Affordable Care Act

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.

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Debate over the constitutionality of the massive health care law passed in 2010 has focused on its “individual mandate”: the requirement that individuals buy health insurance, a requirement that the law’s defenders claim is authorized by Congress’s power to regulate interstate commerce. (I took issue with that argument here.)

But the individual mandate is not the only provision in Obamacare that violates the Constitution. It also violates the Tenth Amendment and limits on Congressional power under the Constitution’s Spending Clause, through its huge expansion of Medicaid, which imposes unfunded mandates on state governments. Florida and other states argue that Obamacare’s Medicaid expansion provisions are unconstitutionally coercive in violation of the Tenth Amendment under the principles laid down by the Supreme Court’s decisions in United States v. Butler (1936) and South Dakota v. Dole (1987).

On May 11, I filed an amicus brief in support of Florida’s challenge on behalf of a majority of Minnesota’s State House of Representatives and the leaders of the North Carolina and Minnesota legislatures. That brief explains how the health care law violates the “clear statement” rule in the Supreme Court’s Pennhurst decision by imposing vague, indefinite, open-ended additional burdens on states, including massive, unpredictable costs in the billions of dollars. Federal officials have issued over a thousand waivers of burdensome rules imposed by Obamacare, mostly to unions or other entities with political connections.  Meanwhile, HHS officials have vastly expanded the reach of other burdensome provisions of the law. For example, they have largely nullified the law’s grandfather clause, which was put into the law to keep Obama’s broken promise to let you keep your existing health insurance if you like it. They also issued a rule rewarding end-of-life counseling, even though such a provision was removed from the bill prior to passage after the so-called “death panels” controversy.

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The cost of Obamacare continues to explode and exceed its sponsors’ predictions. HHS Secretary Kathleen Sebelius has now admitted to double-counting in the Obamacare budget, using the same $500 billion twice, first “to sustain” the existing Medicare program and then to “pay for” brand new Obamacare entitlements. Last year, the CBO hiked its estimate of Obamacare’s costs by $115 billion, even as many of its promised benefits failed to materialize.

Obamacare was supposed to save patients money by curbing insurance company profits and expanding state Medicaid programs to cover millions more people. (This expansion was criticized by state officials, including a few Democrats such as former Tennessee Gov. Phil Bredesen, who called it “the mother of all unfunded mandates.” Bredesen’s health care legal advisor concluded that Obamacare’s Medicaid-expansion provisions were unconstitutional.)

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PolitiFact, which earlier took Obama’s side about whether Obamacare is a government takeover of  health care, now is criticizing President Obama for making false claims about health care and taxes. In a pre–Super Bowl interview with Bill O’Reilly, Obama made the false claim that 12 judges have rejected “the notion that the health care law was unconstitutional.” As PolitiFact notes, only “four judges have ruled on the merits of various cases challenging the health care law. Two ruled in favor of the administration and two against.” (Earlier, we explained why the recent ruling by a Florida judge striking down Obamacare was not judicial activism.)

Obama’s problem with numbers isn’t new; during the 2008 campaign, he claimed that he had been to “57 states.” So he may not have been deliberately lying about this.

But as John Kartch noted earlier, Obama made a far more flagrantly false claim when he insisted to Bill O’Reilly that “I didn’t raise taxes once” while president. It’s hard to view that claim as anything other than a lie. Obama has signed into law a long list of tax increases on consumers and investors, which Kartch lists here. That includes “two dozen new or higher taxes” just in the health care law alone.

Some of the biggest of Obama’s tax increases haven’t gone into effect yet, and won’t go into effect until after the 2012 election, such as the new 3.8 percent tax it levies on many of America’s investors. As PolitiFact noted in debunking Obama’s claim that he hadn’t raised taxes, “starting in 2013,” “Individuals who make more than $200,000 and couples that make more than $250,000 will see additional Medicare taxes of 0.9 percent. They will also, for the first time, have to pay Medicare taxes on their investment income at a 3.8 percent rate.”

By contrast, an excise tax increase Obama signed in 2009 went into effect “soon after” he took “office,” and some of the tax increases in the health-care law that affect middle-class patients and medical-device manufacturers are already in effect.

For the moment, Americans’ taxes are not that high, because many of the tax increases already signed into law have yet to kick in. But appearances are deceiving, for as Kartch notes, “100% of the tax increases Obama signed into law are … permanent,” while “over 90% of the dollar value of the tax cuts Obama signed into law are only temporary.”

I earlier discussed why PolitiFact was wrong to accept the Obama administration’s claim that Obamacare was not a government takeover of the health care system.

While it dramatically increases regulation and red tape, Obamacare 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. Obamacare contains provisions that are harmful to the economy and medical innovation. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

On Monday, a federal judge in Florida struck down Obamacare as unconstitutional. Judge Vinson concluded that the law’s cornerstone — a requirement that individuals buy health insurance — exceeded Congress’s power under the Interstate Commerce Clause, and Supreme Court rulings such as United States v. Morrison that limit that power to the regulation of “economic activities,” not inactivity like refusals to buy a product. He struck down the entire law, not just the individual mandate. He did this for two reasons. First, the law lacked a severability clause (a clause declaring that any unconstitutional provision should be severed from the law rather than striking down the law as a whole), even though such clauses are typically found in federal laws. Second, the individual mandate couldn’t logically be severed from the rest of the law, since Congress deemed it essential to the law’s overarching goals, and it was intertwined with the law’s other provisions.

Liberal commentators are up in arms about the decision in Florida v. HHS, to the point of hurling angry falsehoods about it. Writing in the Washington Post, Ezra Klein even claimed that the judge admitted his own ruling was wrong: “Vinson concedes that his position is activist in the extreme and a break from the court’s usual preference for limited rulings. . .”

The judge admitted nothing of the kind. As as a prominent lawyer notes, “Klein just made that up.”

There is nothing unprecedented about striking down an entire law that contains an unconstitutional provision, even when the law — unlike Obamacare — contains a severability clause designed to prevent that from happening.  (Here are some rulings in which courts, including the Supreme Court, did just that: See, e.g., Thornburgh v. American College of Obstetricians & Gynecologists, 476 U.S. 747, 764–65 (1986); Carter v. Carter Coal Co., 298 U.S. 238 (1936); American Booksellers v. Hudnut, 771 F.2d 323, 332 (7th Cir. 1985), aff’d, 475 U.S. 1001 (1986); EEOC v. CBS, 743 F.2d 969, 973 (2d Cir. 1984); and Hotel Employees v. Davis, 981 P.2d 990, 1010 (Cal. 1999).)

And Obamacare lacked a severability clause, which was an additional reason to strike down the whole law. Klein ignored the fact that “the Democrats omitted a severability clause from the health care reform statute” for a reason. Judge Vinson pointed out the importance of the absence of such a provision:

The lack of a severability clause in this case is significant because one had been included in an earlier version of the Act, but it was removed in the bill that subsequently became law.  . . . the severability clause was intentionally left out of the Act. The absence of a severability clause is further significant because the individual mandate was controversial all during the progress of the legislation and Congress was undoubtedly well aware that legal challenges were coming. . . even before the Act became law, several states had passed statutes declaring the individual mandate unconstitutional and purporting to exempt their residents from it; and Congress’ own attorneys in the CRS had basically advised that the challenges might well have legal merit as it was “unclear” if the individual mandate had “solid constitutional foundation.” . . . In light of the foregoing, Congress’ failure to include a severability clause in the Act (or, more accurately, its decision to not include one that had been included earlier) can be viewed as strong evidence that Congress recognized the Act could not operate as intended without the individual mandate.

As Judge Vinson observed, the government’s own lawyers admitted that the statute’s entire scheme of insurance regulation would fall without the individual mandate, cutting against severability:

Moreover, the defendants have conceded that the Act’s health insurance reforms cannot survive without the individual mandate, which is extremely significant because the various insurance provisions, in turn, are the very heart of the Act itself.

Earlier, a judge in Virginia declared Obamacare’s individual mandate unconstitutional, but declined to strike down the rest of the law, in Virginia v. Sebelius.

As I noted in discussing the Virginia ruling in The Washington Examiner: “To justify preserving the rest of the law, the judge” in the Virginia case “cited a 2010 Supreme Court ruling,”Free Enterprise Fund v. PCAOB, “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. . .” In short, Obamacare’s individual mandate is not “volitionally severable,” as case law requires.

Moreover, the individual mandate is not the only provision in Obamacare that violates the Constitution (although it was the only violation found by Judge Vinson). In my amicus brief in the Florida case for Governors Tim Pawlenty and Donald L. Carcieri, I explained how Obamacare’s Medicaid impositions violate the Tenth Amendment by ignoring constraints on Congress’s power under the Spending Clause (a so-called Pennhurst argument.)

Regardless of whether it is constitutional, Obamacare is also harmful to the economy, medical innovation, and the healthcare system. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

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 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.

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.

Obamacare has just led to a 47 percent increase in some health insurance premium rates in Connecticut:

The state’s largest insurer has been approved to raise health premium rates by 41 percent to 47 percent for some of its policies sold to individual buyers, in the largest price hikes yet seen in Connecticut since the adoption of national health care reform… The reason for the increases is the new federal health reform mandates, according to Anthem and the state Department of Insurance.

This is the exact opposite of what Americans were promised by the sponsors of Obamacare, which was deceptively billed as the Affordable Care Act.

Earlier, a judge in Florida refused to dismiss a constitutional challenge to Obamacare.

Obamacare includes major tax increases such as new taxes on investors and a $60 billion excise tax on health insurers that will be passed on to consumers.  It has already resulted in higher costs for major employers, and the elimination of high-quality health care plans. Insurance regulators in Connecticut had previously approved other premium increases.

The higher costs of Obamacare are one factor in why employers are reluctant to hire. Last month, 95,000 jobs disappeared as more jobs were eliminated than created in the American economy.