Anti-Obamacare Forces Whiffed at Yesterday’s Hearing

by Avik Roy

A lot of people have been complaining that LeBron James is struggling in the NBA Finals. Based on yesterday’s oral argument in front of the 11th Circuit Court of Appeals in the main Obamacare constitutional challenge, I’m starting to feel the same way about Paul Clement, who is literally regarded as the LeBron of Bush administration lawyers: the best constitutional advocate of his generation.

I agree with most commentators that the three-judge panel, comprised of two Clinton appointees and a George H. W. Bush appointee, appeared quite skeptical of the constitutionality of the individual mandate. But Paul Clement, who represented the states, and Michael Carvin, who represented the National Federation of Independent Business, made a number of unforced errors in their defense of Roger Vinson’s lower court ruling that Obamacare was unconstitutional in its entirety.

Specifically, while it’s true that acting Solicitor General Neal Katyal was “on the ropes” for most of the discussion of the individual mandate, it was Clement and Carvin who were on the defensive when challenged on whether or not the mandate could be severed from the rest of Obamacare, leaving the remainder of the law intact.

And, while it’s perhaps asking too much for constitutional lawyers to bone up on health policy, Clement and Carvin largely conceded that Obamacare’s individual mandate would help solve the “free-rider problem,” implicitly justifying its constitutionality under the Necessary and Proper Clause, when in fact Obamacare will worsen the free-rider problem.

With regards to severability, Judge Frank Hull and others repeatedly asked the plaintiffs: Did they really believe that every provision of Obamacare would be adversely affected if the individual mandate was overturned? Their answer was, implausibly, yes. But this is plainly silly: Is, for example, the federal takeover of the student loan program, contained within PPACA, substantially affected if the individual mandate is overturned? It’s doubtful.

Judge Vinson, in his lower court ruling, made a far more reasonable case. He conceded that “in a statute that is approximately 2,700 pages long and has several hundred sections — certain of which have only a remote and tangential connection to health care — it stands to reason that some (perhaps even most) of the remaining provisions can stand alone and function independently of the individual mandate.” But Vinson pointed out that judges are not equipped to “try to infer Congress’ intent” and become health policy wonks (emphasis added):

However, the question is not whether these and the myriad other provisions can function as a technical or practical matter; instead, the “more relevant inquiry” is whether these provisions will comprise a statute that will function “in a manner consistent with the intent of Congress.” See Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 685, 107 S. Ct. 1476, 94 L. Ed. 2d 661 (1987) (emphasis in original). Thus, the first step in the severability analysis requires (at least to some extent) that I try to infer Congress’ intent. Although many of the remaining provisions, as just noted, can most likely function independently of the individual mandate, there is nothing to indicate that they can do so in the manner intended by Congress. The analysis at the second step of the severability test makes that conclusion pretty clear.

With regards to the free-rider problem, only at one point did either Clement or Carvin attack the individual mandate on policy grounds: Carvin pointed out that the amount of health-insurance subsidies provided by Obamacare exceeded the amount of money we currently spend on uncompensated care. (For example, in Massachusetts, Romneycare has reduced uncompensated care spending by about $250 million, but the law’s insurance subsidies cost $830 million and are rapidly growing.)

There is an even greater flaw in the “free-rider” argument. The only reason that we have a free-rider problem in the first place is because Congress passed a law in 1986, called the Emergency Medical Treatment and Active Labor Act, or EMTALA, forcing hospitals to provide free emergency care to anyone who needs it, including illegal immigrants, without regard to their ability to pay. It makes little sense that an otherwise unconstitutional provision (the individual mandate) suddenly becomes constitutional because Congress passed EMTALA.

Constitutional arguments shouldn’t require a discussion of the intricacies of health policy. But the core of the pro-Obamacare case is a policy argument: that the individual mandate is a necessary component of Congress’ efforts to improve our health-care system. This argument is plainly false, and Clement and Carvin need to make that clear.

— Avik Roy is an equity research analyst at Monness, Crespi, Hardt & Co., and blogs on health-care policy at The Apothecary. You can follow him on Twitter at @aviksaroy.

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