John Roberts, James Joyce, the individual mandate, Medicaid Estate Recovery, and "affordable" care

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A good book about Ireland's history since 1958, Fintan O'Toole's We Don't Know Ourselves: A Personal History of Modern Ireland led me to a second attempt at James Joyce's Ulysses, which I stalled out on decades ago, somewhere after Leopold Bloom emerges from an outhouse. Further I plod. One thing I will say for Joyce's internal babble is it does make you somewhat more mindful -- inclined to track your own perceptions and fleeting thoughts. 

So it was that I caught one lightning round of associations at lunchtime today:

--  John Roberts -- trying to moderate Roe strike-down?

-- Roberts -- headed off one radical conservative decision by saving the ACA's individual mandate "as a tax." 

Last laugh for Republicans in the SCOTUS session that was

Democrats were still in their happy dance over Supreme Court decisions preserving ACA subsidies and legalizing gay marriage throughout the U.S. when, in its final orders of the year, the Court agreed to hear cases poised to gut pubic unions and affirmative action.

In Friedrichs v. California Teachers Association, ten California teachers are challenging a requirement that they pay fees to the teachers union for nonpolitical services, chiefly collective bargaining. That's the type of provision that Scott Walker killed in Wisconsin; without it, pubic sector unions wither. As Mark Joseph Stern at Slate points out, "there is virtually no chance" that the Supreme Court will rule against the teachers:

My call on King

I hope I don't end up thrashing myself for wishful thinking, but I think the Supreme Court will rule for the government in King -- no odds on whether it's Chevron deference (the law is ambiguous, and the IRS interpretation is reasonable) or that the law's intent to provide subsidies to all states is unambiguous. I would hope that my bias -- I think the case is a fraud -- is balanced by superstition --an unwillingness to predict what I wish (overridden by being asked, as part of a list).

I can't wrap my mind around both Roberts and Kennedy agreeing to a) blow up the economy and b) credit the plaintiffs' bogus narrative that Congress intended a form of coercion that no one recognized and that the law does not spell out (a state only gets premium subsidies if it establishes its own exchange).  On both counts I take some reassurance from the dissent as well as the majority opinion in NFIB v. Sebelius, the challenge to the ACA's constitutionality ruled on in 2012.

The dissent in that case shows both thorough awareness of the interdependence of the ACA's core provisions and a wariness of causing massive economic disruption:

SCOTUS: Federal government can't *deny* subsidies to refusenik states?

Yesterday, I suggested that if the conservative justices of the Supreme Court wanted to uphold the D.C. ruling in Halbig, denying the federal government the right to provide subsidies to people who buy health insurance on  healthcare.gov, they might deflect reluctance to upend the law by recourse to states' rights. That is, Roberts in particular  might actually approve on principle leaving it up to the states whether to fund subsidies offered on the ACA exchanges, as he did with respect to the Medicaid expansion. By email, TNR's Brian Beutler responded:

Here's a fun thought. What if Roberts determines that an unambiguous reading of the statute denies subsidies to states that do not set up their own exchanges, but that this constitutes YET ANOTHER unconstitutional exercise of the spending power, a la the Medicaid expansion, and that the subsidies must flow everywhere.

Could the ACA exchanges go the way of the Medicaid expansion?

If the D.C. Circuit panel ruling in Halbig stands, and the state exchanges currently run by the federal government are deemed unable to grant subsidies to health plan buyers who qualify for them under the ACA's criteria, Nicholas Bagley posits that "the states with federally established exchanges will come under enormous pressure to establish their own exchanges." The federal government could make it easy for them, Bagley suggests, essentially allowing them to decree that they've "established" exchanges while letting Healthcare.gov continue to run them.  Thus the ACA would likely prove indelible after all:

True, not every state would accept the invitation to establish its own exchange, even if doing so were more or less a formality. But lots of states would, especially as voters started to howl about losing their tax credits. If so, even a bad outcome in Halbig might not matter that much in the end.

That quasi-forecast recalls the argument that all states will ultimately come round to accepting the ACA Medicaid expansion, albeit in their own sweet time (Arizona, the last state to implement Medicaid itself, did so 17 years after Congress established the program).

While this thought might be expected to soothe ACA proponents, for me it had the opposite effect. The Medicaid scenario might provide cover for the Supreme Court to uphold the D.C. Circuit panel in Halbig.

When Chief Justice John Roberts held in June 2012 that the ACA's individual mandate exceeded Congress's power under the Commerce Clause but was a legitimate exercise of Congress's taxing power, he justified the recourse to "the Government's alternative argument" by citing SCOTUS precedent that “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” He would not thwart Congress's intent by destroying the law's ability to function if he could avoid it.

He showed no such reluctance, however, with regard to the ACA's requirement that states expand Medicaid eligibility to a new class of beneficiaries or else stand to lose federal funding for their existing Medicaid programs. He deemed that requirement coercive, and was joined by six other justices in striking the requirement down and making the Medicaid expansion voluntary for the states.

ICYRMI: Six online classics of 21st century history

"ICYMI" generally refers to something written a day or a week ago.  In recent days, I've had recourse several times to Michael Hastings' deeply reported 2012 reconstruction of Bowe Bendahl's upbringing, inner life and military career -- as well as of the negotiations for his release. It would be a mistake to suggest that everything most of us are learning now about Bendahl is in that story, but my sense is that 80 percent of it is.

That set me thinking this morning about other articles, written years ago but still online, that made a strong impression on me and that still resonate. Here's a short "in case your really missed it" list.

America's Sicilian Expedition: in the runup to the 2003 U.S. invasion of Iraq, pundits and scholars analogized the impending war to every conflict in American history, with the possible exception of the War of 1812. Some went further afield. One that struck me as a bit outlandish at the time was historian Simon Schama's essay raising the specter of ancient Athens' disastrous exercise in imperial overreach:

How binding is Justice Roberts' finding that the ACA's individual mandate exceeds Congress's Commerce Clause authority? - update

Last July, I posed the question in the title in the post below, prompting a bit of a lawyer's debate in the comments. Ratman, an acute critic of the reasoning accepted by Chief Justice Roberts on this question, has just rejoined that debate after a nine month hiatus-- prompting me to wonder whether the question has been addressed in legal literature.

So, attorneys: What do you think of Ratman's argument below?  Has "the Supreme Court ruled" that Congress can't regulate inactivity, or can't mandate a purchase in the unique case posed by insurance?

A quick question of law
Thursday, July 05, 2012

How many of Chief Justice Roberts' brethren signed onto his finding that "the individual mandate is not a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause"?  None.

Justice Ginsburg, writing for the four liberal justices with regard to the mandate, concurred with Roberts' finding that the mandate was a constitutional exercise of Congress's taxing power, but dissented strongly on the Commerce Clause question. Justices Alito, Kennedy, Scalia and Thomas officially concurred with no part of Roberts' decision, though their reasoning with regard to the Commerce Clause mirrored his.  And of course, the Chief Justice's own finding that the mandate is constitutional rendered his Commerce Clause judgment moot with respect to the fate of the individual mandate.

A question, then, for legal scholars: does the finding that Congress cannot regulate inactivity have any force of law for future cases?

Does the Affordable Care Act "soak the young"?

Avik Roy revives the complaint that formed the emotional core of the legal case against the Affordable Care Act: that the act shafts young adults by forcing them to buy coverage that effectively subsidizes insurance for older adults. Here's the basis of his complaint:

Under free-market conditions—what insurance pros call experience rating—the typical 18-year-old costs one-sixth what it costs to insure the typical 64-year-old.

But Obamacare, in a sop to the AARP, requires that insurers only charge three times as much to their costliest beneficiaries what they charge to their least-costly ones. As the illustration below shows, this increases the cost of insurance for the young by 75 percent, while offering only a modest 13 percent subsidy to older Americans.

Before moving on to the core alleged problem, let's note a couple of sleights of hand at the outset:

The only adult in the (Heritage Foundation) room

Perhaps Donald Verrilli did not have the smoothest delivery in the Court on March 27, when he defended the constitutionality of the individual mandate.  But in this Heritage Foundation panel discussion, as reported by Josh Gerstein, he seems on a different moral plane entirely from plaintiff's attorney Michael Carvin and libertarian U. of Chicago Professor Richard Epstein:

A quick question of law

How many of Chief Justice Roberts' brethren signed onto his finding that "the individual mandate is not a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause"?  None.

Justice Ginsburg, writing for the four liberal justices with regard to the mandate, concurred with Roberts' finding that the mandate was a constitutional exercise of Congress's taxing power, but dissented strongly on the Commerce Clause question. Justices Alito, Kennedy, Scalia and Thomas officially concurred with no part of Roberts' decision, though their reasoning with regard to the Commerce Clause mirrored his.  And of course, the Chief Justice's own finding that the mandate is constitutional rendered his Commerce Clause judgment moot with respect to the fate of the individual mandate.

A question, then, for legal scholars: does the finding that Congress cannot regulate inactivity have any force of law for future cases?

Justice Roberts spares the country's pound of flesh

I had deja vu as I read John Roberts' decision deeming the individual mandate both an impermissible exercise of Congress's Commerce Clause power and a constitutional exercise of its taxing power.  I was taken back to Shakespeare's court of Venice:

PORTIA
A pound of that same merchant's flesh is thine:
The court awards it, and the law doth give it.

SHYLOCK
Most rightful judge!

PORTIA
And you must cut this flesh from off his breast:
The law allows it, and the court awards it.

SHYLOCK
Most learned judge! A sentence! Come, prepare!

PORTIA
Tarry a little; there is something else.
This bond doth give thee here no jot of blood;
The words expressly are 'a pound of flesh:'
Take then thy bond, take thou thy pound of flesh;
But, in the cutting it, if thou dost shed
One drop of Christian blood, thy lands and goods
Are, by the laws of Venice, confiscate
Unto the state of Venice.

GRATIANO
O upright judge! (Merchant of Venice IV. 1. 298-312).

Broccoli-robbed! The Wall Street Journal's beef with John Roberts

In the wake of Chief Justice John Roberts' division of the mandate baby, the Wall Street Journal editorial board laments:

From now on, Congress can simply regulate interstate commerce by imposing "taxes" whenever someone does or does not do something contrary to its desires.

That's true!  Also on target is the editorialists' complaint against Roberts' sleight-of-hand (which I noted myself on Saturday):

[Roberts] also temporizes that "taxes that seek to influence conduct are nothing new."

True enough, but the punishments in the tax code for inactivity come in the form of not being able to claim benefits that Congress in its graces bestows. Such as: If you don't borrow to buy a home, you don't get a mortgage interest deduction.

Congress has never passed a tax on a lack of gasoline or a tax on a failure to buy gasoline, any more than Congress can regulate inactivity under the Commerce Clause by telling people to buy gasoline or else pay a penalty.

 This reality-based analysis, however, serves a fantasy:

The reality is that Washington would love to regulate the ordinary economic choices that used to be beyond its purview, and now it will be able to abuse the ad hoc "tax" permit that the Chief Justice has given it.

A radical departure? Congress can tax inactivity

There is a mystery to John Roberts' opinion upholding the mandate under Congress's taxing power while ruling it an unconstitutional exercise of Congress's Commerce Clause power.  With regard to the Commerce Clause, Roberts adopted wholesale the plaintiffs' argument that it's a radical and dangerous departure for Congress to "create" commerce or "compel" inactivity.  Yet Roberts finds that Congress does have the power to tax inactivity, notwithstanding that none the precedents he cites as support for upholding the penalty for not buying insurance do tax inactivity. He is up-front about this apparent paradox:

There may, however, be a more fundamental objection to a tax on those who lack health insurance. Even if only a tax, the payment under §5000A(b) remains a burden that the Federal Government imposes for an omission, not an act. If it is troubling to interpret the Commerce Clause as authorizing Congress to regulate those who abstain from commerce, perhaps it should be similarly troubling to permit Congress to impose a tax for not doing something (p. 41).

To what extent did SCOTUS inhibit Congress's power to regulate commerce?

Yesterday, I suggested that the Supreme Court's finding that the individual mandate exceeded Congress's Commerce Clause powers did not in fact crimp Congress's ability to regulate commerce in any significant way, since Congress has no desire to impose any more purchase mandates. Donald Verrilli stressed in his reply brief that health insurance is a unique case, pointing out that states, which have an unquestioned power to impose purchase mandates, don't do it. Justice Ginsburg made the same point in exquisite detail in her dissent with regard to the Commerce Clause.

In today's Times, however, Neal Katyal, who served as acting Solicitor General after Obama appointed Elena Kagan to the Supreme Court and who argued the ACA case at the appellate level, makes a compelling case that the decision did limit the federal government's power and expand the Court's propensity to legislate from the bench in significant ways. Chief among them was in its invalidation of Congress's power to enforce its expanded Medicaid mandate:

The day American democracy died?

Here's a news snippet, as excerpted in Mike Allen's Playbook, that perhaps lays bare the arc of U.S. history since 1980. And it doesn't bend toward justice:

NINE-FIGURE DONATION TO ROMNEY? "Adelson's Pro-Romney Donations Will Be 'Limitless,' Could Top $100M," by Forbes' Steven Bertoni : "Sheldon Adelson, along with his wife Miriam, ... donated $10 million to the leading Super PAC supporting ... Mitt Romney-and that's just the tip of the iceberg. A well-placed source in the Adelson camp with direct knowledge of the casino billionaire's thinking says that further donations will be 'limitless.' Adelson, who has built Las Vegas Sands into an global casino empire, will do 'whatever it takes' to defeat Obama, this source says. And given that Adelson is worth $24.9 billion-and told Forbes in a recent rare interview about his political giving that he had been willing to donate as much as $100 million to his initial presidential preference, Newt Gingrich-that 'limitless' description telegraphs potential nine-digit support of Romney." http://onforb.es/KpzkDk

The "arc" has been sculpted by Republican-appointed Supreme Court justices who, beholden to an ideology that admits no distinction between money and speech, have literally sold American democracy down the river to the GOP's corporate and megarich individual backers.

Misrepresentation of the mandate in the Supreme Court: why it still matters

I have made the case below piecemeal, across many posts. This is an attempt to make it as succinctly and completely as possible.
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In his oral argument against the constitutionality of the ACA's individual mandate on March 27, plaintiff's counsel Michael Carvin asserted, "Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance" (p. 105).

That is not true -- the ACA provides the catastrophic coverage option for others exempt from the mandate, e.g. on grounds of financial hardship. And that factual error signals a greater distortion, one that was not countered and apparently made a major impression on Justices Alito, Roberts and Scalia: that the mandate forces Americans to buy coverage greatly in excess of what's required to offset the cost of catastrophic care for those lacking health insurance. No one pointed out that a) the ACA provides a catastrophic coverage option for those under 30; b) that it extends that option to others exempt from the mandate on financial or other grounds; or c) that the bronze plans offered in the exchanges, as the Kaiser Family Foundation recently detailed, might also reasonably be labeled "catastrophic" coverage.

It seems to me that a) the justices were misled on this potentially crucial point, and b) Kennedy and/or another might still be convinced, if not to accept the mandate as constructed, to divide the baby by further limiting it -- as Marty Lederman suggested they might:

Attention, Justices Kennedy, Roberts et al: read the young people's brief

Of the 79 amicus briefs filed with the Supreme Court on the question of the constitutionality of the individual mandate in the Affordable Care Act, arguably the one most directly germane to the main thrust of oral argument on 3/27 was a brief filed by a coalition of 20 youth organizations calling itself, with pointed irony, the Young Invincibles. Did the justices read the damn thing? The evidence from oral argument suggests not.

For all the legal intricacies regarding what kinds of regulation come within the scope of the Commerce Clause and the Necessary and Proper Clause in the Constitution, oral argument centered largely on a morality tale spun by the plaintiffs. In this tale, the main characters were hoards of healthy young adults being forced to buy more coverage than they need in order to subsidize the coverage of older adults.  The key verbs, deployed relentlessly in the plaintiffs' briefs and testimony, were force, conscript, compel, and commandeer.  Free, strong, savvy young Americans were being robbed of their ability to assess risk, drive bargains, and buy precisely the amount of risk transfer that their robust condition required. The ACA is structured "to compel the uninsured into engaging in economic activity that is harmful for them" (Carvin brief, p. 1).

Several of the justices appear to have swallowed it hook line and sinker. Alito, Roberts and Scalia buzz-sawed Solicitor General Donald Verrilli with serial restatements of it. Verrilli did point out that young people will a) become old, and b) sometimes, unpredictably, need catastrophic care.  Yet he did not bring to bear these facts: that young people overwhelmingly want health insurance; that they are disproportionately uninsured and underinsured; that their lack of health insurance causes them bodily and and economic harm; and that the ACA makes insurance affordable, not unaffordable or unduly expensive, for them.

The Young Invincibles brief articulates and documents all of these basic and readily available facts. (To these I would add that far from mandating unnecessary "Cadillac" coverage as the plaintiffs aver, the ACA provides, perhaps to a fault, a range cheap, stripped-down coverage options, including catastrophic coverage, that limit the scope of the mandate.) Some highlights:

The ACA offers catastrophic coverage: the AP notices!

For almost two weeks, I have been beating a drum, waving a flag, screaming from the bleachers that justices Alito, Roberts and Scalia seemed unaware of a fundamental feature of the Affordable Care Act (and were not disabused during oral argument on 3/27): the ACA has a catastrophic coverage option.  All three seemed convinced that the mandate requires individuals to buy more coverage than many people will ever need, such as substance abuse treatment, and that the young were being exploited as "golden geese" to subsidize the cost of covering older citizens.

My focus was on provisions in the ACA, Section 1302 (e), allowing those under 30 and others who could show financial hardship to buy purely catastrophic coverage. Now, the AP's Ricardo Alonso-Zaldivar is out with a story* citing several experts who assert that the bronze plans to be offered in the insurance exchanges, available to all, are also essentially catastrophic coverage plans -- though that definition is contested. Those calling it catastrophic focus mainly on the percentage of costs covered:

Attention Alito, Roberts, Scalia: the ACA has a catastrophic coverage option

Excuse the (edited) repost: I think the info below is important (see also 4/5 update - Marty Lederman raises the possibility of a more limited mandate; 4/10 update - the AP weighs in; 4/12 update, the mandate as self-limiting principle; and 4/20 update - response to Jon Cohn). If I'm missing something, please let me know:
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Attention, Justices Roberts, Alito, Scalia: your objection to the extent of the individual mandate in the ACA may be based on at a partial misunderstanding. Or at least, on a failure by Solicitor General Donald Verrilli and the four justices supportive of the ACA to highlight an important provision of the law. That is:  the Affordable Care Act includes a catastrophic coverage option for people under thirty and others who meet certain financial requirements.

In questioning the right of the Federal government to require individuals to buy insurance, the justices glided past the argument that the requirement was justified because the cost of care for the uninsured drives up the cost of health care for everyone -- that we are all in the health care market -- by asserting that not everyone in the market needs the range of services that policies offered in the insurance exchanges are required to cover. This objection was hammered repeatedly, in a variety of ways, by Roberts, Alito and Scalia, and by Michael Carvin arguing for the plaintiffs.  Here's the first such assertion in the transcript:

JUSTICE ALITO: But isn't that really a small part of what the mandate is doing? You can correct me if these figures are wrong, but it appears to me that the CBO has estimated that the average premium for a single insurance policy in the non-group market would be roughly $5,800 in -- in 2016.

Respondents -- the economists who have supported the Respondents estimate that a young, healthy individual targeted by the mandate on average consumes about $854 in health services each year. So the mandate is forcing these people to provide a huge subsidy to the insurance companies for other purposes that the Act wishes to serve, but isn't -- if those figures are right, isn't it the case that what this mandate is really doing is not requiring the people who are subject to it to pay for the services that they are going to consume? It is requiring them to subsidize services that will be received by somebody else.

And Roberts, broadening the objection:

CHIEF JUSTICE ROBERTS: Well, but it's critical how you define the market. If I understand the law, the policies that you're requiring people to purchase involve -- must contain provision for maternity and newborn care, pediatric services, and substance use treatment. It seems to me that you cannot say that everybody is going to need substance use treatment -substance use treatment or pediatric services, and yet that is part of what you require them to purchase (pp 31-32).

And Scalia, following up a couple of minutes later:

Go tell the justices: the ACA has a catastrophic coverage option

Attention, Justices Roberts, Alito, Scalia: your objection to the extent of the individual mandate in the ACA may be based on at a partial misunderstanding. Or at least, on a failure by Solicitor General Donald Verrilli and the four justices supportive of the ACA to highlight an important provision of the law.

In questioning the right of the Federal government to require individuals to buy insurance, the justices glided past the argument that the requirement was justified because the cost of care for the uninsured drives up the cost of health care for everyone -- that we are all in the health care market -- by asserting that not everyone in the market needs the range of services that policies offered in the insurance exchanges are required to cover. This objection was hammered repeatedly, in a variety of ways, by Roberts, Alito and Scalia, and by Michael Carvin arguing for the plaintiffs.  Here's the first such assertion in the transcript:

JUSTICE ALITO: But isn't that really a small part of what the mandate is doing? You can correct me if these figures are wrong, but it appears to me that the CBO has estimated that the average premium for a single insurance policy in the non-group market would be roughly $5,800 in -- in 2016.

Respondents -- the economists who have supported the Respondents estimate that a young, healthy individual targeted by the mandate on average consumes about $854 in health services each year. So the mandate is forcing these people to provide a huge subsidy to the insurance companies for other purposes that the Act wishes to serve, but isn't -- if those figures are right, isn't it the case that what this mandate is really doing is not requiring the people who are subject to it to pay for the services that they are going to consume? It is requiring them to subsidize services that will be received by somebody else.

And Roberts, broadening the objection:

CHIEF JUSTICE ROBERTS: Well, but it's critical how you define the market. If I understand the law, the policies that you're requiring people to purchase involve -- must contain provision for maternity and newborn care, pediatric services, and substance use treatment. It seems to me that you cannot say that everybody is going to need substance use treatment -substance use treatment or pediatric services, and yet that is part of what you require them to purchase (pp 31-32).

And Scalia, following up a couple of minutes later: