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Another Round in the Obamacare Court Battle



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On Friday, the Department of Justice filed its brief appealing the January court decision that struck down the entire Obama health-care law. The brief wasn’t due until Monday, so the government broke with its pattern in this case of filing at the eleventh hour. Either they are getting more on top of their game and were hoping to win brownie points for filing three days early, or they wanted to hit the Friday news cycle to bury the story. (This wouldn’t be the first time.)

Most of the arguments are a review at this stage, but there are some interesting points to highlight:

  1. They revitalize the “Obamacare is a tax” argument.  This argument has been rejected by every court that has considered it so far, but apparently the government isn’t ready to give up the ghost. The Audacity of Hope indeed.
     
  2. The DOJ contests the standing of the states that Judge Vinson had summarily granted standing to. This is consistent with its position in the Virginia case, in which it also contested Virginia’s standing on similar grounds. In truth, the standing issue deserved more discussion than it got, but in this case there are plaintiffs that clearly have standing, so the case would continue either way. 
     
  3. There is additional briefing on the severability issue, and the government now realizes how much is riding on it. But that hasn’t made them tone down their rhetoric about the centrality of the mandate to the larger law. They refer to it as “key to the viability of the Act’s regulation of medical underwriting,” “essential,” and “integral to broader economic regulation.” They actually seemed to backtrack on their concession below that the guaranteed-issue and community-rating provisions must stand or fall with the individual mandate. Gutsy move, but while the Eleventh Circuit may backtrack on Judge Vinson’s complete voiding of the law, I can’t imagine it would strike down the mandate as narrowly as the government is asking.
     
  4. The DOJ’s brief plays fast and loose with its logic when talking about activity and inactivity. They argue that “Congress may regulate the conduct of participants in the health care market even if those individuals are, at a particular point in time, ‘inactive’ in the insurance market.” But Judge Vinson’s point is that if it were merely regulating actual participants in the health-care market, the law would be constitutional. The individual mandate goes farther than that, by trying to regulate the conduct of individuals who are inactive in the health-care market itself — not just the insurance market. They get around it by saying everyone will probably be part of the health-care market eventually, but constitutionality should not turn on mere probabilities.

A couple side points that don’t go to the issue of constitutionality per se, but are interesting:

  1. The government repeatedly appeals to morality as a basis for law, particularly laws that require emergency rooms to provide services to individuals even if they can’t pay for them (it calls refusing service to those who can’t pay a “morally repugnant approach,” for example). That is all well and good, but the Supreme Court’s decision in Lawrence v. Texas seems to suggest that morality isn’t a rational basis for law. I’m glad to see DOJ implicitly agreeing with me that Lawrence is wrong on that point.
     
  2. The government’s argument rests on peculiar notions about how insurance really works. For example, one of its headings states that “the practice of obtaining health care services without insurance” “shifts substantial costs to other participants in the health care market.” True enough, but hardly more so than the practice of obtaining health care services with insurance does.

    The reason health insurance is financially viable is that healthy individuals pay in more than they get out in services, and sick ones pay in less than they receive. Because we don’t know ahead of time which category we’ll be in, those of us with insurance are pooling our risk, but the costs end up shifted in the end. (There are some gains made because insurance companies can use their large numbers of subscribers to bargain down doctors’ and hospitals’ rates, but that actually suggests that it is the uninsured, not the insured, who are getting the short end of the stick.)

    The government seems to view paying the full price of your own health care as a virtue — boasting that the individual mandate “ensures that non-exempted individuals who can afford insurance will pay for the services they consume, rather than shift their costs to others.” If that is truly their goal, they should outlaw insurance altogether. The government further points out that, in households at or above median income, “uninsured people on average pay less than half the cost of the medical care they consume.” Again, that assumes that insured individuals pay full price, which isn’t quite true. My daughter’s recent checkup, for example, was billed at $735, but the insurance company paid only $482.90, a 34 percent markdown. Maybe not half price, but certainly not full price. It is neither here nor there as to the legal argument, but I doubt the difference is as huge as the government tries to portray.

Stay tuned for the next brief from the appellants due Wednesday, May 4.



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