The new fight over Obamacare - Macleans.ca
 

The new fight over Obamacare

A Virginia court decision has ignited constitutional questions, while states seek to roll back Obama’s health care reform


 

Luke Sharrett/The New York Times/ Charlie Riedel/AP/ Carrie Devorah/WENN.com/NEWSCOM

The Obama administration’s health care reform survived hostile town halls, Tea Party protests, and a year of bitter political combat in the U.S. Congress before it was signed into law in March. But now it faces yet another hurdle: a constitutional challenge to what the administration calls its “linchpin” provision. Rather than providing a single government-administered insurance plan the way Canada does, the Obama reform attempts to achieve near-universal coverage by requiring all Americans to buy private health insurance for themselves and their families. Individuals who cannot afford to pay premiums will be subsidized by the government; those who fail to do so will be fined up to US$750. This so-called “individual mandate” begins to phase in in 2014.

The Obama administration says the individual mandate is necessary to control health care costs for everyone. As long as health insurance remains optional, the young and the healthy will avoid paying in, and insurance companies will charge more to cover the relatively older and sicker population. And, without the mandatory coverage provision, other parts of the law—such as a ban on denying coverage based on pre-existing medical conditions—wouldn’t work either, because they would encourage individuals to wait to purchase health insurance until they needed care, which in turn would shift even greater costs onto everyone else.

But opponents of the bill aren’t arguing over its mechanics. When the law was being debated in Congress, they charged simply that nothing in the U.S. Constitution gives the federal government the power to force individuals to buy something. Republican Sen. Jim DeMint of South Carolina called it an “arrogant power grab” and a “trillion-dollar assault on our freedoms.”

After the law was passed, attorneys general in 21 states sued the federal government, arguing that Congress exceeded its constitutional powers. Their critique was dismissed by supporters of the reform as extremist. Democratic Sen. Patrick Leahy of Vermont, chairman of the Senate judiciary committee, denounced what he called “misleading arguments and spurious attacks” that would “stand the Constitution on its head.” “I think there’s pretty longstanding precedent on the constitutionality of this,” said White House spokesman Robert Gibbs. But last week, in one such lawsuit, a federal judge in Richmond, Va., ruled that the issue is far from settled. In doing so, he re-energized a political movement at the state level that seeks to exempt swathes of the country from application of the health care law and to roll back Obama’s signature achievement.

Voters in Missouri voted overwhelming in a referendum last week in favour of the state’s Health Care Freedom Act, which would purportedly exempt the state from the individual mandate—reviving the arguments over whether states have the power to nullify federal laws that had seemed to be settled by the Civil War. Several states have passed similar legislation, and some others, including Arizona and Oklahoma, will put the issue to a vote on the ballot on Election Day in November.

Virginia’s attorney general, Kenneth Cuccinelli, launched his lawsuit as soon as the law was signed in March. He argued that the health care mandate is not authorized by any of the specific federal powers spelled out in the U.S. Constitution, which reserves general lawmaking powers to the states. A former Republican state senator, Cuccinelli has also challenged the right of the federal government to regulate greenhouse gases, denied legal protections to gays and lesbians, and authorized law enforcement to check the immigration status of anyone they stop. The Obama administration responded that the law falls clearly under the federal power to regulate interstate commerce and asked the judge to dismiss the suit on the grounds that the case was so weak there was no point in holding a trial. But on Aug. 2, U.S. district judge Henry Hudson declined to dismiss the case. In a written opinion, he said the power of Congress to force individuals to buy health insurance was far from obvious, and there would be plenty to litigate.

“This case is not about health care, so much as it is about liberty,” Cuccinelli told reporters when the decision came down. Under the Constitution’s commerce clause, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes,” the federal government has been able to justify a variety of activities on the grounds that they would have a “substantial impact” on interstate commerce. Beginning in the 1990s, however, the Supreme Court began cutting away at Washington’s ability to regulate non-economic activity under the clause. In 1995, the court found that the clause did not empower the federal government to regulate handguns in school zones. In 2000, the court struck down the federal Violence Against Women Act, finding that gender-related violence did not impact interstate commerce. (The court, however, seemed to retreat somewhat in 2005, when it allowed the federal government to ban the private cultivation of marijuana despite a California law that permitted it for medical use.)

At the heart of Virginia’s case is the argument that when an individual chooses not to buy insurance coverage, he or she is choosing precisely not to participate in economic activity, and thereby is not covered by the commerce clause. “Thus far in our history it has never been held that the commerce clause?.?.?.?can be used to require citizens to buy goods or services,” Virginia’s brief states. While state governments require that drivers purchase car insurance for the privilege of driving, for example, the federal health insurance requirement applies to everyone simply because they exist. The Obama administration contends that all people are part of the health care market, whether they buy insurance or not. “Congress understood that virtually everyone at some point will need medical services, which cost money. The [law] merely regulates economic decisions on how to pay for those services—whether to pay in advance through insurance or attempt to do so later out of pocket—decisions that substantially affect the vast, interstate health care market,” states the administration’s brief.

The administration also argues that the penalty for failing to buy insurance is authorized under a section that allows the federal government to impose taxes. Virginia counters that lawmakers had intentionally avoided characterizing the penalty as a “tax” in order to build support for the measure in Congress, and could not retroactively declare it to be a tax in order to make it legal.

Judge Hudson did not express any opinion on the merits of the case, which will await a full trial, but concluded there were enough substantive legal issues raised that the case could go forward.

Nonetheless, the judge, who was appointed to the federal bench by George W. Bush in 2002, appeared to embrace Virginia’s characterization of the issue. “Never before,” he wrote, had the federal government’s power to regulate interstate commerce “been extended this far?.?.?.?No reported case from any federal appellate court has extended the commerce clause or the tax clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce.”

The White House says it had full confidence the law would be upheld, and portrayed the litigants as sore losers. “Having failed in the legislative arena, opponents of reform are now turning to the courts in an attempt to overturn the work of the democratically elected branches of government,” said a statement by White House aide Stephanie Cutter. But opponents of the law are encouraged by the judge’s language. “I think it is very significant,” said Randy Barnett, a law professor at the Georgetown University Law Center in Washington, who filed a friend-of-the-court brief supporting Virginia. “Everything we do and don’t do in life could be said to affect interstate commerce by [the administration’s] logic, which would then give Congress the power over everything—and it’s a basic premise of the American constitutional system that Congress does not have a plenary police power over everything.”

If Judge Hudson or an appeals court strikes down the law, it’s almost certain the issue will reach the U.S. Supreme Court. Many legal analysts say the law will ultimately be upheld. Edwin Chemerinsky, dean of the Irvine School of Law at the University of California, says, “It’s inconceivable to me that the Supreme Court would say that regulating health care doesn’t fit within the commerce clause because it’s a trillion-dollar industry.”

And while courts will eventually have to settle the clash between state and federal law, Barnett said the Virginia judge’s decision will energize support for anti-reform ballot initiatives. “We’ve been told that this argument is fringe-y. But this decision will further feed public perception that the mandate is unconstitutional, which will in turn feed political action against the mandate, which will in turn contribute to an atmosphere that will affect future judicial decisions,” said Barnett. But that may be a bet against history. “Through American history, conservatives have objected to progressive change on states’ rights grounds. The civil rights movement, desegregation, the New Deal, the abolition of slavery—all were opposed on states’ rights grounds,” notes Chemerinsky. “In the end,” he points out, “They didn’t succeed.”


 

The new fight over Obamacare

  1. "Individuals who cannot afford to pay premiums will be subsidized by the government; those who fail to do so will be fined up to US$750."

    I think that right there is going to smash Obama's mandate

  2. Great piece, Luiza, thanks.

  3. "Sometimes, you simply cannot force water down the throat of a horse no matter how badly they need it. "

    How about dropping the arrogant tone and understand that Americans value true freedom from government oppression.

    They know what they want and it is not government healthcare.

    • Good for them, standing up to their oppressors. Instead, they will be oppressed by unaccountable corporations. Now that's my kind of freedom!

      • Why does it have to be a choice between repressive governments (like Obama's) and repressive Corporations?

        Why not a government that "referees" the free economy with minimal-but-effective rules that maximize the potential for every citizen to live life to the fullest?

        Bush may have been a failure. Obama is fast turning into a failure.

      • What they should do is cancel Medicare and Medicaid. That would probably help with the deficit and presumably have the support of the Tea Party.

  4. 70% of all taxes collected in Ontario will go to 'health care' in a few years, combine that with the 50% of all taxes going to the bloated 'education system' and pretty soon there's a problem, even if corrupt Liberal math is used, it's called bankruptcy. Rational Americans are smart enough to see writing like that on the wall because as we all know, socialism fails, everywhere it's been tried, every time, the socialist idea is a failure.

    Why does socialism fail every time? It ignores the hard core fact that every person is self-interested and will not work for someone else for free. Politicians know this but they can use socialism to control the suckers that vote for them, so they like it very much indeed.

    • Corporate welfare is the only form of socialism that works. Hopefully, Obama will extend the Bush tax cuts because, if he doesn't, the titans of industry on Wall Street, automakers and the defense industry might have to pay more taxes. This will cause the trickle down to slow and cause massive unemployment.

      Do I have the Fox/Palin talking points down correctly?

  5. You can argue till you're blue in the face that socialism has failed, just like capitalism, communism, monarchy, dictatorship and any other form of government. The American public is poorly educated and ill informed on vast number of topics. When they argue that they don't want any new taxes while anyone with a brain can see that their deficit is spiraling out of control which threatens to destroy the world economy. Or when they buy the excuse that they need to give up their fundamental rights in order to protect themselves against would-be terrorist when you can count on one hand the amount of times the Americans have been hit by terrorist acts on their home soil by foreigners. If Americans are stupid enough to believe that Obama care isn't a step in the right direct, then they only have themselves to blame when more and more companies pick up and leave to go elsewhere for cheaper labour and less environmental restrictions, then they can all work at McJobs that have zero benefits while the elite roll in both the cash and protection.

    • Mcjobs may suck. Obamacare isn't the answer.

      Quite simply, it's immoral for a government to force someone to buy something that they don't want to buy; even if it's good for them. Your average North American feels invaded when fines or jail is threatened unless we conform. That's not a knee-jerk reaction, that's just our love for democracy kicking in.

    • Actually I would argue that taxation is illegitimate in the first place. Further to state that the american public " is poorly educated and ill informed on vast number of topics" is relative and somewhat ignorant.

    • Socialism and communism did fail, but capitalism hasn't at all. Whenever it REALLY has been tried, it succeeded. The problem with the deficit is the ridiculous over-spending by the federal government and a lot of it is outright waste. We don't need a Dept of Education, Dept of Labor, a Dept of Energy, a Dept of Housing & Urban Development. Get rid of that and we can save at least $1 trillion. & frankly the #1 job of the federal government is to protect us from dangers from abroad. Remember 9/11? Obamacare is a disaster as it is based upon the disastrous failure of MA health care. The Boston Globe acknowledged its failure and that is a Liberal source. Get government out of the picture and that will be a step in the right direction. More government means more failure.

  6. This is a superb summary of the issue.

    Opponents of ObamaCare have argued that costs could have been lowered by lifting the ban on buying health insurance from out of state, since that would have arguably increased competition for customers. Presumably, such a measure would obviously satisfy the "interstate commerce" aspect. Somewhere in the hundreds of pages of the new law (I wonder if the elected officials in the House and Senate have yet had a chance to read it…), has the inter-state-purchase prohibition been lifted?

  7. A failure of colossal proportions another whack at theoretical socialism. Those on the left want Utopia and they want someone else to pay for it. The two main screw-ups with Obama and healthcare are his refusal to deal with torte reform as he must be in the pocket of lawyers and his refusal to permit cross State insurance quotes. The other problem no one talks about and it is a reality in Canuckistan as well is the greed of virtually everyone in the medial industry. The latter is the greatest threat to society.

    • Torte reform? Like what, adding more chocolate? Creamier icing?

      The failure of Obama's health bill, should this court challenge succeed, is that he never brought in a single payer option. Ironic, given your comments, that the most likely challenge to this bill is the fact that you cannot force citizens to participate in a capitalist healthcare system. Under a single payer system, this challenge would have no leg to stand on…

  8. Before the question of public expenditure is the question of monetary reform. $400 billion annual on interest. In 2015, the estimated interest due – $533 billion – will be equal to a third of the federal income taxes expected to be paid that year. The American states united are unsustainable.

  9. Universal health care is a good thing, and too bad so many feel for the lies promoted by corporations that profit from the current system that does not work, and politicians that are former insurance agents. Health care reform needed to go farther actually.

    • Universal health care is a doomed failure. We tried it in 4 states(HI for children only, TN twice, ME, & MA) and they all ended in failure and bankruptcy. Those aren't lies from corporations, but the truth. In Canada, UK and elsewhere they are privatizing due to no more money to pay for it. Frankly I won't pay and neither will millions of others a service forced upon us to pay for. Maybe government should force you to clean your neighbors' homes and then force you to pay for the cleaning too, if you think that forcing someone to pay for a good or service is a good idea. The government forcing people to purchase a good or service even if it is beneficial is a severe undermining of our liberty that nullifies our total liberty. If you want to live in tyranny & slavery, go ahead. Pack your bags & go to N Korea, but don't drag the rest of us with you.

  10. Yup. "Freedom" is working out really well financially for California and a bunch of other states that aren't allowed to raise taxes and are about to go bankrupt. So in addition to not having health care, they also wont have roads, police, fire service, water etc. Enjoy your freedom; its going to look a lot like anarchy. Taxes are the price we pay for living in a free society.

  11. Pele says: “…its immoral for a government to force someone to buy something…”

    Did Americans ever approve of the US military invading the Middle East which cost the American taxpayer BILLIONS of dollars? Get with it America. Healthcare before Warfare. Its about time.

  12. Wait, I don't drive but aren't you forced by governments to own insurance for your vehicle?
    Now this isn't quite the same since vehicle insurance is mostly about protecting the individuals in an accident whereas Obamacare (that name has grown on me) is about helping the country control cost; however since the political battle is about government forcing people to buy things, based on those grounds couldn't the government say "if this isn't right, then what about car insurance?"

    • People can choose not to own a car if they object strongly enough to car insurance. It might be inconvenient, but it's certainly doable. There is no such option with mandatory health insurance, short of leaving the country.