Monday, June 11, 2012

Purely Legal Questions in a Political District

Though Washington, D.C., is a very political place, I find it refreshing to reflect on the legal arguments underlying some of the major cases to be decided by the U.S. Supreme Court over the next three weeks. But in doing so, I am not explicitly endorsing a particular political position. Retired Associate Justice John Paul Stevens has argued that Obamacare is likely constitutional and should be upheld under the Supreme Court's precedent case Gonzales v. Raich. While Justice Stevens wrote the majority opinion in Raich, he is still quite a crafty nonagenarian. 
Questions often arise, in one form or another, like the following:

“How can Congress use the commerce clause to compel commerce? If Congress can compel me to purchase insurance to help cover the government's cost of my healthcare, can it likewise compel me to walk 30 minutes a day to reduce it? If not, what's the distinction?”

“What is the difference between paying a tax penalty for refusing to buy health insurance (because those fees will be used to lower the Government's costs to cover your healthcare needs) and having to walk 30 minutes a day (because it will make you healthier and act as a ‘preventative care,’ thus lowering the government’s costs to cover you because you will have fewer potential healthcare needs)?”

“Why can the federal government compel me under the law to purchase a commercial product, or fine me for noncompliance? If the answer is that the government has a compelling interest in keeping its costs under Obamacare down, then my next question is could the federal government compel mandatory calisthenics to satisfy the same government interest?”

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Below I provide both a fewer-than-fifty-word response and a longer response.

Fewer-than-fifty-word Response: read points numbered 1. and 2. below.
Longer Response: read the entire note.

1. The government can't compel you to purchase a commercial product or pay a fine in this instance because you already pay for health insurance (I assume).

(If you do not pay for health insurance, please proceed to number 2.)


2. The government already does compel you to purchase a commercial product: "retirement insurance," or Social Security.

(If you do not pay for Social Security, please proceed to number 3.)


3. Analytically, there probably is no distinction between the “individual mandate” and the “individual calisthenics.” If Congress can do the former, it should be able to do the latter (assuming, arguendo, that the goals of both regulations are to lower the total cost of healthcare and that a rational relationship exists between calisthenics and lower healthcare costs). But practically, the difference is that, if given the choice between the two, most Americans would rather pay for a year’s supply of get-out-of-gym-class notes than have to go to gym class 365 days a year.

(If this practical difference is not convincing, please proceed to number 4.)


4. We don't need to seriously pursue the question of a calisthenics mandate because the individual mandate does not present a constitutional question that requires strict (or even intermediate) scrutiny. Seeing as how the Lochner era is far behind us, the right to contract freely is no longer a heavily protected right. Congress doesn't need a compelling interest behind its economic regulations, just a legitimate interest. Congress's chosen regulation of having every citizen maintain a minimum level of health coverage (or pay a tax) need only be rationally related to achieving its legitimate interest in lowering the cost of healthcare for all citizens. We have high healthcare costs in large part because of the high number of people who choose to "self-insure" for the cost of healthcare services rather than buy health insurance. (See quoted passages below for actual numbers). Because the chosen regulation eliminates the self-insurers, the regulation should decrease the cost of healthcare. Because the regulation should decrease the cost of healthcare, the regulation is rationally related to achieving the legitimate interest in lowering overall healthcare costs.

(If you think Congress is attempting to “compel commerce/economic activity,” please proceed to number 5.)


5. Self-insuring for the cost of healthcare services is an economic activity.
The minimum coverage provision regulates activity that is decidedly economic. In Raich, the Supreme Court explained that “‘[e]conomics’refers to ‘the production, distribution, and consumption of commodities.’” Consumption of health care falls squarely within Raich 's definition of economics, and virtually every individual in this country consumes these services. Individuals must finance the cost of health care by purchasing an insurance policy or by self-insuring, cognizant of the backstop of free services required by law. By requiring individuals to maintain a certain level of coverage, the minimum coverage provision regulates the financing of health care services, and specifically the practice of self-insuring for the cost of care. The activity of foregoing health insurance and attempting to cover the cost of health care needs by self-insuring is no less economic than the activity of purchasing an insurance plan. Thus, the financing of health care services, and specifically the practice of self-insuring, is economic activity.
Thomas More Law Ctr. v. Obama, 651 F.3d 529, 544 (6th Cir. 2011) (emphasis added) (citations omitted).


6. The Emergency Medical Treatment and Active Labor Act (EMTALA) was enacted "to ensure that individuals, regardless of their ability to pay, receive adequate emergency medical care." Bryant v. Adventist Health Sys./W., 289 F.3d 1162, 1165 (9th Cir. 2002). Thus, federal laws (not to mention sound principles of ethics and human decency) require healthcare providers to treat people who have no ability to pay for their services. Those unpaid costs end up increasing the cost of healthcare for everyone who is insured.

Congress had a rational basis to believe that the practice of self-insuring for the cost of health care, in the aggregate, substantially affects interstate commerce. An estimated 18.8% of the non-elderly United States population (about 50 million people) had no form of health insurance for 2009. Virtually everyone requires health care services at some point, and unlike nearly all other industries, the health care market is governed by federal and state laws requiring institutions to provide services regardless of a patient's ability to pay. The uninsured cannot avoid the need for health care, and they consume over $100 billion in health care services annually. The high cost of health care means that those who self-insure, as a class, are unable to pay for the health care services that they receive. Congress found that the aggregate cost of providing uncompensated care to the uninsured in 2008 was $43 billion. Congress also determined that the cost of uncompensated care is passed on from providers “to private insurers, which pass on the cost to families.” This cost-shifting inflates the premiums that families must pay for their health insurance “by on average over $1,000 a year.” Rising premiums push even more individuals out of the health insurance market, further increasing the cost of health insurance and perpetuating the cycle. Thus, the practice of self-insuring substantially affects interstate commerce by driving up the cost of health care as well as by shifting costs to third parties.
Self-insuring for the cost of health care directly affects the interstate market for health care delivery and health insurance. These effects are not at all attenuated as were the links between the regulated activities and interstate commerce in Lopez and Morrison. Similar to the causal relationship in Wickard, self-insuring individuals are attempting to fulfill their own demand for a commodity rather than resort to the market and are thereby thwarting Congress's efforts to stabilize prices. Therefore, the minimum coverage provision is a valid exercise of the Commerce Power because Congress had a rational basis for concluding that, in the aggregate, the practice of self-insuring for the cost of health care substantially affects interstate commerce.
Thomas More Law Ctr. v. Obama, 651 F.3d 529, 544-45 (6th Cir. 2011) (emphasis added) (citations omitted).


7. Generally, the Patient Protection and Affordable Care Act (PPACA) is a good thing for people who already maintain health insurance (and for those who cannot afford health insurance). Why are we concerned about the cost of health insurance decreasing? I suppose the other rational way to decrease health insurance costs is to deny healthcare services to every self-insurer who cannot afford to pay for emergency treatment. We could kill off two laws, EMTALA and PPACA, and it would solve the problem.
Calisthenics, while very tempting, does not seem tailored to achieve the desired goal. 

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What other possibilities are there that could serve the desired goal of reducing healthcare costs and expanding coverage across the board? Leave a comment below.

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