ACA

In a recent column, Michelle Malkin explained how Obamacare price controls, FDA and DEA rules, and Obama administration policies have contributed to shortages of crucial life-saving drugs, relying on (and linking to) sources as varied as ABC News, The Wall Street Journal, and the New England Journal of Medicine. Earlier, law professor Richard Epstein, a leading authority on property rights, explained how Medicare regulations and price controls are helping spawn shortages of cancer drugs needed by chemotherapy patients and others. As biotech expert Greg Conko has noted, the FDA contributes to critical drug shortages because it “requires manufacturers to seek approval just to increase production,” thus artificially limiting production, and “it continues to shut down facilities for minor infractions,” further exacerbating shortages.  If shortages are a problem, why on Earth would an agency require permission — and cumbersome red tape — before a manufacturer can expand production of that drug? In spite of its role in causing the life-threatening drug shortages, the Obama administration has sought to demagogue the issue and place the blame entirely on drug makers.

Earlier, CEI filed an amicus brief challenging the constitutionality of Obamacare, arguing that the 2010 healthcare law unconstitutionally exceeds Congress’s powers under the Commerce and Spending Clauses. Regardless of whether it is constitutional, Obamacare is also harmful to the economy, medical innovation, and the health care system. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

In the Washington Examiner, I discuss the brief I recently filed on behalf of Minnesota and North Carolina legislators challenging Obamacare, which highlights a lesser-known constitutional infirmity that plagues the massive new health care law passed in 2010: its Medicaid provisions violate limits on Congress’s power under the Spending Clause. Reason‘s Peter Suderman discusses the recent oral arguments before the United States Court of Appeals for the Eleventh Circuit in the challenge to Obamacare in Florida v. U.S. Department of Health and Human Services, the case in which we filed our brief, and how a judge viewed a related legal argument under the Spending Clause as being “powerful.” A Florida trial judge struck down Obamacare last year on a different ground: that its individual mandate violates limits on Congress’ power under the Constitution’s Commerce Clause. I previously explained why the individual mandate is unconstitutional.

204 more waivers of Obamacare’s onerous mandates have been issued over the past month, bringing the total to at least 1,372. As I explain in the Washington Examiner, the waivers are going to the biggest supporters of Obamacare, and allies of the Obama administration. Meanwhile, other, less politically-connected applicants have had their requests for waivers rejected. AARP, whose support for Obamacare mystified many seniors, has now received lucrative exemptions worth millions that put it at a competitive advantage over its rivals in the health insurance market.

Columbia University law professor Philip Hamburger argues that the arbitrary waiver process makes Obamacare unconstitutional (see his National Review columns on the subject here, here, and here). Moreover, the unpredictable and standardless nature of the waivers are one way in which Obamacare violates the clear-statement rule contained in the Supreme Court’s Spending-Clause decisions, argue the leaders of the Minnesota and North Carolina legislatures. Obamacare also contains racial discrimination and race-based preferences that were criticized by the U.S. Commission on Civil Rights.

Thanks to Obamacare, 22,000 seniors lost their high-quality healthcare plan in New England. AT&T, Caterpillar, John Deere, and Verizon reported massive cost increases, while insurance premiums rose massively in some states. The new healthcare law also harms medical innovation.

In Tuesday’s Washington Post, Glenn Kessler looked at Republican claims about Obamacare, such as the claim that it “is a ‘government takeover’ of the health care system.” He said that claim was “not true,” and approvingly cited PolitiFact’s controversial claim that this was the ‘2010 lie of the year.’” (He didn’t mention that PolitiFact’s claim was rebutted by newspapers like the Wall Street Journal, or the president’s own prediction that his health care plan would eventually lead to a government-run “single-payer” health care system.)

PolitiFact based its claim that Obamacare will not lead to a government takeover of health care on the false contention that Obamacare is not like European socialized medicine because the “European approach” is “where the government owns the hospitals and the doctors are public employees.” But that was a straw man argument, since the government does not own all the hospitals or employ most of the doctors even in many European nations long run by socialist parties.

France’s universal health care system is a classic example of the “European approach.” But even there, “doctors and other health care professionals are mostly self-employed,” especially general practitioners,” including all the physicians who have ever treated my daughter, a French citizen. Nor does the government own all the hospitals. For example, the private sector there has “half of all surgical beds.” Moreover, 92.2 percent of all French people purchase additional private insurance. When my father-in-law, a socialist trade unionist, recuperated from his quadruple bypass, he did so at a private convalescent home, using his supplemental private health insurance policy. Nonetheless, given its government’s dominant role in funding and supervising the health care system, France is commonly described as having socialized medicine.Moreover, the government’s share of healthcare spending is already higher in America than in various foreign countries. As a health care economist noted a few years ago, “the Swiss government only pays for 24.9% of health care costs (compared with 44.7% in the U.S.).” (PolitiFact itself had admitted that the government’s share of health care spending was already at 46 percent, and other estimates range up to 55 percent, if you add together state and federal spending.) Switzerland, not the United States, is the “country with highest annual out-of-pocket household spending on health.”

Obamacare will greatly increase the government’s share of health care spending by radically expanding state Medicaid programs to cover 16 million more people, resulting in the government paying for the lion’s share of health care spending in America. That is plausibly viewed as a government takeover.

Moreover, our health care system will become “government-run” under Obamacare in important ways. Obamacare imposes onerous government rules on our health care system, creating much more red tape than exists in many European countries, and turning health insurers into tightly-controlled public utilities. It will also spawn a potentially vast wave of lawsuits against state governments and private employee-benefit plans.

As a Wall Street Journal reader argued in criticizing PolitiFact, under Obamacare, government control is pervasive: “Government defines what health insurance is. Government defines what ‘minimum essential coverage’ is. Government forces everyone to buy one of four varieties of overpriced, low-value health insurance. . . .Congress establishes 159 government agencies to run the new health-care system. The government grants new powers to the Secretary of Health and Human Services, who will ‘deem,’ ‘create,’ ‘define,’ ‘determine,’ ‘approve,’ ‘disapprove’ and otherwise dictate everything about health care in America. The government takes away the power of individuals to appeal bad decisions by the secretary to the courts. The government penalizes doctors who don’t . . . follow cookbook medicine guidelines while expanding rationing powers of government and the insurance companies that it now effectively controls.”

As another Wall Street Journal reader noted, the fact that Obamacare “requires 15,000 to 18,000 additional IRS agents for implementation” is another sign of expanding government control. (An estimated 16,500 IRS agents will be required to implement the health care’s law requirements – the “biggest expansion of the IRS since World War II”).

The American people see Obamacare as a government takeover of health care, although not all view that as a bad thing. PolitiFact itself admits that “53 percent of respondents in a Bloomberg poll said they agreed that ‘the current proposal to overhaul health care amounts to a government takeover.’”

(While it dramatically increases regulation and red tape, the health care law has done little to control costs; health insurance premiums have risen substantially in many states as a result of its passage, such as a 47 percent increase for some policyholders in Connecticut.)

At best, PolitiFact’s claim that the government takeover of health care is a “lie” is as silly as saying it’s a lie to call a glass that’s half-empty “half-full.”

Obamacare is making state budget problems much worse, as governors now lament. Earlier, CEI filed an amicus brief in Florida v. HHS on behalf of two governors explaining how the radical changes to state Medicaid programs resulting from Obamacare violated limits on congressional power under the Constitution’s spending clause. Some of the fiscal burdens Obamacare imposes on states are obviously huge, while many others are ambiguous, unpredictable, and contingent on bureaucratic caprice, and uncertain future events.

Governors like Phil Bredesen (D-Tenn.) and Donald Carcieri (R-R.I.) warned earlier about the crippling costs of Obamacare to state budgets, but they were ignored by Obama and Congressional Democrats in their headlong rush to pass the health care bill. An adviser to Gov. Bredesen, James Blumstein (a professor of constitutional and health care law at Vanderbilt), argues that Obamacare is a violation of constitutional limits on Congress’s power under the spending clause.

In his ruling striking down Obamacare’s individual mandate (requirement that people buy health insurance), Judge Hudson in Richmond declined to strike down the rest of the law, believing that the unconstitutional part of Obamacare, which violated constitutional federalism constraints, could be severed from the rest of the law. But the health care law lacks a severability clause, and lawyer Ken Klukowski filed a brief in Florida’s challenge to Obamacare explaining why the entire law should logically be struck down. In Reason, Peter Suderman explains why even if Obamacare is not struck down in its entirety, the courts should at least strike down some other provisions that are related to the individual mandate, such as Obamacare’s ban on insurers taking into account pre-existing conditions.

As I noted earlier in The Washington Examiner, “To justify preserving the rest of the law, the judge cited a 2010 Supreme Court ruling that invalidated part of a law — but kept the rest of it in force. But that case involved a law passed almost unanimously by Congress, which would have passed it even without the challenged provision. Obamacare is totally different. It was barely passed by a divided Congress, but only as a package. Supporters admitted that the unconstitutional part of it — the insurance mandate — was the law’s heart. Obamacare’s legion of special-interest giveaways that are ‘extraneous to health care’ does not alter that.” In short, Obamacare’s individual mandate is not “volitionally severable,” as case law requires.

Moreover, even if a single unconstitutional provision could be severed from Obamacare to preserve the remainder, that would not fix its other constitutional violations. The individual mandate, which exceeds Congress’ power under the Interstate Commerce Clause, is not the only unconstitutional provision in the health care law. Obamacare also violates the Tenth Amendment through Medicaid expansion provisions that transgress spending-clause limits applicable to federal-state programs, as I explain in an amicus brief for two governors in Florida v. HHS.

Law Professor James Blumstein, a constitutional and healthcare expert and advisor to Gov. Phil Bredesen (D-Tenn.), makes a different, but powerful, constitutional argument here that is also based on the Constitution’s spending clause.

Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

A ruling in Virginia’s constitutional challenge to Obamacare’s individual mandate is expected later today.  The Competitive Enterprise Institute joined in an amicus brief filed in support of Virginia’s lawsuit by the Cato Institute and constitutional law professor Randy Barnett.  You can find that amicus brief at this link.

Earlier, I discussed why the health care law’s individual mandate (requirement that individuals buy health insurance) exceeded Congress’s power under the Interstate Commerce Clause.  You can find that discussion at this link.  (I was a lawyer in the last Supreme Court case that struck down a federal law under the Commerce Clause, United States v. Morrison, 529 U.S. 598 (2000).)

The judge in the Virginia case, U.S. District Judge Henry Hudson, earlier rejected the government’s motion to dismiss Virginia’s lawsuit at a preliminary phase (a Rule 12(b)(6) motion to dismiss).

Update: Judge Hudson rules against the Obama administration, finding that the individual mandate is unconstitutional.

Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

Obamacare is going to wipe out 800,000 jobs through its disincentives to work.  That contrasts sharply with false claims by House Speaker Nancy Pelosi (D-Calif.) that the new health care law would create jobs,  ”400,000 of them almost immediately.” That 800,000 lost jobs “is 50% more than all the people who work for GM, Ford, and Chrysler combined,” yet the Congressional Budget Office regards it as a “small amount” compared to the overall labor force.  To some people, the glass is always half full.

As we discussed earlier, it was the Congressional Budget Office’s own report that showed that Obamacare discourages work and thus shrinks the economy.  Obamacare was so poorly drafted that some people are massively punished for working and earning more.  One hypothetical 62-year old lost $7,836 in tax credits for a $22 increase in income, resulting in a 35,618 percent marginal tax rate on that additional income.  Who would work longer hours, or seek to earn more, if they end up with less take-home pay at an income of $55,000 than $46,000 — as is true for some people under Obamacare?

As noted earlier, the new healthcare law raises taxes on the middle-class and investors,  reduces lifesaving medical innovation, and drives up health insurance premiums.  It also will bankrupt many “small to midsize” medical-device manufacturers, driving up unemployment.

Even the Congressional Budget Office, which allowed supporters of Obamacare to hide its costs through gimmicks and dodges, admitted last “Friday that Obamacare includes work disincentives likely to shrink the amount of labor used in the economy.”  For example, it effectively creates a 35,618 percent marginal tax rate for one hypothetical 62-year-old whose income rises by $22, by triggering the sudden loss of $7,836 in government tax credits (as Ted Frank explains below).

As a newspaper columnist notes,

The new health law will give some older households without access to employer care a big incentive not to earn too much. That’s because earning more than 400% of the poverty level would make them ineligible for subsidies that may be well in excess of $10,000 for couples.  Consider this example of a single individual age 62 in a high-cost area and no access to employer care. According to the Kaiser Family Foundation’s Health Reform Subsidy Calculator … [a]t 400% of the poverty level, or $46,000, an individual would get $7,830 in premium subsidies.  And at 401% of the poverty level, an individual would get no government support.

Or, as legal commentator Ted Frank notes, under Obamacare,

[A] 62-year-old in a high-cost area earning $46,000 a year without health insurance is entitled to a $7,836 government tax credit. Leaving aside how our strapped government can afford that, here’s what’s interesting: if the same person makes a mistake and earns an extra $22 in income, he loses the entire $7,836 credit. (The cutoff, according to Kaiser, is between $46,021 and $46,022.) That’s a 35,618% marginal tax rate. Indeed, the problem is so severe that our 62-year-old subject will have more take-home pay if he earns $46,000 than if he earns $55,000. And even at lower income levels, there is as much as a 16% surcharge on income at the margin.

This penalty for working and earning more is the result of really lousy drafting on the part of the authors of Obamacare. They could easily have avoided this problem by gradually phasing out the premium subsidies and tax credits, the way the tax code gradually phases out personal exemptions and itemized deductions for people who make well over $100,000 a year.  But they were too arrogant to learn anything from existing provisions that worked.

As noted earlier, the healthcare law imposes many middle-class tax increases, such as on cosmetic surgery and medical devices, and it increases taxes in future years on investors.  Obamacare will also reduce lifesaving medical innovation, break many campaign promises, and increase state budget deficits. It is driving up health insurance premiums, and it imposes restrictions that failed when tried at the state level. It ignores advice from doctors and federal experts, and lessons from countries with universal health care, about how to reduce costs.

In The Washington Times, Dr. Milton R. Wolf debunks six “unkeepable Obamacare promises” that have already been shown to be false.  For example, President Obama promised that his health care overhaul would not raise taxes on anyone earning less than $250,000 a year: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

But as Wolf notes, Obamacare’s “new excise taxes on pharmaceuticals and medical products will, of course, by necessity be passed on to the patients who depend on these lifesaving medicines, pacemakers, MRI machines or even tongue depressors.”  And Nancy Pelosi promised that Obamacare would create 4 million new jobs, 400,000 almost immediately, none of which ever materialized.

A political commentator notes that her family’s insurance premiums just went up by 45 percent, while the coverage became worse. One of her readers lost her insurance, after her family’s policy was canceled by the insurer due to Obamacare’s legal prohibitions.

We earlier discussed how Obamacare will create pointless red tape and busywork for doctors, and how it has already led to big premium increases, and the elimination of some popular health plans.  It also includes a $60 billion insurance excise tax that will be passed on to patients, and tax increases on some investors and homeowners starting in 2013.