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Analysis: Handicapping Health Care Lawsuits, And The Truth-In-Labeling Factor
Source:
(KaiserHealth)
Reporter:
KaiserHealth Staff
Location:
Washington, DC, United States
Published:
September 14, 2011 08:05 pm EDT
Topics:
Health, Healthcare Policy, Crime, Law And Justice, Justice And Rights
Beneath the thousands of pages of legal arguments in the health care lawsuits to be decided sooner-or-later by the Supreme Court lies an easier-to-grasp, if largely unarticulated, background question.
Can Congress and the president use an unprecedented and potentially limitless expansion of the power to regulate interstate commerce to avoid the political hazards of calling a tax a tax? Or might some justices effectively impose a constitutional truth-in-labeling requirement?
In order to explore these questions, it's important to first review the current tally of wins and losses. So far, one federal appeals court in June upheld the mandate by 2-1. A second struck it down in August by 2-1. And a third on Sept. 8 threw out two other challenges on jurisdictional grounds. Federal district courts have also issued conflicting rulings.
With more cases in the pipeline, it's certain that the Supreme Court will step in to decide the mandate's fate. The final decision will probably come down next June, if the Obama administration files its petition for review promptly this autumn, but certainly by 2013.
Most legal experts have long predicted that the Supreme Court will uphold it. Although the confidence level has dipped as lower-court judges have gone both ways, Walter Dellinger, former acting solicitor general under President Clinton, predicts a 7-2 vote to uphold. Tom Goldstein, another leading Supreme Court advocate, who represents AARP as a friend of the court supporting the law, predicts 7-2 or 6-3, adding that "the opponents of the law have done a tremendous job at articulating their theory, and they've gotten more traction than I imagined they would," but he doesn't "see a realistic chance of them winning."
But David Rivkin, one of the lead lawyers challenging the health care law, confidently predicts a 5-4 vote to strike down the individual mandate.
Based on the current lay of the land, I'd put the chances at about 25 percent to 33 percent that the mandate is overturned. The court seems even less likely to sweep away the rest of the 975-page law, according to legal experts following the case closely.
For starters, the court's four Democratic appointees seem almost certain to vote to uphold the law. And Justice Clarence Thomas seems almost certain to vote to strike it down. Still, it's harder to call the other four Republican appointees, Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Samuel Alito. Each side in the health care litigation has cited one or more opinions written or signed by each of these four justices. But even on the questionable assumption that each is a good bet to vote with Thomas, the odds seem against all four doing so. (For example: 2/3 x 2/3 x 2/3 x 2/3 = 16/81.)
Examining The Arguments Against The Mandate
This is not to deny that the health law's challengers have very respectable arguments against the mandate, which would in 2014 require millions of healthy people either to buy health insurance policies or to pay financial penalties.
First, the mandate is without precedent. Congress has never before passed a law requiring Americans to buy a commercial product that they don't want in the name of regulating interstate commerce. And the novelty of a far-reaching new requirement may (or may not) count against its constitutionality, the court has said in prior cases.
"Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or service," the Congressional Research Service reported in 2009, while the health care bill was pending.
Second, although the justices have construed very broadly Congress's power to regulate commercial activity, they have never held that Congress may regulate even inactivity, by requiring people who want to be left alone to engage in commerce. As such, the mandate encroaches on individual liberty and autonomy in a way that is sure to trouble those justices -- especially Kennedy, who is often the pivotal vote -- who see judicially imposed limitations on the commerce power as vital protections of liberty.
Third, although only two Supreme Court decisions (in'95 and 2000) since'37 have struck down acts of Congress as exceeding the commerce power, they stand for the proposition that that power must be restrained by some meaningful, judicially enforceable limiting principle. Opponents of the individual mandate have made a strong case that a decision upholding it would effectively give Congress unlimited power to require people to buy vegetables, cars and anything else that Congress might choose to promote.
"If Congress may compel individuals to purchase health insurance from a private company," Chief Judge Joel Dubina, of the 11th Circuit Court of Appeals, wrote in an August 12 decision striking down the individual mandate but upholding the rest of the law, "it may similarly compel the purchase of other products from private industry, regardless of the 'unique conditions' the government cites as warrant for Congress's regulation here."
Fourth, there is that truth-in-labeling concern. While never expounded as a formal doctrine, this point stems from the distinction between Congress' broad power to regulate interstate commerce and its even broader power to "lay and collect taxes" – a theme running through the current litigation.
The court has long ruled that the taxing power is virtually unlimited, on the assumption that the political process is an adequate safeguard against excessive or abusive taxes -- at least, if the taxes are undisguised. And this is an important point to remember as the legal action continues to unfold.
Tax Or Penalty?
One of the ways the president and his allies wanted to offset the costs health insurers would bear under the health law's guaranteed-issue requirement is to require millions of Americans to spend billions of dollars on health insurance, even though many of them might otherwise choose not to buy it.
The most constitutionally unassailable way to do this would have been to raise the taxes of these Americans while offering tax credits to those who bought expensive, government-approved health insurance.
But as U.S. District Judge Roger Vinson, of Pensacola, Fla., asserted in one of the early rulings against the law, "Not only are taxes always unpopular, but to do so at that time would have arguably violated pledges by politicians … to not raise taxes, which could have made it that much more difficult to secure the necessary votes for passage."
So Congress devised the individual mandate to extract the money from taxpayers while strenuously asserting that the penalty for noncompliance was not a tax. Since the health law's passage, though, the Obama administration has argued that this penalty is a tax, and thus should be upheld as an exercise of the taxing power, as well as of the power to regulate commerce.
But even most of the judges who have upheld the mandate as a regulation of interstate commerce -- as well as those who have struck the mandate down -- have rejected the administration's position that it is also a valid exercise of the taxing power.
Different Supreme Court precedents appear to point in different directions on whether the commerce power is broad enough to justify the individual mandate. Here's why I am laying odds that they will uphold it:
--The court's most recent precedents suggest (ambiguously, to be sure) that the only judicially enforceable limit on the commerce power is that Congress cannot use it to regulate non-economic, personal, local activities.
--The health care and health insurance markets massively affect interstate commerce. In the words of an opinion upholding the mandate by Bush-appointed Judge Jeffrey Sutton, "No one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk. Each requires affirmative choices; one is no less active than the other; and both affect commerce."
And for all the objections to regulating "inactivity," the individual mandate is no more intrusive on personal liberty and autonomy than, say, the Social Security and Medicare taxes, which serve similar purposes.
This analogy to the Social Security and Medicare laws, which included clearly labeled taxes, only highlights the truth-in-labeling objection to the individual mandate, which is arguably a tax in disguise. But truth does not come easy to politicians. And in this case, the justices may turn to an important principle: When the constitutional arguments for and against striking down a major act of Congress seem almost equally strong, say advocates of judicial restraint, the court should defer to the people's elected representatives -- no matter how unpopular they are with the people.
"Time assuredly will bring to light the policy strengths and weaknesses of using the individual mandate as part of this national legislation," as Judge Sutton concluded, "allowing the people's political representatives, rather than their judges, to have the primary say over its utility."
Taylor is a contributing editor for National Journal.
- Provided by Kaiser Health News.
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