This spring the U.S. Supreme Court will decide what may well be the case of the century — the constitutional challenge to Obamacare. But will the case be heard by eight or nine justices?
Before the health care law was even passed, the Department of Justice had been meeting to develop a strategy for defending the law from constitutional attack. Involved in this effort was none other than Elena Kagan, now the newest Obama appointee to the Supreme Court.
Federal law requires Supreme Court justices to recuse from a case if they had earlier “participated as counsel” in the case. Justice Kagan did just that when she was Obama’s solicitor general, but has never explained why she believes she is nevertheless justified in sitting on the case under this standard.
One simply can’t be the coach and referee in the same game. At best, knowing the playbook will color your judgment, and at worst, you’ll be on the lookout for chances to give your former team an advantage.
Here are the facts. It took two lawsuits to get “the most transparent administration in history” to release emails detailing Kagan’s involvement in the Obamacare defense. Those emails show that, in a highly unusual move, she ordered her staff to become involved in the defense before the law was even passed.
On November 14, 2011, the Supreme Court decided to review a decision of the Eleventh Circuit Court of Appeals striking down the minimum coverage requirement of the Affordable Care Act (ACA) as unconstitutional. The case will probably be argued before the Court in March and decided in the early summer.
Procedurally, the Court “granted certiorari.” This means that it agreed to review certain questions raised by the certiorari petitions presented by the various parties in the Florida case, including the plaintiffs who challenged the constitutionality of the Affordable Care Act — 26 states, the National Federation of Independent Business, and two private individuals — and the federal government, which defended the Act’s constitutionality. The Eleventh Circuit had ruled against the federal government on the question of whether the minimum coverage requirement of the ACA is constitutional, but had ruled against the plaintiffs on all other issues.
The Supreme Court did not rule on certiorari petitions pending before it from the Virginia, Liberty University, and Thomas More cases, two of which rejected a challenge to the ACA on jurisdictional grounds and the other of which held the minimum coverage requirement to be constitutional. (The Virginia petition was not yet before the Court, as it was filed later than the others). The fact that the Court only granted petitions in the Florida case probably signals nothing about the Court’s ultimate decision, as the Florida case raises all of the issues raised by the other cases and reviewing additional cases would have merely made the case more complex administratively.
By agreeing today to hear challenges to President Obama’s 2010 health care law, the Supreme Court set the stage for a decision — probably in late June and in the midst of the presidential campaign — that could be among its most important in decades.
The case, which will probably be argued in March on a date still to be announced, is especially momentous because it not only will determine the fate of President Barack Obama’s biggest legislative achievement but also will cast important light on the Supreme Court’s future course under Chief Justice John Roberts on issues of federal government power.
The central issue — but not the only important one — is whether Congress exceeded its constitutional powers to regulate interstate commerce and to levy taxes when it adopted the so-called “individual mandate” at the heart of the health care law.
That provision would require millions of people starting in 2014 to buy commercial health insurance policies or pay financial penalties for failing to do so.
The court also agreed to decide a challenge to the Affordable Care Act’s provision essentially requiring states greatly to expand their Medicaid spending.
The court made clear that if it decides to strike down the individual mandate or Medicaid provision, it will also decide which of the 975-page law’s hundreds of other provisions should go down too, by divining whether Congress would have wanted some or all of them to be effective even without the voided provision or provisions.
Any ruling by the Supreme Court on the constitutionality of the Affordable Care Act’s controversial individual mandate isn’t likely for at least another several months, but it’s worth thinking about what might happen after the case is decided. The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear: If the Court finds the mandate unconstitutional, do they find it severable from the rest of the law? If not, they’ll strike the whole ACA down. This seems like the least likely outcome. If, on the other hand, they do invoke severability, the ball is back in the White House’s court. The decision at that point would be whether or not health reform can be successful without the individual mandate.
The concern here is the death spiral first described by Nobel Prize-winning economist Joseph Stiglitz. In essence, if we don’t require everyone to buy insurance, then insurance will be disproportionately purchased by the sick, making it more expensive and leading many to discontinue coverage in a continuous cycle that drives the price higher and higher until no one can afford insurance any more and the system collapses. By contrast, getting everyone into the pool is seen as the only way to keep costs down and maintain the insurance system. So the question is: What happens if the Supreme Court strikes down the individual mandate? Does the Obama adminsitration wash its hands of health reform, proclaiming that it can’t be done without the individual mandate because costs will rise too rapidly and the insurance system will collapse, or does it forge onward and see what happens?
Serendipity is not a word one usually associates with the present raucous debate over the “individual mandate” of the Patient Protection and Affordable Care Act. Democrats tend to support both the mandate and the PPACA, while Republicans tend to oppose both. However, this “between the devil and the deep blue sea” approach, whereby one makes a Hobson’s choice between being tyrannized by a government command to buy health insurance, or seeing no comprehensive health reform enacted in a country that needs it, is a false dichotomy, serendipitously enough.
The PPACA offers comprehensive reform, including welcoming features such as guaranteed issue of insurance regardless of preexisting medical conditions. However, the fact that the PPACA has valuable features doesn’t automatically legalize any possible measure designed to fund the Act, including coerced health insurance purchase. As former Vermont governor Howard Dean noted in August 2010 on MSNBC’s The Daily Rundown, Vermont enacted a successful state health care program without an individual mandate; Dean emphasized, “And people don’t like to be told what to do.” This latter factor is not negligible in a country with a statue in New York Harbor dedicated to liberty. (Perhaps this is why a June 9, 2011 CNN poll shows 54% of Americans opposed to the mandate, and other polls report similarly.)
Our American liberty has various constitutional and legal underpinnings which can defend people from the federal individual mandate, and maybe even from state individual mandates. As for Congress’ power to tax for the general welfare: taxes and penalties, such as the “Shared Responsibility Payment”, the PPACA financial penalty for refusal to buy health insurance, are not just interchangeable “economic incentives”.
Wednesday, September 28 was a busy day at the Supreme Court clerk’s office.
It had been widely expected that there would be a major pleading filed with the clerk in an Affordable Care Act challenge, as the response of the United States to a certiorari petition in the Sixth Circuit’s Thomas More case, which had upheld the ACA as constitutional, was due. A cert. petition asks the Supreme Court to exercise its discretion to review the decision of a lower court, and the losing plaintiffs in Thomas More had requested the Supreme Court to reverse that decision and find that Congress had no authority under the Commerce Clause of the Constitution to adopt the ACA’s minimum coverage requirement.
The Justice Department did file a response in that case, but very late in the day. Earlier in the day, to the surprise of most observers, three certiorari petitions were filed, asking the Court to review thedecision of the Eleventh Circuit Court of Appeals in the Florida case, which had held the minimum coverage requirement to be unconstitutional. The Eleventh Circuit upheld several other rulings of the lower court finding other parts of the ACA to be constitutional, and had reversed the decision of the lower court striking down the entire ACA as being not “severable” from the minimum coverage requirement.
Late in the morning on the 28th, the National Federation of Independent Business and two individuals, plaintiffs in the Eleventh Circuit case filed a cert. petition, asking the Supreme Court to reverse the decision of the Eleventh Circuit refusing to hold the entire ACA to be unconstitutional. An hour or so later, the twenty-six states that are plaintiffs in the Eleventh Circuit case filed their own cert. petition asking the Court to strike down the entire ACA, but also asking the court to reverse the appellate court’s decision upholding the constitutionality of the ACA’s Medicaid expansions and of the employer mandate as applied to the states.
It may have looked like a non-event, but it was a significant one.
Monday September 26 was the last day on which the Obama administration could ask the Eleventh Circuit Court of Appeals to reconsider its three-judge panel’s ruling that the Affordable Care Act’s individual mandate was unconstitutional. The fact that the Justice Department took no action almost certainly means that its intent is to ask the Supreme Court to decide the issue.
The administration’s thinking was most likely dependent on three factors. First, given that the full Eleventh Circuit is considered even more conservative than the three-judge panel that struck down the mandate, the only advantage of a second hearing would have been to delay consideration by the Supreme Court. Against this was presumably factored the political risk of a further well-publicized rejection of the mandate providing additional ammunition for opponents of reform.
Second, the administration may still be able to delay a Supreme Court decision either by filing its request for a hearing at the last possible moment in November, or even by asking for a filing extension—something that the Court might be willing to consider, given the potential impact of a decision in the middle of a presidential election.
Twenty years ago, IMS Health got the idea to purchase prescription records from pharmacies, license physician information from the AMA’s Physician Masterfile, and link the two databases so as to create something new and different: prescriber-level data (PLD).
It was a brilliant idea. Almost immediately, pharmaceutical and device companies, government analysts and public health officials began lining up to buy raw PLD and/or the reports that IMS created from it.
And with good reason. By applying statistical tools to analyze PLD (a technique known in the vernacular as “Data Mining”) IMS and the purchasers of its data could obtain fresh insight into many topics of interest. These include prescribing pattern variations across regions, where and when influenza outbreaks occur, how physicians respond to these outbreaks and hundreds of others. Drug makers found PLD information to be particularly helpful. With it, they could refine marketing pitches and improve sales force efficiency, among other things.
Since those early days, the scope of the data compiled by IMS and other PLD providers has expanded to a point where it is truly breathtaking. The AMA Masterfile includes current and historical data on 880,000 physicians. IMS and similar companies collect information on more than 70% of all prescriptions filled in the US. SDI Health, another PLD provider, has billing information from 100% of inpatient and outpatient activity at 500 hospitals dating back to 2002. Their databases are large enough to detect national trends and withstand the most exquisite stratification analyses. Furthermore, PLD providers have perfected ways to exclude information from their databases that could be used to identify patients, so the data comply with HIPAA and other privacy-protecting laws.
The debate about a public health insurance option mirrors the debate
about public power in the 1920’s and 30’s. The arguments then were very
similar to the arguments we hear today.
The principal issue then was whether the federal government should
enter the public power business by investing taxpayers’ money to build
the Tennessee Valley Authority and to harness the Columbia and other
rivers for electrical energy, or whether the sites should be transferred to the
private sector. A second issue was who should build transmission lines
and set wholesale prices when the Federal government built dams.
The answer to the second question was first enunciated on the Senate
floor in the fight over the Wilson Dam in 1920 by Senator John Sharp
Williams of Tennessee. He said, “The government should have somewhere a
producer of these things that should furnish a productive element to
stop and check private profiteering.” Thus was born the yardstick
federal policy which later found its way into TVA legislation through
the efforts of Nebraska’s Senator George Norris. In a 1932 campaign
speech in Portland, Oregon, Franklin Roosevelt referred to his TVA and
other regional proposals as “yardsticks to prevent extortion against