Reagan appointee U.S. District Judge Roger Vinson out of Florida has ruled against PPACA. He ruled against the individual mandate on commerce clause grounds, but as I had predicted, he went further than Judge Hudson out of Virginia and ruled all of PPACA illegal.
Remember: the last thing the insurance companies and Wall Street want is a narrow ruling throwing out just the individual mandate, but leaving in place guarantee issue and community rating. That will not be allowed.
Of course two other Federal judges have ruled that PPACA is legal, and regardless it is going to the Supreme Court.
Meanwhile here is my take:
I remain surprised that most of the discussion has been on the commerce clause. As least on policy and political philosophy grounds (if not legal grounds) I see strong analogy to eminent domain. The individual mandate, especially without a strong public option alternative is like the terrible Kelo decision, whereby the Supremes confirmed the use of eminent domain to transfer land from one private owner to another to further general governmental interest in economic development. As with Kelo, real libertarians and serious liberals/progressives/lefties can agree that the individual mandate is wrong. For any real liberal or progressive, the individual mandate, without at least a strong public option should be an abomination; and always was.
However, the commerce clause is the basis for where the action has been.
The main basis for this appears to be the issue of "severability", wherein since congress did not specify in the language of PPACA that if one element of the law was ruled to unconstitutional that it could be separated out from the rest, therefore they cannot be. Hence if one element is illegal (e.g., the individual mandate), then the ruling is that it is all illegal.
“Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void,”
As Jonathan Cohn points out, the extreme language used by Vinson in rejecting any connection between health insurance and interstate commerce is wrong:
The other striking thing about Vinson's ruling is his reasoning on interstate commerce--and its apparent ignorance of policy reality. Vinson says the mandate is unconstitutional because, in effect, the link between insurance status and interstate commerce is too weak:
...the mere status of being without health insurance, in and of itself, has absolutely no impact whatsoever on interstate commerce (not "slight," "trivial," or "indirect," but no impact whatsoever) -- at least not any more so than the status of being without any particular good or service. [Emphasis in original]
Again, this is just wrong, as anybody who understands the health care market will tell you. When doctors and hospitals give uncompensated care to people without insurance, these providers of care pass along higher prices to everybody else who pays, and those higher prices show up as either larger taxes, larger insurance premiums, or larger out-of-pocket expenses. In addition, if people know they can get insurance even if they have pre-existing conditions, some will wait until getting sick before buying insurance. That upsets the delicate actuarial balance of insurance plans, which depend on premiums from healthy people to offset the costs of the sick. Premiums end up rising even more.
That has always been the wonky policy argument for the individual mandate. In return for guaranteed issue (they have to sell you insurance even if you have pre-existing conditions or are otherwise high risk) and community rating (they cannot base the price of the insurance solely on your individual risk), there has to be a way (they say) to require that the healthy, young, low risk buy into the insurance pool, in order to keep everybody's costs down (and to make sure the insurance product is profitable). The trade-off was supposed to include the public option, that you (or at least some of you) would have a choice to buy from either the for-profit private insurance companies or from a non-profit public entity. From a single payer perspective the better solution has always been "Everybody In and Nobody Out." Everybody pays into the national insurance pool via their taxes, just as they do for national security and social security and other governmental activities and services.
A single nationwide insurance pool is the best policy for a variety of reasons. The reality is that so long as there are multiple insurance pools and for-profits, the main driver of the entire system is cost-shifting, pump & dump, adverse selection, etc.
Igor Volsky suggest's that the anti-commerce clause language is so extreme that it over-reaches, and will result in a public, polioy and legal backlash. We shall see.
Regardless, the Supremes will decide: On the one hand there is a history of them overturning lower court ruling in favor of history we now accept as part of the progressive mainstream, such as social security, voting rights, civil rights and minimum wage. Of course most of those remain under attack from the right. On the other hand, it has been suggested that the harder core right wing idealogues (Scalia and Thomas) have already tipped their hand in a recent ruling, suggesting they are happy to go along with a newly re-narrowed definition of the commerce clause to rule against PPACA.
However, I would suggest that the outcome will depend on whether the Corporatist wing of the court (led by Roberts) will get the message to go along with the insurance industry and wall street's desire for the individual mandate.
However, the broader ruling, and the acknowledgement that the individual mandate (what the insurance industry really wants, but the right has taken to be fought against) is inherently linked to other parts of PPACA that the public like but the insurance industry does not (such as guarantee issue, community rating, regulation of what has to be covered, regulation of how much of premiums has to go back to care, anti-recission, etc.), does make it easier for the courts to allow the latter to be chipped away at.
Don McCanne points out that while the individual mandate was ruled unconstitional and hence the other parts that are directly linked with it might fall, the Medicaid expansion was not! Remember that the Medicaid expansion actually accounts for more than half of the previously uninsured getting covered. And from a single payer persepective this again reinforces the point that even conservatives agree that Medicaid and Medicare are legal and not challengable. Taxes may be used directly to provide coverage. Improved Medicare for All is still the better policy.
Some additional comments:
- You can't make money insuring sick people. Not as a matter of morality, but simply economics. Taking care of sick people is too expensive (even after those other necessary cost cutting reforms) to pay for themselves.
- Avoiding adverse selection, not covering sick people and dumping people once they get sick is the main basis on which the private health insurance industry competes. That is what they did, do, and will continue to do.
Once you understand those two facts, all else follows:
- The mistake remains the whole government enforced mandate for private coverage. The public paying taxes to the government in return for public community-wide government services is not the same as the government using it's police power to force you to buy a for-profit product from a private company. I know defenders of the individual mandate will say the government is not forcing you to buy private insurance. After all, the alternative is a fine, or tax, or maybe a fine (sorry, but disingenuous shifting of what it is and how it has been sold has marked the history of the individual mandate as it evolved from conservative think tanks, to liberalish ones, to Obama, to Congress).
- I really really don't care that striking down the individual mandate, while leaving the limited guarantee issue and community rating intact, will discomfort the insurance companies, or leads to even more threats of increased premiums. This is not being nihlistic and not caring about real people having to pay higher premiums... because guess what... private insurance premiums are going up regardless in case you had not noticed. And they are still jacking up the rates way ahead of inflation and they are still denying claims as their first response. And they are still cherry picking and dumping, so the exchange plans will be subject to adverse selection anyway. This is not coverage. This is just an additional excuse. And if conservatives want to attack guaranteed issue and community rating, I welcome that fight.
- Obviously I support single payer, expanded and improved Medicare for All. As did 55-65 percent of Americans when polled on this by non-partisan non-activist mainstream media outlets from 2003-2009. It is easy to understand and already accepted by the broad spectrum of the American public. Therefore it is off the table.
- But there are many other possible fixes and "fixes" being offered, should Judge Kennedy go Tea Party on the individual mandate (and given his erratic ideological rulings over the past several years this is a possibility, regardless of the fact that several other federal judges have ruled in favor of PPACA and individual mandate): A progressive favorite, short of single payer, would be public option or a Medicare buy-in. This could include a system of default enrollment into a basic public insurance plan (stripped and worsened Medicare for some?). A stronger employer mandate could also help actuarially balance the lack an individual mandate. Other less attractive (for progressives) options include various ways of punishing the healthy who refuse to buy private insurance: back premium penalties, higher deductible or delayed coverage for late sign-ups, limited open-enrollment periods. Nastiest of all, and therefore endorsed by many reasonable centrists, mild liberals and rational conservative, is the idea of a "multi-year waiver" whereby if you refuse to buy insurance now, you can't buy it later (or at least lose your guarantee issue and community rating and any premium subsidy) for some period of time (say five years). These latter ideas are all about preventing healthy people from waiting to get coverage until they sick. They also amount to deliberately keeping people from affordable care if they do get sick; not something I am going to endorse even if Paul Starr does. What they are not about is making sure that everybody has coverage and access to health care, and that costs at both the individual/family level and national/system level are affordable.
- For that you need single payer: The best policy remains "Improved and Expanded Medicare for All": a single universal "All America" insurance pool. There should be no issues of adverse selection. Everybody-in and Nobody-out. It would be paid for by the same progressive taxation we pay for other federal government goods and services including social security, military security and payment on the interest of the national debt. There would guaranteed and automatic enrollment. In addition to getting rid of the problem of adverse selection there would be the savings from getting rid of the private insurance companies as a wasteful unnecessary intermediary. There would be the additional cost savings benefit from monospony (single buyer, multiple sellers) in paying for services, equipment and drugs. There would be added benefits of global budgeting and strategic planning. At the end of the day, single payer is not a dream, it is only system that can actually work.
