2013 and 2020.[4]

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The Slippery Slope

There is no doubt that a state can constitutionally require citizens to have health insurance. Why, then, is the Supreme Court fussing over the constitutionality of the individual mandate provision of the Affordable Care Act?

The answer is simple. States have plenary authority to legislate on matters of public policy. The national government, however, is a government of limited powers. It cannot constitutionally act unless the Constitution authorizes it to do so. The central question in the case now pending before the Supreme Court is whether the Constitution grants Congress the authority to require individuals to have health insurance. Opponents of the law argue that it exceeds the legitimate authority of the national government.

The government defends the constitutionality of the individual mandate on the basis of the Commerce Clause of the Constitution, which provides in Article I, Section 8, that Congress shall have the power “to regulate Commerce … among the several States.”

Over time, the Supreme Court has held that under this provision Congress can constitutionally regulate activity if, in the aggregate, it has “a substantial economic effect on interstate commerce.” Moreover, as Justice Rehnquist explained in 1995, the Court’s role in determining the constitutionality of federal legislation under the Commerce Clause is limited to deciding whether Congress “had a rational basis … for concluding that a regulated activity sufficiently affected interstate commerce” to merit federal action.

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The Broccoli Mandate

If you’ve been paying attention to the debate over the constitutionality of the health reform law, you’ve probably heard mention of the hypothetical “broccoli mandate.”

The question, if the federal government can make everyone buy health insurance at a particular coverage level and type, can it make everyone buy anything?

For example, could the federal government require everyone to buy a certain amount of broccoli every year, and assess penalties for a failure to do so? After all, like health insurance, broccoli has the potential to improve health, thereby reducing health care spending and perhaps enhancing economic productivity of the workforce. If the argument works for health care, why not for broccoli?

More to the point: What about the real “broccoli mandate” that the administration is already enforcing?

The idea of a broccoli mandate is a whimsical way of making a serious point.

Both as originally written and subsequently amended, the Constitution is structured under the assumption of limited government – the idea that the federal government’s power is limited to those powers specifically designated as such. Anything else a government might do is either given to the states (for example, highway patrol) or prohibited to government entirely (for example, infringing freedom of speech). The point made by raising the prospect of a “broccoli mandate” is to point out that a few of the powers granted to Congress – such as the regulation of interstate commerce – have been interpreted so broadly over the last several decades that the very idea of limited government has been called into question.

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What About the Employer Mandate? Companies Watching Supreme Court Case

Next week the U.S. Supreme Court will hear 6-1/2 hours of oral arguments concerning the challenges to the Patient Protection and Affordable Care Act (PPACA). This is the most time the high Court has devoted to oral arguments since the 1966 challenge to the Voting Rights Act. Virtually all attention has been on the central question – whether Congress exceeded its Constitutional authority by requiring virtually all Americans to obtain health coverage.  Yet, that is only one of four questions the Court will consider. The other three have received scant attention. And the answer to one of them could have far-ranging consequences for millions of Americans whose coverage is provided by their employers.

The threshold question is a procedural one: whether it is premature for the Court to even consider the case since the PPACA tax/penalty for not obtaining health coverage will not be imposed until 2015, when Americans who fail to obtain coverage in the previous year file their income tax returns. Another question invokes the Constitution’s “Spending Clause” to determine if the Federal funds available to pay for PPACA’s expansion of Medicaid impermissibly coerces – rather than just encourages – the States to comply with the Medicaid provisions. Unexpected decisions on either of these two questions are “wild cards” that could leave the viability of the law in doubt.

The question receiving greatest media scrutiny is whether the Constitution’s “Commerce Clause,” from which Congress derives authority to regulate interstate activity, allows the federal government to require Americans to purchase health coverage. In essence, is declining to obtain health insurance (even though one will still presumably obtain health services) “activity” or “inactivity?”

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Appellate Court Upholds ACA In Opinion By Prominent Conservative Judge

Yesterday, November 8, the United States Court of Appeals for the District of Columbia became the second federal court of appeals to uphold the constitutionality of the minimum coverage requirement of the Affordable Care Act.

To date, one federal appellate court has held the minimum coverage  requirement to be unconstitutional (although severable from the remainder of the ACA), while five other appellate court decisions have held that the courts lacked jurisdiction to consider the challenge brought to them, either because the plaintiffs in the particular case had not been injured by the minimum coverage requirement or because a federal statute, the Anti-Injunction Act, denies jurisdiction.

This is a very important decision.  Judge Laurence Silberman, who wrote the majority opinion upholding the statute, is a highly-respected conservative judge, appointed by President Reagan.  Judge Harry T. Edwards, a Carter appointee, joined Judge Silberman in the majority.  Judge Brett M. Kavanaugh, another well known conservative judge appointed by George W. Bush, dissented in an opinion that was much longer than the majority opinion, but on jurisdictional grounds rather than on the merits.  Kavanaugh would have held, as the Fourth Circuit did in the Liberty University case, that the Anti-Injunction Act deprives the federal courts of jurisdiction.  In the course of his lengthy opinion, Judge Kavanaugh suggests that there may be prudential as well as legal reasons why the courts may want to stay out of this fight, and suggests that if there is in fact a constitutional defect with the ACA (which he does not decide), it could be easily fixed by Congress.

This decision comes down two days before the Supreme Court will consider, and quite possibly decide, whether or not to take certiorari in one or more of four other appellate court cases that have been decided in ACA challenges.  Although a grant of certiorari is almost certain at this point, the D.C. Circuit’s decision, as well as the earlier opinion of Judge Jeffrey Sutton, another prominent conservative who sided with the constitutionality of the ACA in a Sixth Circuit case, will certainly be noted by the Supreme Court justices.  Moreover, the media narrative that seemed to explain the district court opinions—Republican appointees strike down the law while Democratic appointees uphold it—seems again not to work for appellate court judges.  It may not work for predicting the Supreme Court vote either.

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Commerce Clause Challenges to Health Care Reform

The following article, forthcoming in U. Penn. L. Rev., pinpoints the strongest arguments for and against federal power under the Commerce Clause to mandate the purchase of health insurance:   http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1747189

Among the key points I make in defense of this federal law are:

1. The “commerce” in question is simply health insurance, and not the non-purchase of insurance as challengers have framed it.  Because “regulate” clearly allows both prohibitions and mandates of behavior, mandating purchase is lexically just as valid an application of the clause as is prohibiting purchase or mandating the sale of insurance.

2. Although existing precedent might allow a line to be drawn between economic activity and inactivity, there is no reason in principle or theory why such a line should be drawn in order to preserve state sovereignty.  Purchase mandates, after all, are as rare under state law as under federal law.

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