Federalism and Obamacare
Liberals discover state’s rights in a Hail Mary to save the health law.
March 4, 2015 7:03 p.m. ET
A closely divided Supreme Court heard arguments in the challenge to ObamaCare’s illegal subsidies on Wednesday, and the session spun off in an unexpected and provocative direction: To wit, several Justices suggested that the Affordable Care Act as drafted would unconstitutionally coerce the states.
King v. Burwell turns on the statute’s plain text limiting health subsidies to those insurance exchanges established by the states, rather than the 36 run by the federal government as fallbacks. This condition for federal dollars was meant as an incentive for Governors to participate in ObamaCare, which is the normal framework whenever Washington wants to enlist the states to act on its behalf under cooperative federalism, from Medicaid to highway funding to clean-air laws.
But Justices Anthony Kennedy, Elena Kagan and others wondered if this arrangement crosses over from Congress merely attempting to influence state decisions into using spending and regulation to compel these sovereigns to join ObamaCare. “From the standpoint of the dynamics of federalism . . . there’s a serious constitutional problem if we adopt your argument,” Justice Kennedy told plaintiffs counsel Michael Carvin.
The brief version of this contention is that the Affordable Care Act’s rules and mandates artificially increase the cost of health insurance in the name of social equity and income redistribution. The subsidies are meant in part to offset this intrusion into the market. Without the subsidies, consumers would be exposed to the full cost of ObamaCare’s political agenda and fewer would buy overpriced health plans as a result. Insurers could go into a “death spiral” in which premiums keep climbing but still don’t cover claims.
The Kaiser Family Foundation estimates consumer out-of-pocket spending would jump 256% on average without subsidies. In other words, under this theory, Governors must choose between cooperating with ObamaCare or destroying their insurance markets.
The Obama Administration has never explicitly made this case (that would be awkward). But the point has been developed by liberals like Abbe Gluck of Yale Law and deserves elaboration.
One problem is that coercion precedents like South Dakota v. Dole (1987) involve situations in which the states were given an initial choice to cooperate, or not. Then the federal government later sought to fundamentally change the terms of a longstanding bargain by threatening to withhold spending, take it or leave it. For this reason, in a 7-2 ObamaCare decision from 2012, the High Court ruled that states could not be forced to expand Medicaid.
That is not the same as this case. If Governors decline to establish an exchange, their citizens are not entitled to benefits, but that is not coercion. That is the very trade-off that is supposed to encourage states to participate. If the subsidies will flow no matter what, few if any states would become the partners the Administration wanted.
More to the point, federalism is supposed to protect political accountability. Two-thirds of the states made an informed decision to rebuff ObamaCare, but if voters prefer otherwise, they can elect new Governors who won’t. If federal subsidies flow no matter what, then states aren’t presented with a real choice. That isn’t how federalism works in the American system. As Justice Kennedy rightly noted, the exchange decision was partly “a mechanism for states to show they had concerns about the wisdom and workability of the act in the form that it was passed.”
As for the insurance markets, it’s healthy that liberals at last appreciate that their own regulations are destructive. Yet in the 1980s and 1990s, eight states including Kentucky, Washington and New York imposed the same rules—without subsidies. In other words, the regulations are supposedly valuable by themselves to achieve liberal policy goals.
Liberals are invoking faux federalism at this late hour to appeal to Justice Kennedy’s separation-of-powers instincts and persuade the Court to sanction both federal and state subsidies under a doctrine known as “constitutional avoidance.” That means the courts abstain from interpreting statutes in ways the produce unconstitutional results.
But they cannot use this doctrine to rewrite laws in which the statutory language is as clear and consistent as the Affordable Care Act on the distinction between federal and state exchanges. The Supreme Court has already rewritten ObamaCare once in order to save it. If the Justices really want to vindicate federalism, they should uphold the law as written and force Congress to confront the consequences of its reckless legislating.
wsj.com
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More Phony ObamaCare Numbers From The White House
03/16/2015 07:09 PM ET
Health Reform: The Obama administration says more than 16 million have gained insurance, thanks to ObamaCare. But a closer look at the numbers shows they're once again playing fast and loose with the data.
A two-page report from the Dept. of Health and Human Services claims the uninsured rate fell from 20.3% to 13.2% since ObamaCare began.
Officials there cheered this news, with one saying that "nothing since the implementation of Medicare and Medicaid has come close to this kind of change."
It's not what it seems. To get to its 16 million number, HHS uses Gallup poll data — not the Census Bureau's far more comprehensive survey — for its calculations.
Gallup does show a drop in the uninsured rate. Although its numbers differ from the administration's, it finds that the rate dropped from around 17% in 2013, where it had been since 2011, to 12.9% in Q4 2014.
Whatever numbers are used, the administration conveniently overlooks the fact that those years of high uninsured rates were also when the economy was in the middle of Obama's jobless recovery.
A better comparison would be with the uninsured rate before the recession, not when it hit its peak during the slow recovery. If you do that, you see the recent drop is likely due to the economy, not ObamaCare.
Gallup's data show, for example, that the uninsured rate was just over 14% in early 2008, which was after the recession had already started, but before the economy began to hemorrhage jobs.
And Census Bureau data show the uninsured rate peaked in 2010 at 15.5% and steadily fell after that. By 2013, it was down to 14.5%. Census data also show that the average uninsured rate from 1999-2007 was 14%.
Also, Census started using a new survey method in 2013, which it claims provides a more accurate measure of the uninsured. This new measure puts the uninsured rate in 2013 at 13.4% (which is very close to where Gallup says it is now). Census won't release its data for 2014 — the first full year of ObamaCare — until this fall.
It would hardly be surprising if that report shows a continued drop in the uninsured rate in 2014. And there's no reason to think ObamaCare's $80 billion in subsidies didn't contribute something to the decline.
But the real story here is that ObamaCare will spend $1.7 trillion more over the next decade, but only cover less than half the uninsured. There are better, less costly ways to tackle this problem.
news.investors.com
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Obamacare Channels Orwell
By Washington Examiner
March 6, 2015
Toward the end of Wednesday's oral arguments in the latest Obamacare case to make it to the Supreme Court, Donald Verrilli, U.S. Solicitor General, argued that the administration's interpretation of the healthcare law was the most deferential to states. The argument, apart from coming from an administration that has consistently asserted a robust role for the federal government, was a bid to win over Justice Anthony Kennedy, a key swing vote, who raised concerns about the federalism implications of the suit.
At issue in the case, King v. Burwell, are the subsidies that the federal government provides for individuals buying insurance through Obamacare. The text of the Affordable Care Act says subsidies are to go to people obtaining insurance through an "exchange established by the state," but an IRS rule subsequently said subsidies would also apply to exchanges set up by the federal government on behalf of states. Those challenging the law argue that the IRS acted illegally, and that Congress intentionally excluded exchanges set up by the feds so as to induce states to do it themselves; if they didn't, their residents wouldn't get subsidies.
Verrilli argued that the law's text "is designed to afford state flexibility" and that the challengers' interpretation would contradict this. He added, "It would be an Orwellian sense of the word 'flexibility' to use it in the manner that petitioners say the statute uses it, because it's the polar opposite of flexibility." The implication was that this would be preposterous.
In truth, Orwellian semantics are a standard aspect of Obamacare, a law that's named the "Patient Protection and Affordable Care Act" even though in reality it has triggered the cancellation of individual health insurance plans, narrowed choices of doctors and hospitals, and jacked up the sticker price of insurance.
If you want to get a sense of how Orwellian the law actually is, just look at the section cited by Verrilli — 1321. It promises "state flexibility," as he noted, but starts by instructing the secretary of Health and Human Services (a federal official) to "issue regulations setting the standards for meeting the requirements" for states creating exchanges, offering health insurance through the exchanges and managing risk in the insurance market. It also says the federal government can impose "such other requirements as the Secretary determines appropriate." So any state that sets up an exchange must abide by a mountain of federal regulations and that it can only offer insurance policies that meet the federal definition.
Any state that acts under this section to create an exchange, must do so "at such time and in such manner as the Secretary may prescribe." States, the law specifies, must meet federal standards and pass a state law "that the Secretary determines implements" those standards. Is that what passes for "flexibility" these days?
This is just a small taste of the Orwellian language used in Obamacare, particularly when it comes to the role of states. Another section advertises a "Waiver for State Innovation," which in plain English, one might think would be a way for states to avoid the mandates of Obamacare, and instead develop creative healthcare policies that best serve the unique needs of their populations. For instance, some states might prefer to focus on reducing costs by encouraging the adoption of cheaper catastrophic plans attached to health savings accounts — providing individuals more control over their healthcare dollars while still protecting them against financial ruin in case of major medical setbacks. But that sort of innovation isn't possible under Obamacare. The "waiver" option doesn't even kick in until 2017 and it comes with many strings attached. All insurance offered in the states must be "at least as comprehensive as the coverage" defined by Obamacare. That coverage must be offered on an exchange, and states must prove their proposals would cover as many people as Obamacare.
Given this history of twisting language, it comes as no surprise that the administration spent Wednesday arguing that when the authors of Obamacare made subsidies available to an "exchange established by the state" they really meant, "established by the state or the federal government."
washingtonexaminer.com |
