Saturday, August 13, 2011

Obamacare Decision in a Nutshell

The 207-page majority opinion in Florida v. Department of Health and Human Services analyzing the 975-page health care law certainly is no model of concise legal writing.  In fact, it can be condensed easily into a single statement:  neither its power to tax nor its power to regulate interstate commerce supports Congress’s unprecedented actions in requiring individuals to purchase health insurance, but the unconstitutionality of that provision does not invalidate the entire law.  The 85-page dissenting opinion can be condensed into one sentence, too:   the aggregate effect of the uninsured affects interstate commerce, and, therefore, the act is a permissible exercise of Congress’ power under the commerce clause.

For those playing at home, the real fun starts on page 99.  From a strictly legal standpoint, I agree with the dissent with respect to the breadth of the commerce clause as generally interpreted since the New Deal, but, from the standpoint of a conservative American taxpayer, I’m thrilled with the majority opinion and hope that the Supreme Court follows the lead of the 11th circuit in reading the commerce clause powers more rationally.  There were two points from the majority opinion I found particularly compelling.

First, the majority could cite to only a few instances where the federal government actually requires something of citizens:  serving on juries, registering for the draft and paying taxes.  Buying health insurance just doesn’t seem to fit within that set of activities that are  fundamental to the operation of the nation itself.

Second, as a cost shifting matter, the court highlighted an exclusion from mandatory coverage for illegal aliens and non-residents, even though they are 19% of the health care costs.  In reality, the ones hit by the cost-shifting are the healthy who forego health insurance (p. 140).

Finally, the court found that even though the individual mandate provision was unconditional, the rest of the law was not invalidated because, according to the court, it was only a small portion of the program.  As much as I’d like to see the whole thing struck down, invalidating the personal mandate is a huge and satisfying win nonetheless.

Here’s the conclusion of the majority opinion which pretty much sums things up:

We first conclude that the Act’s Medicaid expansion is constitutional. Existing Supreme Court precedent does not establish that Congress’s inducements are unconstitutionally coercive, especially when the federal government will bear nearly all the costs of the program’s amplified enrollments.
Next, the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.

Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers.  “Uniqueness” is not a constitutional principle in any antecedent Supreme Court decision. The individual mandate also finds no refuge in the aggregation doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce.

The individual mandate, however, can be severed from the remainder of the Act’s myriad reforms. The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operative after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

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