On Sunday, March 21, 2010, President Barak Obama signed into law “The Patient Protection and Affordable Care Act”, known popularly as “ObamaCare” which had been passed by the United States Congress a few weeks earlier. It still boggles the mind of many people why House Speaker Nancy Pelosi and the Democrats felt the need to pass such a comprehensive bill (2,400 pages) so quickly. The primary response seems to be that delaying the vote is that if the members of Congress actually knew what they were voting for they might actually object.
“Every word of this bill is subject to an argument in court”, United States Supreme Court Justice Stephen Breyer told Congress on April 15, 2010. He was addressing a concern about how few cases the Supreme Court accepts for review, totaling about one percent of the cases brought before it. Justice Breyer then implied that it would probably need to expand its workload soon: “You have passed a law with 2,400 pages. It probably has a lot of words. I would predict, as a test of my theory,that three of four years from today, no one is going to ask us again why we have so few cases.” Justice Breyer was obviously referring to ObamaCare which House Speaker Pelosi insisted should be passed so that the public could then learn what was in it, after passage.
One of the legal challenges to the constitutionality of ObamaCare is the lawsuit brought by the Association of American Physicians and Surgeons (AAPS) filed three days after the bill was signed to law.1 Nearly two dozen states sued to block implementation of the bill based upon numerous constitutional defects; however, only one national medical society sued: AAPS. In contrast to the other lawsuits, AAPS filed its action in Federal court in the District of Columbia, a court accustomed to hearing challenges to Federal laws and regulations. AAPS is unique in asserting the Takings Clause, as will be discussed further below.
So what is in the massive 2,400-page ObamaCare monstrosity? Legislative mandates will require private citizens to purchase government-controlled health insurance, which will include the costs of many new Federal mandates such as paying for sex offenders to use Viagra. Citizens who fail to purchase government-approved insurance plans will pay a penalty of 2.5 percent of their income. There are exemptions and subsidies for Americans based upon the level of their annual income; those who make less, whether by choice or circumstance, get a free ride.
The law forces insurance companies to spend at least eighty (80) or eighty-five (85) percent, depending on the size of the plan’s group, on government approved medical care, leaving nothing for reimbursement for non-government approved care. With this master stroke, insurance reimbursements for innovative care will drop to zero as insurance companies will have neither the incentive nor the funds to make payouts above and beyond the government threshold.
ObamaCare was based in part on the program enacted in Massachusetts, and signed by then-Governor Mitt Romney. Back in 2006, Governor Romney declared in The Wall Street Journal: “Some of my libertarian friends balk at what looks like an individual mandate. Remember, someone has to pay for the health care that must, by law, be provided. Either the individual pays or the taxpayer pays. A free ride on the government is not libertarian.”2 The fact is that government interference in medical care is not libertarian either.
Now having Presidential ambitions of his own, Mr. Romney is distancing himself as far from ObamaCare as possible. After Massachusetts imposed its individual mandate to require people and businesses to purchase insurance, many chose to remain uninsured rather than buy a product that they do not want. Others yielded to government force, and then decided to use what they have been forced to buy, thereby rushing into physician’s offices and causing long waiting times that can approach a year merely to have a simple physical. Some physicians in Massachusetts even see groups of patients at the same time, eliminating individual visits.
If a substantial percentage of the public refuses insurance that conforms to government requirements, then the insurance companies could go out of business due to the heavy costs of the new mandates without offsetting individual premiums to fund them. The result might be what many supporters of ObamaCare have wanted from the outset, so that government can then swoop in with a single pay substitute. However, the opposite could result: a free market could emerge and cause real reform when the stranglehold of socialized medicine is thrown off.
Patients and physicians are not the only ones affected by ObamaCare. Health insurance companies have been subjected to expensive mandates: 1) The bill prohibits lifetime and annual limits of expenses, 2) The bill limits coverage exclusions of pre-existing health conditions in adults, 3) The bill prohibits traditional insurance company bans on pre-existing health conditions in children, 4) The bill requires direct access to obstetrical and gynecological care, which will include abortion, and 5) Health plans are prohibited from discriminating against any providers, but are also not required to contract with any providers, so physicians who take insurance will still be heavily influenced by insurance company controls.
Many of the 2,400 pages in the bill establish vast new bureaucracies and cumbersome displacements of the free market. While President Clinton, in his inaugural address, stated that “the era of big government is over”, since that date in 1993 more than 400,000 pages have been added to Federal Register.3 It looks like the era of big government has actually gotten a second wind. For example,
the bill requires, by 2014, the creation of health insurance exchanges or marketplaces that will be state-based and state-administered. Insurance can be sold within the exchange only if government approved; insurance can be sold outside of the exchange, but it is doubtful there will be much of a market for that. States can opt out of the exchange only if and when they satisfy certain government-mandated conditions.
The bill requires health plans to develop politically correct services, such as community outreach and so-called cultural competency training. The implication is that physicians are currently culturally insensitive and that community outreach is presently of no concern to them. This is untrue on both counts.
The bill requires a new Consumer Operated and Oriented Plan (CO-OP) program, supposedly with the goal of creating non-profit member-run health insurance companies in every state. It seems unlikely; however, that any of these CO-Ops will be able to coexist with private insurance. Over time, one approach will likely squeeze out the other.
Many articles against the bill have been published in newspapers and on blogs. Twenty-one states and AAPS have challenged the constitutionality of the bill. On May 14, the largest association of small businesses—the National Federation of Independent Businesses (NFIB)—joined the lawsuit brought by many states in Florida. If Justice Breyer’s expectation becomes reality, then the United States Supreme Court will likely have the last word in a few years on whether the bill is constitutional.
Most of the lawsuits focus on the lack of constitutional authority for Congress to bring the practice of medicine under Federal control, and to require individuals to purchase insurance. Directing Americans’ medical care is not one of the powers delegated by the people to the government in the Constitution. The bill violates the Tenth Amendment, which reserves to the states and the people all powers not expressly conferred by the Constitution on Congress.
Several commentators have noted that never in history has Congress penalized or taxed inactivity (the lack of buying insurance). The Sixteenth Amendment limits the power to tax to income, and a tax on a failure to purchase insurance is not a tax on income.
The constitutional justification provided by Congress in the text of the bill is the Commerce Clause:
The individual responsibility requirement provided for in this
section…is commercial and economic in nature, and substantially
affects interstate commerce, as a result of the effects described in
paragraph (2).
Paragraph 2 states:
The requirement regulates activity that is commercial and economic
in nature; economic and financial decisions about how and when
health care is paid for; and when health insurance is purchased.
However, as Professor Randy Burnett astutely observed in The Wall Street Journal 4, the Joint Committee on Taxation released a very different 157 page ‘technical explanation’ of the bill on the same day that it passed. This ‘explanation’ of the constitutionality of the bill did not even mention ‘commerce’, but instead claimed that the tax authority of Congress was adequate power for it:
[W]hile the enacted bill does impose excise taxes on “high cost”,
employee-sponsored insurance plans and “indoor tanning services”,
the statute never describes the regulatory “penalty” it imposes for
violating the mandate as an “excise tax”. It is expressly called a
“penalty” [emphasis in original]
Professor Burnett then explained how several Supreme Court precedents have struck down as unconstitutional penalties that are falsely characterized as taxes. For example, the court held that “there comes a time in the extension of the penalized features of the so-called tax when it loses the character as such and becomes a mere penalty with the characteristics of regulation and punishment (quotations and citations omitted).5 Also, “Inquiry into the hidden motives which may move Congress to exercise a power constitutionally conferred upon it is beyond the competency of the courts.”6
There are other powerful legal arguments against the constitutionality of the bill. Some note that the exemption from the mandatory insurance requirement for religious groups such as the Amish is too narrow to satisfy the constitutional protection for the free exercise of religion by all Americans. There are also objections to the procedures used by Congress to enact the bill. There is a privacy-based objection, because forcing citizens to purchase insurance intrinsically forces them to divulge confidential medical information to insurance companies.
In addition to asserting many of the claims above, AAPS includes a special claim that is lacking from most other suits: the individual mandate forcing people to buy insurance is an unconstitutional “taking” of property from one person (a patient) to give to another (the insurance company). While the U.S. Supreme Court famously upheld (by a narrow 5-4 margin) the taking of the home of Susette Kelo to give it to Pfizer against her wishes (under color of eminent domain for public use with the court-mandated “just compensation”), “the taking of cash (insurance premiums) from one person to give to another without “just compensation” is a different matter.
In Brown v. Legal Foundation, 538 U.S., 216 (2003), the U.S. Supreme Court unanimously held that a “law that requires that the interest on [client] funds be transferred to a different owner or a legitimate public use; however, could be a per se taking requiring the payment of “just compensation to the client.” At issue in Brown was the constitutionality of a Washington law requiring attorneys to deposit client trust funds in a common account for the benefit of a legal aid program if the individual interest amounts to less than individual administrative costs. Though the Supreme Court split 5-4 against compensating the client for the taken interest because the administrative costs exceeded the value at stake, all Justices agreed that seizure of this interest did constitute a taking for purposes of the Fifth Amendment.
A similar unconstitutional “taking” occurs under ObamaCare when an individual is forced to pay for insurance that he does not want, and which may not cover the medical care which he does need. At least some of his premiums—perhaps as much as 20%--goes toward administrative costs or profits that have no benefit to the individual forced to pay it. Under the reasoning embraced by the U.S. Supreme Court in Brown, this is a taking prohibited by the Fifth Amendment. In other words, he should not be forced to buy insurance in the first place. AAPS will cite this precedent to argue for invalidation of this “taking” of property in the form of the mandatory insurance payments.
AAPS adds two more claims missing in the other lawsuits. AAPS demands an honest accounting of the Medicare and Social Security programs.
Some, perhaps surprisingly, are cautiously optimistic that free enterprise will expand amid the rubble and ruins wrought by this legislation. A horse brought to water will not always drink, and a people told to buy an unwanted insurance product may decline to do so and choose to pay the penalty instead. The experiment with mandatory insurance in Massachusetts, a comparably wealthy state where socialism is popular and there are relatively few uninsured has been an abject failure. Imposing that same approach on a nation nearly fifty times as large and not as wealthy as Massachusetts could cause a larger failure. The free market is not so easily conquered by misguided legislation, and not even the Berlin Wall and barbed wire could suppress freedom forever.
On May 11, 2010, an “unbeatable” member of Congress who voted for ObamaCare lost by a stunning 56-44 percent margin in his own Democratic primary. Alan Mollohan made a decision on that fateful day of Sunday, May 21st, and provided one of the final swing votes to enable ObamaCare to pass. Evidently the people of his West Virginia district disagreed with him, and sent this popular, charismatic 14-term Congressman to an unexpected early retirement.
The people support freedom in medicine. However, to reverse ObamaCare, physicians will need to band together with the people, both colleagues and patients.7
Enactment of ObamaCare has been called “a historic moment in U.S. social policy.” Elenora E. Connors and Lawrence O. Gostin of the Georgetown University Law Center write that “Like Medicare and Social Security, which were highly contested before enactment, national health insurance reform hopefully, will, in time, become part of the social structure.”8 Nevertheless, as we have seen, the program may be designed to fail.9
Even Governor Romney does not want to be associated with the health insurance plan he signed into law. If the plan in Massachusetts is a disaster and ObamaCare is structured heavily on the plan in Massachusetts it does not bode well for America. We cannot even maintain Medicare and Social Security without having to either print more money or cut medical services to the bone, so how can we ever hope to maintain another boondoggle government program which will only add to the mess in Washington, D.C. instead of helping us to clean up the mess which is already there?
End Notes
1)AAPS v. Sebelius et. al U.S. District Court, District of Columbia, 2010
2)E.J. Dionne “Health Care Reform Nullifiers Taking Us Back to 1830s” Charleston Gazette April 1, 2010: 4A
3)Edward R. Annis “Toward Socialized Medicine (Part II): Fighting the Leviathan” Journal of American Physicians and Surgeons Spring 2003:8(1)18-19
4)R.E. Burnett “The Insurance Mandate in Peril” Wall Street Jrnl., April 29, 2010
5)Dept. of Revenue v. Kurth Ranch 511 U.S. 767, 779 (U.S. 1994)
6)Sonzinsky v. U.S. 300 U.S. 506,513-14 (1937)
7)Andrew J. Schlafly “ObamaCare: Not What the Doctor Ordered” Journal of American Physicians and Surgeons Summer 2010:15(2) 57-59
8)E.E. Connors and L.O. Gostin “Health Care Reform—A Historic Moment in U.S. Social Policy” JAMA 2010:303:2521-2522
9)Jane M. Orient “ObamaCare: What Is in It” Journal of American Physicians and Surgeons Fall 2010:15(1) 87-93
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