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Posts Tagged ‘Health Care Reform’

The U.S. Supreme Court has decided to accept one of the appeals addressing President Obama’s health care statute, and thereby has set the stage for one of the most anticipated legal rulings in years.

In its order accepting the case, the Supreme Court identified four issues for the parties to brief and set aside five-and-a-half hours for oral argument.  Five and a half hours!  It’s an extraordinary amount of time, but why not?  The issues presented are titanic and unprecedented and could have far-reaching consequences.  Can the federal government require everyone to buy insurance?  If not, should the entire statute fall?  Should the Supreme Court even decide those issues on their merits, or should it wait for the law to be fully implemented?

Many people will focus on the political impact of any Supreme Court ruling on the health care statute, but I think the legal issues are of the most interest.  In many ways, the statute tests the outer limits of Congress’ power under our Constitution — if in fact there are any limits left.  The Supreme Court may well decide that issue come June.

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It is looking increasingly likely that Supreme Court will hear an appeal of the ever-controversial “health care reform” law, and soon.

Both sides to a lawsuit — the Department of Justice in favor of the law, and 26 states and the National Federation of Independent Businesses in opposition — have asked the Court to accept an appeal and decide whether the law should be upheld or struck down as unconstitutional.  The Supreme Court has the discretion to decline the appeal, but the fact that the appellate court declared the law unconstitutional, and the fact that both sides to the case are seeking review, should increase the chances the high court will hear the case.

Stripped of its partisan baggage, the appeal poses a fascinating legal issue:  how far does Congress’ power to regulate interstate commerce extend?  In prior cases, the Court has articulated an expansive view of that power.  However, opponents of the new law argue that this case is different because Congress — through the “individual mandate” provision that requires all citizens to buy health insurance — is for the first time assuming the power to compel unwilling citizens to engage in commerce.  Proponents of the law respond that, when it comes to health care, every living American is already affecting commerce, because those who don’t have insurance and then need health care are imposing economic burdens on the rest of us.  A Supreme Court decision on this issue would go a long way toward defining, once and for all, the full extent of Congress’ power to regulate the daily lives of Americans.

If the Supreme Court takes the appeal, it would be likely to rule in the summer of 2012 — just before a presidential election where the wisdom of the “health care reform” law is likely to be a very hot topic.  And the decision will come against the backdrop of a recent report that shows a sharp increase in health care costs, which undoubtedly will cause Republican candidates to blame the unpopular new law and redouble their attacks on it.

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The third part of the approach President Obama outlined in his fiscal policy speech on April 13 addressed health care costs.  He first contrasted his approach with his characterization of the Republican plan.  He said Republicans intended to reduce health care costs in the federal budget by “asking seniors and poor families” to pay the health care costs, whereas his approach would “lower[] the government’s health care bills by reducing the cost of health care itself.”

How to do so?  First, by reducing “wasteful subsidies and erroneous payments,” cutting “spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market,” and working with governors “to demand more efficiency and accountability from Medicaid.”  Next, the government will “change the way we pay for health care” with “new incentives for doctors and hospitals to prevent injuries and improve results.”  Finally, “we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.”  These initiatives, the President said, will save $500 billion over the next 12 years.  And if those savings don’t materialize, “then this approach will give the independent commission the authority to make additional savings by further improving Medicare.”

This part of the speech seems completely inconsistent with a prior part of the same speech.  The President earlier observed:  “So because all this spending is popular with both Republicans and Democrats alike, and because nobody wants to pay higher taxes, politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse.  You’ll hear that phrase a lot.  ‘We just need to eliminate waste and abuse.’  The implication is that tackling the deficit issue won’t require tough choices.”

The clear implication of that passage is that promising savings from eliminating “waste, fraud and abuse” is not a serious approach to solving budget problems.  Yet isn’t that all that the President’s health care approach does?  Look again at the President’s proposed approach, and you’ll see plans to eliminate “wasteful subsidies and erroneous payments” (end waste), to demand more “efficiency and accountability from Medicaid” (prevent fraud), and to “improve results” while “reducing unnecessary spending” (avoid abuse).  It’s as if the two parts of the speech were written by two different speechwriters — or as if President Obama thinks that, just because he is the one making the proposal, the tired “waste, fraud and abuse” mantra has actual validity this time.

So, again, I am left to wonder what this President actually believes.  Does he believe that a deficit reduction plan that focuses on eliminating purported “waste, fraud, and abuse” is really no plan at all?  Or, does he truly think there is $500 billion in waste, fraud and abuse to be wrung from our health care spending — and if that is the case, why has that waste, fraud, and abuse been allowed to continue unabated during the first two years of his Presidency?

While we are asking questions, another fair question is whether the President honestly thinks that there is any real value in blue-ribbon commissions, when the political landscape is littered with the reports of prior blue-ribbon commissions that have been happily ignored by those in power.  And if the President does think such commissions are a powerful answer to problems, why does he hold that belief when he has pretty much ignored the recommendations of the Bowles-Simpson budget commission that he himself appointed?

Who Is This Guy?  (The Defense Side)

Who Is This Guy?  (The Spending Side)

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One of the more troubling aspects of the “health care reform” legislation enacted into law last year has been the ability of companies and unions to get waivers that relieve them from having to comply with certain aspects of the law.  The waivers relate to provisions of the law that prevent plans from using high deductibles or low annual limits to control benefits.  Unfortunately, many plans need such provisions to manage costs; without those provisions, employers and unions would need to jettison their plans as unaffordable.

The Department of Health and Human Services may waive those provisions for certain employer and union plans.  The HHS website explains that, to be eligible for a waiver, the plan must certify “that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage” and must inform plan enrollees “that their plan does not meet the requirements of the Affordable Care Act.”  Whether to grant the requested waiver then seems to be entrusted to the discretion of the HHS and its Secretary, Kathleen Sebelius.  To date, 733 company and union plans, covering 2.1 million Americans, have received waivers.

This concept of “government by waiver” is troubling.  I’m skeptical of the claims of some conservatives, who believe that the waivers are being handed out as rewards for prior political support.  I do, however, question a process that allows unelected bureaucrats to grants waivers from a law that is supposed to apply to everyone.  The waiver process is symptomatic of the accumulation of power in the Department of Health and Human Services that seems to be the true hallmark of the “health care reform” legislation. If the law remains in force, Americans will need to get used to the idea that HHS will be making all kinds of decisions that have a direct impact on our health care.

In addition, what does it say about this hastily drafted, poorly considered law that more than 700 plans have certified that one of the law’s provisions will either vastly increase costs or cause coverage to be sharply curtailed?  Does anyone doubt that, if all American businesses had been aware of the possibility of obtaining waivers, that 700 number would have been multiplied by a significant factor?  It also is worth noting that the waivers aren’t limited to small, Mom and Pop plans.  To the contrary, some of the plans that have received waivers have hundreds of thousands of participants.  According to the HHS website, the plans that have received waivers include the United Federation of Teachers Welfare Fund (351,000 participants), CIGNA (265,000 participants), Aetna (209,000 participants), and BCS Insurance (115,000 participants).  Given these waivers, how can the proponents of the “health care reform” legislation continue to contend that the legislation will neither increase costs nor reduce coverage?  By granting the waivers, the bureaucrats at HHS are admitting that the exact opposite will occur if the law is enforced as written.

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The House of Representatives, now under Republican control, has passed legislation to repeal the “health care reform” legislation passed by the last Congress.  Democrats in the Senate, who control that chamber, are saying that repeal legislation will never come to the floor for a vote — and, of course, President Obama would be expected to veto any repeal legislation that would happen to reach his desk.

So, was the House vote a waste of time?  I don’t think so.  By voting to repeal the “health care reform” legislation, the Republican majority was fulfilling a campaign promise.  We should applaud politicians who do so, not condemn them.  The general public would have a more favorable view of politicians generally if more politicians actually tried to keep their promises.  By acting so promptly, the Republicans are demonstrating that elections have consequences.  And, of course, you never know whether political pressure will build on the Senate to consider some form of repeal legislation.  If Democrats in the Senate consider the legislation to be such a great success, why should they duck a vote on its proposed repeal?

Now that the Republicans in the House have met one of their promises, they need to turn to working on the others.  If I had a vote, I would urge them to focus on deficit reduction and a careful analysis of potential federal spending cuts.

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Today Kathleen Sebelius, the Secretary of the Department of Health and Human Services, released a report that concludes that up to half of all Americans below age 65 — 129 million in all — have some kind of “pre-existing condition” that might otherwise cause them to be denied health insurance coverage.  The report, which was released on the day the House of Representatives began debate on a bill to repeal the “health care reform” legislation, notes that under that legislation those individuals with “pre-existing conditions” cannot otherwise be denied coverage, or be charged significantly higher premiums.

HHS Secretary Kathleen Sebelius

As is the case so often these days, this report seems to be motivated almost entirely by political concerns — in this case, trying to make a case for retaining the “health care reform” legislation.  Consider the study itself.  It concludes that “50 to 129 million (19 to 50 percent of) non-elderly Americans have some type of pre-existing health condition.”  Can’t we expect a bit more precision from our governmental studies than a margin for error of 79 million Americans?  No doubt the political manueverers at HHS realized that the news media would report the higher number — which is exactly what has happened.  The headline on the ABC News website report on the study, for example, is:  “Half of Americans Have Pre-Existing Health Conditions”.

And consider, too, the fact that the report itself notes that “as many as 82 million Americans with employer-based coverage have a pre-existing condition.”  In other words, those conditions — if they exist at all — have not stopped those 82 million Americans from getting and keeping insurance through their employers.  If the insurance companies were really as evil as Secretary Sebelius and the supporters of “health care reform” legislation argue, how could that have happened?  Why didn’t the greedy insurance companies immediately eliminate coverage for those 82 million Americans?  The fact that, according to the government, as many as 82 million Americans are maintaining health insurance notwithstanding their purported “pre-existing conditions” refutes one of the basic arguments for having “health care reform” legislation in the first place.

Finally, the report shows, I think, that our federal government really doesn’t have much respect for the common sense of Americans.  Does anyone honestly think that if half of all Americans under 65 really had pre-existing conditions that made it impossible for them to get private health insurance we would see the kind of vigorous opposition to the “health care reform” legislation that has continued, unabated, despite the best efforts of the news media and the federal government to quash it?

 

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Senate Majority Leader Harry Reid is now describing the current Congress as the “most productive Congress in the history of the country.” He numbers among its accomplishments the “stimulus” legislation, the “health care reform” legislation, repeal of the military’s “Don’t Ask, Don’t Tell” policy, new financial regulations, and the extension of the Bush-era tax cuts.

When you are in the moment, it is difficult to assess what the ultimate judgment of history will be.  I doubt that many Americans would put the current Congress up among the great Congresses of the past, however.  After all, voters just gave the boot to many of the Representatives and Senators who passed the legislation Reid touts, and Congress’ approval rating is a dismal 13 percent — its lowest level in decades.  And those people who are critical of Congress no doubt will point to the things that Congress didn’t do, like passing appropriations bills or making meaningful cuts to the federal budget.

History will make its judgment, as history always does.  In the meantime, there is something unseemly and profoundly unattractive about Senator Reid’s excessive pride.  His hubris exemplifies a significant problem with the current uninspiring crop of legislators:  they are oblivious to how they are being perceived outside the Beltway.

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Today a federal district court judge in Virginia ruled that the “individual mandate” provision of the “health care reform” legislation — that is, that portion of the statute that would require people to purchase health insurance or pay a penalty — is unconstitutional.

Judge Henry Hudson concluded that the individual mandate “exceeds the constitutional boundaries of congressional power.”  He found that the commerce clause, which gives Congress the authority to regulate interstate commerce, does not permit Congress to regulate a person’s decision not to purchase a product.  Although there are other court rulings that have upheld the “health care reform” legislation, Judge Hudson’s decision is significant because it reflects an interesting approach to skirting the broad powers afforded Congress through the commerce clause.  In effect, Judge Hudson is saying that if individuals choose not to purchase a good or service they are not engaged in commerce, and therefore they necessarily are beyond Congress’ regulatory power under the commerce clause.

Of course, this issue will be addressed by federal appellate courts and, ultimately, will be decided the Supreme Court.  Until then, it is an issue that Americans of all political stripes may well want to consider.  Supporters of the “health care reform” legislation want that law to be upheld — but do they really want a court ruling that says that Congress can force Americans to buy products or take other actions in furtherance of commerce?  In other instances, federal law requirements are simply attached to a decision and therefore become part of the individual decision-making process.  If I want to work, for example, I have to pay Social Security and have income tax withheld from my wages.  If I don’t want to pay Social Security, I can choose not to work.  With the “individual mandate,” however, there is no choice.  Simply by virtue of being an American, you become obligated to buy health insurance.

When we speak of constitutional doctrine, we have to take the long term view and look past the relative merits of the statute at issue.  If the Supreme Court rules that Congress has the constitutional power to force us to buy health insurance, what’s next?  Smoke alarms?  Government bonds?  Subscriptions to the Congressional Record?  And if we think the corruption and influence of lobbyists is out of control now, what will it be like if corporations and interest groups learn that, through some deft lobbying work, they can achieve passage of legislation that will require us to spend our money for their goods and services?

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Does anyone in government stop and think about what they are really doing, anymore?

Here’s the latest story of some ridiculous lack of judgment by a government regulator.  A 7-year-old girl in a suburb of Portland, Oregon sets up a lemonade stand at a neighborhood festival and starts serving lemonade made from bottled water and Kool-Aid mix, at a price of 50 cents a cup.  Some county health inspector with a clipboard comes up and asks the kid to show her temporary restaurant license.  Not surprisingly, the child doesn’t have one — they cost $120, after all — and the health inspector tells the kid that she has to close up shop or face a $500 fine.  The child left in tears.  Of course, the county health inspectors defend the action, saying that they “need to put the public’s health first” and must “protect the public” no matter how small the business or how young the proprietor.

Didn’t anyone at the county health department ever have a lemonade stand?  Doesn’t anyone at the county health department have any common sense?  Is unlicensed lemonade sold by a 7-year-old really such an enormous risk to public health that the full weight of the country government must be brought to bear?

Whether a 7-year-old gets to run a lemonade stand without being harassed and reduced to tears by clipboard-waving bureaucrats doesn’t mean a lot in the grand scheme of things.  This story reveals a greater concern about how government works, however.  One reason why some people, at least, oppose the government making decisions about their health care is precisely because they are worried that those momentous decisions will be made by nameless bureaucrats who don’t have the sense to determine that a 7-year-old’s lemonade stand doesn’t pose a fundamental risk to public health.

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Tuesday’s election in Missouri included a ballot initiative where voters were asked to weigh in on whether a key provision of the “health care reform” legislation — the “individual mandate” that requires people to either get health insurance or pay a penalty — should be invalidated.  More than 71 percent of the Missouri voters voted yes on that issue.

I’m sure supporters of health care reform have lots of rationalizations for the landslide in Missouri — it was a special election, Republicans were more motivated to go to the polls, serious people understand that ballot issues aren’t going to decide the matter and therefore we shouldn’t pay attention to the results, etc. — but I think the Missouri election result has to be viewed as having some significance.

The reality is that, when voters were asked to pull the lever on a key feature of the “health care reform” legislation, they rejected it overwhelmingly.  Commentators can pooh-pooh the results if they wish, but does anyone doubt that if Missouri voters had overwhelmingly approved of the individual mandate that result would have been cited as evidence that popular perception of the legislation was changing?

I don’t know whether an up or down vote on one part of a complex bill can tell us much about how voters will treat members of Congress when they stand for re-election in November.  Most voters aren’t single issue voters; they typically consider an incumbent’s overall record.  Still, if I were a Democrat who had voted in favor of the “health care reform” legislation and its individual mandate centerpiece, the Missouri results would leave me feeling queasy.

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The New York Times recently carried an interesting article on the Justice Department’s arguments against claims that the “health care reform” legislation is unconstitutional.  The “linchpin” of the argument is that the individual mandate, which requires people to obtain health insurance or pay a penalty, is constitutional as an exercise of Congress’ broad taxing power.

The Justice Department’s argument is interesting because, while the “health care reform” legislation was being debated, President Obama and many of his congressional allies denied that the individual mandate was a tax.  For example, Congress did not cite its taxing power as a basis for the legislation.  Now that the legislation is being challenged, however, the Administration’s lawyers have recognized the individual mandate for what it is — a tax on individuals and their individual decisions — in order to buttress its prospects for being upheld.

Just another example of how duplicitous the legislative process can be.

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The Wall Street Journal has published an article with the latest news from Massachusetts — the state whose universal health care program served as the model for the federal program that will soon be taking effect nationwide.  The news, to put it mildly, is not good.  The highlights (or rather lowlights):

*  The Massachusetts plan increased private employer-sponsored plan premiums by an average of 6 percent.

*  Massachusetts has the highest average premiums in the United States.

*  There is rampant and growing abuse of the state’s “individual mandate,” in which people buy insurance only when they are about to incur significant medical expenses and then drop the coverage after the expenses have been covered by insurance.

*  The state imposed price caps on insurance rates that had no actuarial support (but were politically popular), even though underlying state health costs are rising at a rate of 8 percent annually.

I am sure that all working Americans will welcome increased health plan premiums, to go along with the tax increases that will take effect starting in 2011.

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A few days ago a 10 percent federal “tanning tax” took effect.  The tax is one of the revenue-generating provisions of the “health care reform” bill.  It applies only to tanning beds and other devices that use ultraviolet rays to give customers tans and is expected to generate some $2.7 billion in annual revenue.  The stated purpose of the tax is to fill federal coffers while at the same time discouraging people from engaging in risky behavior.  Is indoor tanning really more risky than sitting out in the summer sun without using any sunblock?  Both approaches expose the skin to ultraviolet rays, but a recent study (criticized by some industry groups) concludes that indoor tanning is a special risk factor for melanoma.  Interestingly, the “tanning tax” replaced a different tax — dubbed the “Botax” — that would have put a 5 percent tax on Botox injections, breast implants, and other forms of elective cosmetic surgery.  The “Botax” was rejected after heavy lobbying by doctors and the medical industry.

I don’t use indoor tanning salons and can’t imagine doing so — but I question the underlying concept of the “tanning tax.”  Do we really want to get into the habit of taxing what the federal government considers to be risky behavior?   Should sports cars and motorcycles be taxed at higher rates than sedans?  Should mountain climbers, skydivers, and participants in extreme sports should be taxed more heavily than couch potatoes?  We are moving beyond “sin taxes” on alcohol, tobacco, and gambling to a new realm of governmental efforts to modify human behavior — and I am not comfortable that the government is well-situated to make those kinds of judgments.

The “tanning tax” is a good example of what can happen when the government makes these kinds of decisions.  The “Botax” would have produced more revenue than the “tanning tax,” but it had powerful opponents who were able to derail that initiative.  Most tanning salons, in contrast, are locally owned small businesses without significant political clout.  In the test of political muscle, the tanning salon owners lost.  Political clout doesn’t seem like the most scientific way to determine behavioral modification goals, however.

One other point about the “tanning tax” is worth mentioning.  Tanning salons are sources of jobs and shopping center leases in virtually every community.  The local owners of those businesses are concerned that the tax will cause customers to cut back on their visits and thereby force some tanning salons out of business.  It is too soon to tell, of course, whether those dire predictions will come to pass — but in these difficult economic times why are we taking steps that might put small businesses into bankruptcy and cost scarce jobs?

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One of the first rules learned by trial lawyers is this:  when cross-examining an adverse witness at trial, you never ask a question if you don’t know how the witness must answer that question.  You don’t want surprises, and asking one question too many and getting an unexpected answer that is a spear to the chest of your case is the worst surprise of all.

Congress apparently doesn’t know this rule — or at least the House Energy and Commerce Committee didn’t.  As readers of this blog will recall, after the “health care reform” legislation was enacted a number of large American companies changed their financial statements to reflect increased liabilities.  Congress responded by asking the companies to produce all of their confidential internal documents related to the impact of the new law on health care costs.  That was the question that should not have been asked.

As Fortune recently reported, the documents produced by the companies show that the companies are considering getting rid of their employee and retiree health care plans entirely — which is exactly what opponents of the “health care reform” legislation predicted.  It turns out that, for many companies, paying the penalty to the government for not offering health care plans is far less costly than the expense of continuing to offer the plans.  Part of the reason for that imbalance is that the “health care reform” legislation is going to add considerably to the cost of the plans, by requiring coverage for people who are currently uninsured, through operation of the “Cadillac tax” on certain plans, and as a result of the pass-though of new taxes on drug manufacturers, medical device makers, and health insurers.  According to the documents the Committee received, AT&T alone would save nearly $2 billion a year by junking its plan and paying the penalty.  In this highly competitive global economy, where corporations are trying to squeeze every penny, does anyone doubt that at least some American companies will lock in those savings by getting rid of their employee plans?

If corporations do jettison their plans, what will it mean?  For one, it will mean a lot more Americans will need to be covered by plans that are subsidized by the government, which in turn will cause the projected cost of the whole “health care reform” apparatus to skyrocket.  For another, it will mean a lot of people who have Human Resources jobs at American companies will need to dust off their resumes.  If companies don’t need to administer health care plans they won’t need as many HR people as they have now.  And finally, it means there will be a lot of unhappy Americans.  For all of the focus on the “problem of the uninsured” during the debate on the “health care reform” legislation, the fact is that the vast majority of Americans have insurance and are happy with that insurance.  Most of those people are insured through their employers.  If their company plans go poof, and they have to try to find some kind of alternative coverage, they aren’t going to grateful to Congress for that opportunity.

How did the House Energy and Commerce Committee react to these documents?  Predictably, they canceled the hearings and meekly concluded that the companies’ accounting treatment of the increased health care costs was just fine.  That kind of “hear no evil” approach won’t work quite as well when companies start to cancel their employee health care plans, however.

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Last night President Obama directed the Department of Health and Human Services to require all hospitals that receive Medicare and Medicaid funding — which means virtually every hospital in the United States — to afford visitation rights to the partners of gay men and lesbians who are hospitalized.  It is hard for me to believe that, in the year 2010 in America, there are hospitals that bar same-sex partners from visiting patients, but apparently there are still some such benighted institutions in the land.  It is to President Obama’s great credit that he took action to end that practice.

If a hospital’s mission is to help sick people get better, how can they reconcile that purpose with a a policy that excludes a loved one who could provide emotional support and comfort to the patient?  Common sense says that the visit of a loved one will make the hospital patient feel happier and less isolated and therefore quicker to feel better.  Studies have supported that conclusion.  Given that fact, hospitals should be welcoming any visitor who will facilitate the healing process, regardless of the nature of the visitor’s relationship with the patient or the hospital’s unrequested and unnecessary moral judgment on the propriety of that relationship.

It is too bad that the President of the United States had to issue instructions that will cause hospitals to simply focus on their mission of healing, because it says something unfortunate about some American hospitals.  But, if a presidential edict was needed to implement basic fairness, I am glad President Obama supplied it.

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