Tag Archives: healthcare

The opening for a fresh ObamaCare challenge

By defining the mandate as a tax, one that will not be uniformly applied, the Supreme Court ran afoul of the Constitution.

By DAVID B. RIVKIN, JR. AND LEE A. CASEY

ObamaCare is being implemented, having been upheld as constitutional by the Supreme Court in June in a series of cases now known as National Federation of Independent Business v. HHS. It is becoming increasingly clear, however, that the court took a law that was flawed but potentially workable and transformed it into one that is almost certainly unworkable. More important, the justices also may have created new and fatal constitutional problems.

ObamaCare, or the Affordable Care Act, was conceived as a complex statutory scheme designed to provide Americans with near-universal health-care coverage and to effectively federalize the nation’s health-care system. The law’s core provision was an individual health-insurance purchase mandate, adopted by Congress as a “regulation” of interstate commerce. The provision required most Americans to buy federally determined minimum health-care insurance, or to pay a penalty more or less equivalent to the cost of that coverage.

Equally important were provisions requiring creation of state-run health-care insurance exchanges (where middle-income earners could obtain the prescribed coverage) and an expanded Medicaid program (also administered by the states) to cover people with incomes up to 133% (later upped to 138%) of the federal poverty level. An income of up to $31,809 for a family of four would qualify for Medicaid. States that failed to join in the Medicaid expansion were threatened with the loss of all federal Medicaid dollars, nearly a quarter of all state expenditures.

In the ObamaCare ruling, the Supreme Court correctly held that Congress could not impose the individual mandate as a constitutional regulation of interstate commerce and that Congress could not constitutionally use its spending power to coerce the states to expand Medicaid. Rather than strike down the law, however, the court construed the insurance-purchase mandate and its penalty as a “tax” on the failure to have health insurance. The justices also interpreted the Medicaid-expansion requirements as optional—permitting states to opt out of these provisions while staying within the traditional Medicaid program. Given that interpretation, the court’s majority upheld the statute as constitutional.

The court’s determination to preserve ObamaCare through “interpretation” has exacerbated the law’s original flaws to the point that it has become palpably unworkable. By transforming the penalties for failing to comply with the law’s requirements into a “tax,” the court has given the public a green light to ignore ObamaCare’s requirements when it is economically beneficial. Law-abiding individuals, who might otherwise have complied with the law’s expensive purchase mandate to avoid being subjected to financial penalties, can simply now choose to pay a tax and not sign up for coverage. There is certainly no stigma attached to simply paying a tax, and noncompliance with the law’s other requirements—such as those imposed on employers—is arguably made more attractive on the same basis. This effect fundamentally undercuts Congress’s original purpose, which was to expand health-care coverage to the greatest number of people, not to improve federal revenues.

Similarly, having reviewed the likely costs and benefits, states are now taking advantage of the court-granted flexibility. Seven states, including Texas, Mississippi and Georgia, have so far opted out of the Medicaid-expansion provisions, and eight (with more certain to come) are refusing to create the insurance exchanges, leaving this to a federal bureaucracy unequipped to handle these new administrative burdens. As a result, a growing number of low-income Americans will be unable to obtain the free or cost-effective insurance that Congress originally meant them to have, although they remain subject to the mandate-tax.

Policy problems aside, by transforming the mandate into a tax to avoid one set of constitutional problems (Congress having exceeded its constitutionally enumerated powers), the court has created another problem. If the mandate is an indirect tax, as the Supreme Court held, then the Constitution’s “Uniformity Clause” (Article I, Section 8, Clause 1) requires the tax to “be uniform throughout the United States.” The Framers adopted this provision so that a group of dominant states could not shift the federal tax burden to the others. It was yet another constitutional device that was simultaneously designed to protect federalism and safeguard individual liberty.

The Supreme Court has rarely considered the Uniformity Clause’s reach, but it cannot be ignored. The court also refused to impose meaningful limits on Congress’s power to regulate interstate commerce for decades after the 1930s, until justices began to re-establish the constitutional balance in the 1990s with decisions leading up to the ObamaCare ruling this summer. And although the court has upheld as “uniform” taxes that affect states differently in practice, precedent makes clear that a permissible tax must “operate with the same force and effect in every place where the subject of it is found,” as held in the Head Money Cases (1884). The ObamaCare tax arguably does not meet this standard.

ObamaCare provides that low-income taxpayers, who are nevertheless above the federal poverty line, can discharge their mandate-tax obligation by enrolling in the new, expanded Medicaid program, which serves as the functional equivalent of a tax credit. But that program will not now exist in every state because, as a matter of federal law, states can opt out. The actual tax burden will not be geographically uniform as the court’s precedents require.

Thus, having transformed the individual mandate into a tax, the court may face renewed challenges to ObamaCare on uniformity grounds. The justices will then confront a tough choice. Having earlier reinterpreted the mandate as a tax, they would be hard-pressed to approve the geographic disparity created when states opt out of the Medicaid expansion. But that possibility is inherent in a scheme that imposes a nominally uniform tax liability accompanied by the practical equivalent of a fully off-setting tax credit available only to those living in certain states. To uphold such a taxing scheme would eliminate any meaningful uniformity requirement—a result that the Constitution does not permit.

ObamaCare was always a poorly conceived and constitutionally deficient statute. The Supreme Court’s ruling upholding the law has simply made it worse. In the future, that decision is likely to be seen as a prime reason that the federal courts should judge and never legislate—even in the cause of rescuing an otherwise unconstitutional law from oblivion.

Messrs. Rivkin and Casey are lawyers in the Washington, D.C., office of Baker & Hostetler LLP. They pioneered the constitutional arguments against the individual mandate and represented 26 states in challenging ObamaCare before the trial and appellate courts.

A version of this article appeared December 6, 2012, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: The Opening for a Fresh ObamaCare Challenge.

Source: http://online.wsj.com/article/SB10001424127887324705104578151164101375482.html?mod=djemEditorialPage_h

The Supreme Court ruling on federal government’s police powers: The good, the bad, and the Fig Leaf

The Supreme Court ObamaCare ruling is the topic at a Federalist Society forum on October 4 at Florida International University College of Law. David Rivkin, who led the 26-state case against the US government, and Prof. Elizabeth Foley will present.

FOR IMMEDIATE RELEASE


PRLog (Press Release)
 – Oct 01, 2012 -

The issue of government takeover of healthcare isn’t going away. While Chief Justice John Roberts’ opinion on the legality of ObamaCare put limits on Congress’ power to regulate citizens’ activity, it gutted limitations on Congress’ taxing power.

David Rivkin, who led the 26-state case against the U.S. government in Florida’s 11th District Court (whose judge, Roger Vinson, ruled in the plaintiffs’ favor), said that the Supreme Court decision in June was both “excellent and bad.” The Supreme Court ObamaCare ruling is the discussion topic on Thursday, October 4, at Florida International University College of Law.Prof. Elizabeth Foley, a “founding faculty” of the FIU College of Law, will serve as commentator for the event.

Over the past decades, Congress has enacted legislation that increasingly broadened its regulatory powers, assuming that any regulation is justified by the Constitution’s Commerce Clause. The Supreme Court decision established limits on Congress’ power to do so. For those interpreting the Constitution as limiting and enumerating the powers of government, this aspect of the ruling was good news.

Unfortunately, according to Rivkin, the Supreme Court’s decision to uphold ObamaCare required that they effectively rewrite the law and broaden Congress’ tax authority. They converted the individual mandate into a tax for not purchasing insurance. Rivkin asserted that this expansion of the taxing power enables Congress to tax inactivity—crossing a constitutional barrier into police powers.

Rivkin has observed that the Supreme Court adheres to the principles of federalism, i.e., the dual sovereignty of the federal government and the states, only when ruling on laws that are not important—a position commonly known as “fig leaf federalism.”

For more information about David Rivkin, visit http://www.fed-soc.org/events/detail/the-health-care-mand…

Source: http://www.prlog.org/11988497-the-supreme-court-ruling-on-federal-governments-police-powers-the-good-the-bad-and-the-fig-leaf.html

ObamaCare’s Supreme Court fallout: The good, the bad, and the Fig Leaf

David Rivkin Analyzes the Supremes’ Decision at the Cato Institute’s annual Constitution Day symposium on Supreme Court rulings. The Chief Justice’s opinion expanded Congress’ taxing power in order to uphold the ObamaCare legislation.
 
FOR IMMEDIATE RELEASE
 
DRIV Screen shot 2012-09-19 at 9.02.14 AM
DRIV Screen shot 2012-09-19 at 9.02.14 AM

PRLog (Press Release) – Sep 19, 2012 – Washington D.C. – The ObamaCare issue isn’t going away. While Chief Justice John Roberts’ opinion put limits on the Congress’ power to regulate citizens’ activity, it gutted limitations on Congress’ taxing power.  So said constitutional attorney David Rivkin at the Cato Institute’s Annual Constitution Day symposium on the Supreme Court rulings.  The symposium was held yesterday at the institute’s conference facility in Washington, D.C.

David Rivkin, who led the 26-state case against the U.S. government in Florida’s 11th District Court (whose judge, Roger Vinson, ruled in the plaintiffs’ favor), said that the Supreme Court decision in June was both “excellent and bad.” For years, Congress has enacted legislation that increasingly broadened its regulatory powers, assuming that any regulation is justified by the Constitution’s Commerce Clause.  The Supreme Court decision put limits on Congress’ power to do so.  For those interpreting the Constitution as limiting and enumerating the powers of government, this aspect of the ruling was good news.

Unfortunately, according to Rivkin, the Supreme Court’s decision to uphold ObamaCare required that they effectively rewrite the law and broaden Congress’ tax authority.  They converted the individual mandate into a tax for not purchasing insurance.  Rivkin asserted that this expansion of the taxing power enables Congress to tax inactivity—crossing a constitutional barrier into police powers that are generally reserved for the states.  

Rivkin observed that the Supreme Court adheres to the principles of federalism, i.e., the dual sovereignty of the federal government and the states, only when ruling on laws that are not important—a position known as “fig leaf federalism.”

To view a video on the symposium, visit http://www.cspan.com. For more information about David Rivkin, visit http://www.davidrivkin.com.

Source: http://www.prlog.org/11978584-obamacares-supreme-court-fallout-the-good-the-bad-and-the-fig-leaf.html