Cuts in Mental Health Funding Continue; Supreme Court to Rule
As America waits for the U.S. Supreme Court to hear oral arguments in, and decide on, the constitutionality of the Patient Protection and Affordable Care Act of 2010 (PPACA) in March, state cuts in mental health funding continue unabated in many states throughout the country. As previously mentioned here, the PPACA review undertaken by the Court will not only focus on the constitutionality of the individual mandate but will also examine PPACA’s Medicaid expansion. By expanding Medicaid, PPACA will provide coverage to millions of those living with serious mental illness. PPACA also provides for increased community-based outreach, from changing the waiver laws to awarding grants for new programs, in order to further improve essential services for those living with mental illness.
While many fixate on late March, local governments continue a practice that started a few years ago: slashing funding for mental health services. Just last week, Chicago’s Department of Public Health announced they were closing half of their mental health clinics — disproportionately affecting the city’s African-American and Hispanic populations, according to advocates. Over the last fiscal year, New York has cut its mental health budget by $95 million, and California has by $177 million. According to a new NAMI study released late last year, from 2009 to 2012, four states have slashed their mental health expenditures by more than 30 percent; South Carolina, at the top of the list, has cut funding by nearly 40 percent. Alaska and Nevada — the two states with the highest suicide rates in the country — are both in the top five. In total, “general funds for mental health” are down $1.6 billion overall between 2009 and 2012.
Besides painful, the cuts are likely to be counterproductive: advocates argue that they will actually cost states more in the long run. Ronald Hornberg, director of legal and policy affairs at NAMI recently told ABC news that the cuts are resulting in those in need of services showing up in emergency rooms or prisons, where they are expensively boarded because there is nowhere else for them to go. Eric Lindquist, a clinical therapist at the Chicago Department of Public Health, called the mental health clinics that Chicago has decided to cut, when compared to hospitalizations or incarcerations, “one of the taxpayer’s best bargains.”
At the same time, headlines late last week brought news that 20 percent of Americans were diagnosed with mental illness in 2010 — nearly one in four women and about one in six men. Among other findings, nearly nine million Americans “thought seriously” about suicide in 2010, with over one million attempting to kill themselves. Almost two million teenagers “experienced a major depressive episode.” Those aged 18 to 25 had the highest incidence of illness: nearly 30 percent.
Obviously, the incidence of illness and prevalence of spending cuts nationwide does not bode well for the future of mental health care in this country. Those that depended on the services being cut are left to try and make it on their own, and those who worked for gutted agencies are looking for jobs. And this is why advocates look toward March. The Court’s decision later this year will shape the future of mental health services in this country for years to come — services that, right now, are increasingly endangered nationwide.
The Nirvana Fallacy Among Health Care Cost Cutters
One of my fun little Christmas presents was the Gruber/Newquist/Schreiber comic book guide Health Care Reform: What It Is, Why It’s Necessary, How It Works. It’s wonderfully illustrated and has a lot of good information. It offers a very hopeful vision of what health reform can do. It patiently explains the politics and policy that led to the ACA, portraying it as a compromise that both “left and right” should be able to support.
Unfortunately, the authors have chosen to portray virtually anyone who opposes the ACA, on both left and right, as either angry, exasperated, selfish, or unreasonable. (This animated penguin reminds me of several of the characters in the book.) There are also some questionable implications in various parts of the book. For example, on p. 21, it’s suggested that if employers didn’t have to pay so much for health care, they’d just pay that in higher wages to employees. But in an economy where corporate profits are capturing “88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income,” why should we assume that will happen? Workers’ share of national income is declining; they have little bargaining power. We can’t extrapolate the economic projections of the “Great Moderation” era to today’s Great Recession, where employers are exploiting the desperation caused by high unemployment to hold the line on wages and benefits.
One other objection: check out this graphic (my apologies for the poor camera-work), which suggests the deep problem in the US economy is that we’re spending too little on military or homeland security expenditures, and too much on health care:
Clarifying the AIA question
I have had a great deal of off-line correspondence with several readers about the applicability of the Anti Injunction Act to all of the lawsuits challenging the minimum essential coverage provision. Thanks to everyone who has written; it has been extremely helpful.
I remain convinced, at least at this point, that the AIA poses a very serious threat to the Supreme Court’s hearing of any challenge to the individual mandate. That said, I think I have a clearer idea of the issues that will determine the resolution of that issue.
* First, and perhaps most important, there is a very real dispute as to whether one should see the mandate (codified at 26 USC 5000A(a)) as a stand-alone legal obligation, or instead merely as part of a provision that, taken as a whole, gives those persons covered by the provision a choice between acquiring health coverage and paying a penalty.
* Second, this matters greatly, for if 5000A(a) is truly a stand-alone legal obligation, it obviously is not a “tax” within the meaning of the Anti-Injunction Act (or the General Welfare Clause). It is simply a command, an “economic mandate” in the words of Randy Barnett.
* Conversely, if the best way to see 5000A is in its entirety, giving “applicable individual[s]” a choice between either (a) buying insurance, or (b) remitting the applicable exaction on their tax return, then the provision might well be a “tax” within the meaning of the AIA, consistent with the reasoning of Judge Motz’s opinion in Liberty University.
There is much more to this issue. I think this question functions as a basic threshold, over which all other analysis of the AIA question must cross.
[Ed. Note: This post originally appeared on the aca litigation blog, an invaluable resource in following the various lawsuits pending against the Patient Protection and Affordable Care Act (PPACA or ACA). Bradley W. Joondeph, Professor of Law at Santa Clara Law School, publishes the aca litigation blog.]
The Anti-Injunction Act Complications
[Ed. Note: We are pleased to welcome the work of Bradley W. Joondeph to HRW. He is a Professor of Law at Santa Clara Law School who publishes the aca litigation blog, an invaluable resource in following the various lawsuits pending against the Patient Protection and Affordable Care Act (PPACA or ACA). He specializes in Tax and Constitutional Law and is a well regarded author on the topics of federalism, judicial behavior, and American constitutional development. He has had extensive experience with the Supreme Court, having served as judicial clerk to the Honorable Sandra Day O’Connor. He also served as clerk for the Honorable Deanell Reece Tacha of the United States Court of Appeals for the Tenth Circuit.]
The big news from [last Friday's] two decisions was not that Virginia lacks standing; that was a problem lurking in that case from the beginning, a nettlesome issue going all the way back to Judge Hudson’s first opinion (in August 2010) rejecting the United States’s motion to dismiss on 12(b)(1) grounds. Virginia would have stood on much stronger ground had it also alleged an injury in fact from the effect of the minimum essential coverage provision’s necessarily pushing more Virginia residents onto the state’s Medicaid rolls, and thus imposing a significant financial cost on the state. But the Commonwealth failed to do this, instead resting on the claim that it had standing based on the alleged “conflict” between its Virginia Health Care Freedom Act and the individual mandate. This was a weak argument from the beginning, and the Fourth Circuit’s holding was entirely unsurprising.
What is surprising–perhaps not on the merits, but in relation to the attention the issue has received to date, from the courts and the parties–is the court’s holding in Liberty University v. Geithner that federal courts lack any subject matter jurisdiction over a suit seeking to enjoin enforcement of the individual mandate because such jurisdiction is precluded by the Anti-Injunction Act. In this respect, there are some important points worth noting:
* This is a potential problem in every lawsuit currently challenging the individual mandate. That is, if the Fourth Circuit’s analysis is correct, then the Supreme Court would lack jurisdiction to hear any private plaintiff’s claim that the minimum coverage provision exceeds Congress’s enumerated powers until after a taxpayer was assessed a penalty under ACA 1501, paid the penalty, and sued the federal government for a refund. The case thus would not reach the Supreme Court until somewhere in the neighborhood of 2015 or 2016.
* It is conceivable, though, that the AIA does bar suits brought by state governments. Of course, state governments have problems establishing standing under Article III, as discussed above. But if the states could overcome the Article III hurdle, it might be that they (unlike private plaintiffs) could avoid the AIA bar. (I remember Judge Hudson analyzing this issue in his August 2010 ruling denying the United States’s motion to dismiss. Obviously, I need to look at it more carefully now.)
* One solution is that which Kevin Walsh has just proposed, which you can read here. In essence, Congress could pass a law repealing the AIA (since it is a statutory bar to jurisdiction) as applied to the ACA lawsuits. As Kevin documents, such a “retroactive” restoration of jurisdiction appears to be viable, even if there actually was not jurisdiction when the case was initially filed in the district court. (I agree with Kevin that Democrats and the President likely have an incentive to appear publicly to support this. But I am not sure there is quite the bipartisan consensus in fact to which Kevin refers. I can think of several reasons that most Democrats would much rather this case be decided by the Supreme Court in 2013 rather than June 2012.)
* What does the Justice Department do now? It has already essentially flip-flopped on this question–initially arguing that the AIA precluded subject matter jurisdiction, but then changing its tune, most notably in the letter brief it filed with the Fourth Circuit after oral argument. Does it now wish to flip back, given that the argument now seems to have gained greater credibility? Or is there too high a political cost for the administration in appearing to run from a fight on the merits? Or is there just too much to gain politically from delaying Supreme Court review (something the Court might well welcome) and pushing the decision past the 2012 election, such that it is worth taking whatever the hit will be from appearing so irresolute? I’m sure the DOJ lawyers working on this case were happy to have prevailed yesterday. But they simultaneously had a new strategic headache thrown into their laps.
There is much more to say, but I need to look into the various legal questions with more care. For now, it suffices to say that the Fourth Circuit’s decision may well have complicated matters considerably, at least if Judge Motz’s analysis proves difficult for the Supreme Court to refute.
UPDATE: One other point worth emphasizing: Probably the most important analytic move in Judge Motz’s opinion was to hold that the meaning of “tax” for purposes of the Anti-Injunction Act and the meaning of “tax” for purposes of the General Welfare Clause (relevant to whether the individual mandate is a valid exercise of Congress’s taxing power) are distinct. More specifically, the category of “taxes” (or exactions) to which the AIA applies is potentially much broader than that under the General Welfare Clause. Most (and perhaps all–I would need to go back and check carefully) of the other judges to have analyzed the AIA issue thus far have treated the issues as one and the same. (Recall Judge Vinson’s opinion in October 2010, where he held that the individual mandate imposed a “penalty” rather than a “tax,” and thus concluded from this both that the AIA was inapplicable and that the individual mandate could not be justified by the taxing power.) My suspicion is that Judge Motz’s analysis on this point will be much harder to refute than the government’s claim that the mandate is a valid exercise of the taxing power.
This post first appeared on the aca litigation blog.
Yes, the Federal Exchange Can Offer Premium Tax Credits
Whatever else the Affordable Care Act may accomplish, it has provided endless entertainment for law professors. The latest ACA kerfuffle involves the discovery by critics of the ACA of an ACA drafting error that would seem to deprive millions of uninsured Americans of tax credits to purchase health insurance and invalidate regulations recently proposed by HHS and the Treasury Department. The mistake is found in section 1401 of the ACA, which creates a new section 36B of the IRC. Two subsections of 36B ((b)(2)(A) and (c)(2)(A)(i)) suggest that premium tax credit eligibility under the ACA depends on the applicant being enrolled in a qualified health plan “through an Exchange established by the State under section 1311.” This would in turn suggest that individuals enrolled in a qualified health plan through a federal exchange established under section 1321(c) would not be eligible for premium tax credits, contrary to the recent proposed regulations.
That this is a drafting error is obvious to anyone who understands the ACA. Section 1311 of the ACA requests the states to establish American Health Benefit Exchanges and sets out the duties of the exchanges. Section 1321 of the ACA, however, provides that if a state elects not to establish and exchange or fails to do so, HHS must “establish and operate” an exchange in such a state and “take such actions as are necessary to implement” the other requirements of title I of the ACA, which includes section 1401. There is no coherent policy reason why Congress would have refused premium tax credits to the citizens of states that ended up with a federal exchange. None of the CBO reports scoring the ACA suggest that premium tax credits would only be available though 1311 state exchanges and not through 1321 federal exchanges. It is, finally, highly unlikely that the House, whose bill included only a federal exchange, would have approved a bill that only provided tax credits through state exchanges but not through the federal exchange.
No one pretends that the ACA is a model of statutory drafting. The bill, for example, contains three section 1563’s. No one intended the current ACA to become the final law. It was the Senate bill, enacted after the House bill, which was to go through conference before the final ACA was enacted. The election of Scott Brown in Massachusetts, and the adamant refusal of the Republicans to allow the legislation to become law without a supermajority in the Senate, doomed efforts to craft a final bill. Of course, major pieces of legislation are often replete with drafting errors. They are commonly followed by technical correction bills, which are often adopted by unanimous consent. If Congress were functioning as a normal deliberative governing body rather than as the legislative equivalent of trench warfare, errors in the ACA would long ago have been fixed.
But now we seem to be stuck with the textualists delight: a statute whose words clearly say what Congress clearly did not mean.
Is there a way out of this quandary? One possibility is to simply recognize that this is a drafting error. The Supreme Court has occasionally recognized that it is appropriate to exercise common sense in recognizing that “a busy Congress is fully capable of enacting a scrivener’s error into law.” Koons Buick, Pontiac, GMC, Inc. v. Nigh, 543 U.S. 50, 65 (2004) (Stevens concurring). But we do not need to rely on the courts to correct this error. Congress corrected it itself.
Four days after Congress passed the Patient Protection and Affordable Care Act, it enacted the Health Care and Education Reconciliation Act of 2010. Section 1004 of HCERA amended section 36B(f) of the IRC to impose on exchanges established under section 1311(f)(3)—that is, state exchanges—and under section 1321(c)—that is federal exchanges, the obligation to report to the IRS and to the taxpayer information regarding tax credits provided to individuals through the exchange. In this later-adopted legislation amending the earlier-adopted ACA, Congress demonstrated its understanding that federal exchanges would administer premium tax credits.
Section 36B(g) gives the Secretary of the Treasury the responsibility of issuing regulations to implement section 36B. This includes the authority to reconcile ambiguities in the statute, such as the inconsistency between subsections (b), (c), and (f) of 36B. In proposed regulations published on August 17, Treasury has proposed to recognize as eligible for premium tax credits any individual who is enrolled in a qualified health plan through an exchange and who meets other eligibility requirements, and adopts the HHS proposed definition of an exchange, which includes a federally-assisted exchange.
Under the Chevron rule, this official construction of an ambiguous statute should be accorded deference by any reviewing court. In fact, however, there will be no judicial review of this determination. It is not possible to conceive of a person who would be injured in fact by this interpretation of the rule such that they could present a case or controversy under Article III. The possibility, expressed by some, that a state official might be able to challenge the IRS rule should be put to rest by Thursday’s Fourth Circuit ruling, reaffirming long established Supreme Court precedent holding that state officials do not have the authority to serve as “roving constitutional watchdog[s].”
Progress Not Perfection: More Insured Under PPACA
Filed under: Obama Administration, Private Insurance
A UPI article (via the RWJF feed) notes that the PPACA provision that allows “young adults who are not full-time students to remain on their parents’ insurance plans until they are 26 years old,” has resulted in a gain of 600,000 additional persons to the insurance rolls in the first quarter of this year according to Forbes Magazine.
The article also notes that a recent Kaiser study shows that “46 percent more small businesses- those with 10 or fewer employees - were now offering health insurance to their workers.
The gain was prompted by a tax benefit offered in the Affordable Care Act.”
Looks like steps in the right direction. Read more here.
Recommended Reading: Recent Legal Scholarship on “Risk Classification by Design”
Tom Baker’s Health Insurance, Risk, and Responsibility after the Patient Protection and Affordable Care Act (forthcoming in the University of Pennsylvania Law Review) is short (it would seem a theme is beginning to emerge in my Recommended Reading posts), tightly-reasoned, and instructive. I highly recommend it.
Professor Baker’s essay “explores the contours of the solidarity and individual responsibility” embodied in [the Patient Protection and Affordable Care Act].” He identifies a number of challenges to the Act’s vision of “achieving … solidarity through individual responsibility[,]” including what he terms “risk classification by design.” With the passage of the Act, health insurance companies will no longer be able to evaluate each prospective policyholder to determine the risk that he or she will need medical care and then charge him or her a premium that accounts for his or her individual level of risk. Risk classification by design could still occur, however, “as individuals’ self select into different health care products according to their self-assessed health risk status.” For example, ["h]igh health risk people tend to prefer more complete health insurance coverage, fewer restrictions on their choice of doctors, and other plan features that make it easier to consume more health care.” If a plan offering with those features attracts a disproportionate number of high risk individuals, the health care costs associated with that plan would rise and premiums would increase accordingly. The end result would be high risk individuals paying more than low risk individuals for their health insurance, “challenging the core non-discrimination value embodied in the Act.”
Professor Baker points to a number of regulatory tools that the Act gives the states, the health insurance exchanges that states have begun to create, and the Department of Health and Human Services, to address the challenges posed by risk classification by design. These include (1) the minimum coverage requirements, which allow “less room for variation in plans that can be used to segment people into separate risk groups,” (2) the exchange certification requirement, pursuant to which an exchange can decline to certify a plan that uses “marketing practices or benefit designs that have the effect of discouraging” enrollment by high risk individuals, (3) the medical loss ratio requirements, which work by “requiring a successful cream skimming insurer to return to its policyholders all or most of the benefits of the cream skimming,” and (4) the risk adjustment procedure, the goal of which is premiums that reflect the entire exchange pool as opposed to the pool that has self-selected into a particular plan. These tools, Professor Baker argues, will only be partially successful, but that “will simply mean that more actuarial fairness survives than the Act’s drafters may have intended.” And actuarial fairness, he notes, has “many supporters, not all of whom are insurance industry apparatchiks.”
I also highly recommend two other recent articles addressing the post-reform potential for risk classification by design, Will Employers Undermine Health Care Reform by Dumping Sick Employees? (published in the March 2011 issue of the Virginia Law Review) by Amy Monahan and Daniel Schwarcz, and PPACA in Theory and Practice: The Perils of Parallelism (forthcoming in the Virginia Law Review), in which David Hyman responds to the arguments made by Professors Monahan and Schwarcz. Professors Monahan and Schwarcz warn of a “substantial prospect that [the Act] will lead some, and perhaps many, employers to implement a targeted dumping strategy designed to induce low-risk employees to retain [their employer-sponsored health insurance (ESI)] but incentivize high-risk employees to voluntarily opt out of ESI and instead purchase insurance through the exchanges[.]“ This dynamic, they fear, “could render insurance exchanges unsustainable and thereby jeopardize health insurance reform writ large.” Professor Hyman counters that what Monahan and Schwarcz consider a “bug” might in fact be a “feature” of health reform, particularly since for “dumping/[risk classification by design] to ‘work,’ Monahan & Schwarcz are clear that it has to make employers and employees better off-both individually and collectively.”
Center Examines PPACA’s Impact on NJ Health Insurance Law in Study Funded by the Robert Wood Johnson Foundation
In early 2011, the Center for Health & Pharmaceutical Law & Policy began efforts on a seven-month research study, “New Jersey Law Reform in Response to Patient Protection & Affordable Care Act,” in collaboration with the Rutgers Center for State Health Policy. Seton Hall Law’s research will address the interplay between the Patient Protection and Affordable Care Act (ACA) and State health insurance law, regulation, and practice.
Professor John V. Jacobi, Research Fellow & Lecturer in Law Kate Greenwood, and several law students are currently reviewing the legislative and regulatory changes that the ACA requires and permits New Jersey to make. They will develop a “cross-walk” between current law and law that is fully compliant with the ACA. They will also relate the provisions of the ACA to current New Jersey practice, and describe options available to the State of New Jersey as it undertakes the task of implementing the new Act. Seton Hall and Rutgers researchers will produce interim research briefs and a final paper incorporating legal, economic, and public policy analyses. The study is being administered by the Rutgers Center for State Health Policy and is funded by a grant from the Robert Wood Johnson Foundation.
President Obama Offers State Opt Out to Health Reform Law Provisions, What to Expect in Return
Filed under: Obama Administration, State Initiatives
Interesting editorial/analysis over at the LA Times on President Obama’s support of an opt out for states from provisions of the Health Reform law:
President Obama has thrown his support behind a bill to let states opt out of key features of the healthcare reform law before they take effect, including the controversial requirement that virtually all adult Americans buy insurance. The caveat, though, is that states must offer alternatives that provide comparable coverage to at least as many of the uninsured as the new law would, at no greater cost to federal taxpayers. It’s a small but welcome move that invites opponents of the law to shift from repealing it to improving it. Unfortunately, they probably won’t accept that invitation. Read more.
The editorial raises the spectre that the backlash witnessed to this proposal, from Republicans and other foes of the Health Care law, may be attributable to a fundamental difference in objectives.:
But there’s a fundamental disconnect between what the administration is offering and what opponents of the healthcare law are seeking. Obama wants to focus the debate on how best to achieve the law’s interrelated goals of increasing insurance coverage, improving the quality of care and slowing the increase in cost. Republican critics, however, don’t share those goals. To them, the reform should be primarily about controlling the cost of care.
It’s an interesting perspective, and one which deserves consideration and credit– especially by the light of the governors’ collective fiscal plight. But let’s not forget political gain as a motivation– President Obama is wildly unpopular among many. And the lack of approval for the President varies from state to state. A recent Gallup poll broke out the approval numbers by state, and the results are worth considering: Approval in Hawaii is (not surprisingly) 65.9%, Maryland is 57.6%, New York is 56.6. Half of the 10 most approving states are in the Northeast. But then there’s the West: Wyoming, 27.6%, Idaho, 31.6%, Utah, 33.8%. Half of the most disapproving states are in the West.The President didn’t fare all that well in West Virginia either, 33.4%.
There is political capital to be had in opposing President Obama– and at this juncture, the Health Reform law is still his signature piece of legislation. This simple truth has not escaped Republican strategists. Whether or not the olive branch opt out overture is ultimately accepted, the rhetoric will surely not reflect acceptance– at least in certain states.
Recommended Reading: Interesting Takes on the Individual Mandate
In her pithy, provocative essay The Freedom of Health (forthcoming in the University of Pennsylvania Law Review), Abigail Moncrieff argues that there exists a nascent constitutional right to “freedom of health” — that is, to “individual autonomy in healthcare decision-making.” The right is primarily a negative one, a “freedom to reject care” not to demand it (in contrast to the international human “right to the highest attainable standard of health”). But Professor Moncrieff argues that there is also a “freedom to obtain care” that is “implicit in and therefore tethered to the [Supreme] Court’s reproductive rights jurisprudence” but which “also gained five non-precedential votes in the assisted suicide case.” Among other implications, Professor Moncrieff argues that the freedom of health complicates the analysis of the constitutionality of the Patient Protection and Affordable Care Act’s individual mandate. She explains that
“today’s insurance contracts are not mere risk pools, gathering and distributing funds for healthcare consumption at the discretion of the insured. Instead, today’s contracts give insurers variable amounts of discretion, under ‘medical necessity’ review, to decide whether or not their insured can buy various kinds of healthcare with the pool’s money. That is, insurance companies today use their contracts to steer individuals towards certain healthcare consumption decisions, often refusing to cover treatments that they deem ineffective, unnecessary, or even just inordinately costly. … There seems, therefore to be a colorable claim that the mandate infringes the freedom of health by requiring individuals to enter discretion-limiting insurance contracts–requiring individuals to give a third-party insurer the power to influence or even to direct their healthcare spending.”
While Professor Moncrieff ultimately concludes that PPACA’s individual mandate does not unconstitutionally impinge on the freedom of health because it is narrowly tailored to achieve the compelling government interests in “[e]xpanding health insurance coverage and decreasing costs of insurance on the individual market,” this in no way diminishes the timeliness or relevance of her essay. It seems inevitable that we will confront much closer cases in the not-too-distant future.
Theodore Ruger’s Can a Patient-Centered Ethos Be Other-Regarding? Ought It Be? (published as part of a symposium on patient-centered health and ethics at 45 Wake Forest L. Rev. 1513 (2010)) also takes on the individual mandate, explaining that it “reflect[s] the principle of group solidarity” in that it “will drive more healthy Americans into larger private risk pools, and the prices they pay will in many cases be higher than is appropriate for their own age- and health-adjusted actuarial risk; this mandate will effectively result in a redistributive tax on youth and good health.” Professor Ruger’s essay explores the tension between, on the one hand, the principle of group solidarity reflected in the individual mandate and elsewhere in PPACA and, on the other, the “preference for individualization in American medicine” and “the correlative resistance to therapeutic standardization among providers and patients.” Professor Ruger notes that there is a “normative clash” between those who believe “medicine could be, or ought to be, standardized through collectivized expert agencies” and those who favor a “patient-centered conception of decisional authority.” Disputes like the controversy in late 2009 over the United States Preventive Services Task Force’s breast cancer screening recommendations, are “bound to recur in a system that is becoming increasingly interconnected, particularly given the scholarly and bureaucratic interest in giving greater prominence to expert cost-effectiveness research and best-practices standardization.” Professor Ruger discusses several ways that “concern for broader systemic goals” might be incorporated into a “patient-centered ethos of medical care,” but is skeptical that medical ethics will, or ought to be, dislodged from its individualistic focus. Instead, he concludes his thought-provoking essay by raising the possibility of “enhanc[ing] sensitivity to patient concerns on the part of the public and private institutions that in future decades will exert more standardizing and collectivizing pressures on the individual therapeutic relationship[.]“
Senate Votes Against Repeal: Out of the Woods but for How Long?
Photo by debabrata via flickr.
Last Wednesday, the Senate voted 47-51 against the “Repealing the Job-Killing Health Care Law Act.” 50 Democrats and one Independent voted against the Act while all 47 Republicans voted in favor of it (click here to view results). No surprises there… but where do we go from here?
The Washington Post and the New York Times report that pro-repeal Senators and activists remain energetic and optimistic. Senator John Cornyn (R-Texas) observes “[t]hese are the first steps in a long road that will culminate in 2012.” Marilyn Shachter, a tea party activist, predicts a repeal “definitely will happen. It may take until 2012, or after 2012, when we get rid of Mr. Obama and a lot of these borderline senators that are up for reelection are replaced.” Keith Hennessey, former Assistant to the President for Economic Policy and Director of the National Economic Council, outlines a two-year “path to repeal” the Patient Protection and Affordable Care Act (PPACA):
- Keep up the pressure in 2011 and 2012:
- maintain and strengthen Republican unity toward full repeal;
- repeatedly attack the bill legislatively on all fronts, knowing that most votes will pass the House and fail in the Senate;
- continue legal pressure through the courts; and
- tee up repeal as a key partisan difference in the 2012 Presidential and Congressional elections;
- In 2012 win the White House, hold the House majority, and pick up a net 3 Republican Senate seats to retake the majority there; and
- In 2013, use reconciliation to repeal ObamaCare, requiring only a simple majority in the Senate.
ABC News notes that the latest repeal attempt “was just one of three ways the Republicans are trying to kill the health care law.” The second way involves the constitutional challenges filed in the courts. The third way involves Senator Lindsey Graham (R-SC) and Senator John Barrasso’s (R-WY) proposed legislation allowing states to opt out of certain PPACA provisions, such as the individual mandate.
I would add a fourth way: good ol’ public relations (see my previous post on renaming/rebranding PPACA). For instance, last Thursday Alaska Governor Sean Parnell announced that he had asked the state attorney general whether implementing and enforcing PPACA would violate his oath of office. The Governor described himself as being “caught between a federal government that says, ‘You must pursue this, you must pursue this,’ and I have the duty to uphold the rule of law.” There’s some solid, dramatic PR right there.
Be that as it may, the Senate has spoken. The lower courts have spoken. Senators Graham and Barrasso have spoken. Governor Parnell has spoken. Members of this blog have spoken. Must we wait until Mr. Hennessey’s two year “path to repeal” has been successfully implemented or foiled before the Supreme Court chimes in?
Medicaid Targeted as States Cut Budgets
On January 21, Arizona passed legislation allowing the state to submit a Medicaid-waiver request to cut 280,000 people from the program next year. When filed, it became the first official request to suspend PPACA’s “maintenance-of-effort” provision. The mandate requires states to maintain early 2010 Medicaid eligibility levels until the 2014 nationwide expansion of eligibility. Arizona could lose its entire federal Medicaid contribution, approximately $3 billion, if it fails to meet the maintenance-of-effort provision.
The Associated Press reports that most Arizonans who lose coverage are “non-pregnant, non-disabled, childless adults and also parents with incomes above 50 percent of the federal poverty level.” According to the Arizona Republic, however:
Though the cuts have been billed as affecting only childless adults, about 30,000 of those who would lose coverage are parents and another 11,000 are children.
Judge Vinson’s Tea Party Manifesto
On first read, the most striking aspect of Judge Vinson’s ruling today is not its remedy — striking the Affordable Care Act in its entirety — but the impression one gets that the opinion was written in part as a Tea Party Manifesto. At least half of the relevant part of the opinion is devoted to discussing what Hamilton, Madison, Jefferson and other Founding Fathers would have thought about the individual mandate, including the following remarkably telling passage (p. 42):
It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.
As I’ve written elsewhere, the same Founders wrote a Constitution that allowed the federal government to take property from unwilling sellers and passive owners, when needed to construct highways, bridges and canals. But Judge Vinson dismissed those and other examples with the briefest of parenthetical asides: “(all of [these] are obviously distinguishable)” (p. 39). Instead, he twice cites and quotes the lower court opinion in Schechter Poultry (pp. 53, 55), which struck down the National Industrial Recovery Act, at the height of the Great Depression and the pinnacle of Lochner jurisprudence.
Still, it’s fair enough to conclude, absent controlling precedent, that being uninsured might not constitute interstate commerce. What’s harder to swallow is the judge’s rejection of the Necessary and Proper Clause. In refusing to sever the individual mandate, he not only concedes the mandate “is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to . . . what Congress was ultimately seeking to accomplish,” he astonishingly devotes about ten pages (63-74) to hammering home the mandate’s necessity, explaining, for instance, that:
this Act has been analogized to a finely crafted watch . . . . It has approximately 450 separate pieces, but one essential piece (the individual mandate) is defective and must be removed. It cannot function as originally designed. There are simply too many moving parts in the Act and too many provisions dependent (directly and indirectly) on the individual mandate and other health insurance provisions — which, as noted, were the chief engines that drove the entire legislative effort — for me to try and dissect out the proper from the improper
So if the mandate is so clearly necessary, why is it not “proper.” The answer, as in Virginia’s Judge Hudson’s opinion, is a virtual tautology: because the Commerce Clause does not permit it. Here are critical excerpts:
the Clause is not an independent source of federal power (p. 58) . . . Ultimately, the Necessary and Proper Clause vests Congress with the power and authority to exercise means which may not in and of themselves fall within an enumerated power, to accomplish ends that must be within an enumerated power. (p. 60)
In light of [United States v. South-Eastern Underwriters], the “end” of regulating the health care insurance industry (including preventing insurers from excluding or charging higher rates to people with pre-existing conditions) is clearly “legitimate” and “within the scope of the constitution.” But, the means used to serve that end must be “appropriate,” “plainly adapted,” and not “prohibited” or inconsistent “with the letter and spirit of the constitution.” . . . The Necessary and Proper Clause cannot be utilized to “pass laws for the accomplishment of objects” that are not within Congress’ enumerated powers. (p. 62)
The defendants have asserted again and again that the individual mandate is absolutely “necessary” and “essential” for the Act to operate as it was intended by Congress. I accept that it is. Nevertheless, the individual mandate falls outside the boundary of Congress’ Commerce Clause authority and cannot be reconciled with a limited government of enumerated powers. By definition, it cannot be “proper.” (p. 63)
My full rebuttal is here, but in brief: none of this is consistent with Comstock, which allows the federal government to commit mentally ill former prisoners to civil treatment, despite the clear absence of any general federal civil commitment power. And this is inconsistent with Lopez and with Justice Scalia’s concurrence in Raich, which note that regulation, otherwise forbidden, of local noneconomic activities, can be justified when this is “an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.” Thus, we still await a convincing explanation of why rejecting the “necessary and proper” defense is consistent with recent Supreme Court opinions, authored or joined by most of the conservative justices.
Commerce Clause Challenges to Health Care Reform
The following article, forthcoming in U. Penn. L. Rev., pinpoints the strongest arguments for and against federal power under the Commerce Clause to mandate the purchase of health insurance: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1747189
Among the key points I make in defense of this federal law are:
1. The “commerce” in question is simply health insurance, and not the non-purchase of insurance as challengers have framed it. Because “regulate” clearly allows both prohibitions and mandates of behavior, mandating purchase is lexically just as valid an application of the clause as is prohibiting purchase or mandating the sale of insurance.
2. Although existing precedent might allow a line to be drawn between economic activity and inactivity, there is no reason in principle or theory why such a line should be drawn in order to preserve state sovereignty. Purchase mandates, after all, are as rare under state law as under federal law.
3. Challengers do not seriously dispute the constitutional validity of the ACA’s regulation of insurers or the economic necessity of the mandate in order for that regulation to be effective. In fact, they essentially concede the mandate’s necessity by asking to strike the entire law if it is declared invalid. Accordingly, the mandate would pass the tests for constitutional necessity articulated by at least seven of the Justices in the Comstock opinion last year, and might even pass the necessity test embraced by Justices Thomas and Scalia.
4. An important challenge, not yet clearly discussed by court opinions to date, is that the mandate does not, strictly speaking, simply “carry into execution” Congress’ other regulatory powers, but is the exercise of a distinct power. However, both modern and historical precedents under the Necessary and Proper Clause are not limited narrowly to merely implementation measures. Both Comstock and a series of decisions under the Postal Power are good examples to the contrary since they authorize independent federal powers that expand the range of purposes and measures permitted by express Congressional powers.
5. There is no coherent basis for declaring a purchase mandate to be constitutionally “improper,” and a categorical ban on regulating inactivity would contradict the implicit reasoning underlying several other established precedents — such as those upholding the draft and the Congressional subpoena power. Also, federal eminent domain allows compelled transactions justified in part by the Necessary and Proper clause’s expansion of the commerce power, when applied, for instance, to citizen’s refusal to sell land for use in constructing highways, bridges, and canals.
6. Using the 10th Amendment to justify a categorical prohibition of purchase mandates (as Randy Barnett has argued) would be no more convincing than using the 9th or 5th Amendments (substantive due process). Instead, such a move would, for the first time and contrary to precedent, make the 10th a protector of individual liberties rather than just federalism concerns, and would radically enforce an absolute right to economic liberty, regardless of level of legislative justification or judicial scrutiny (see point 9).
7. Slippery slope concerns are no greater here than for any other of a range of expansive federal powers. Instead, the novelty of the mandate subjects it to greater political constraint, and so “parade of horribles” concerns may be even more unrealistic than similar settings where the Court has rejected them.
8. Grounding the mandate in the Necessary and Proper clause helps to confine its precedential effect by emphasizing it’s necessary role in the ACA’s particular regulatory scheme that, in other respects, clearly resides within the core of the conventional commerce power. This essential supportive and interconnected role is not shared by free-standing mandates to purchase American cars or broccoli, for instance.
9. Counteracting imaginary slippery slope concerns about absurd hypothetical laws are the legitimate concerns about insurmountable barriers that a prohibition of purchase mandates would erect. Forbidding Congress from any purchase mandate could cripple necessary efforts, for instance, to require preventive measures in the face of a massive pandemic that threatened tens of millions of lives.
Linnaean Regulation in Health Insurance and Information Technology, Part II
Filed under: EMR, Electronic Medical Records, Private Insurance
[Ed. note: This is the second part (perhaps evident from the title) of a two part post. Though each could well stand on its own, the first part can be found here.]
Insurance Reporting and Classification
Reporting requirements may not seem like a notable accomplishment. Nevertheless, the trend toward monitoring the products and services offered by insurance companies is an important step toward accountability. HHS needs to impose some order, some translatable logic, on fields that have threatened to become enormously parasitic and unproductive by or masking the true nature of their commitments.
Consider the practical illegibility of the average insurance plan. A vanishingly small number of subscribers actually read such plans. A plan may have complex cost-sharing requirements that vary among in-network and out-of-network primary care doctors, specialists, surgeons, hospitals, and procedures. While a “great risk shift” makes consumers all the more responsible for their choices in health care, it’s hard to imagine anyone accurately mapping the true fiscal consequences of given disease episodes in an aggressively complex plan.
By setting “a minimum level of health benefits, called the essential health benefits, that must be offered by certain health plans.” As Jessica Mantel explains, the term “‘essential health benefits package’ means coverage that not only provides for the essential health benefits defined by the secretary, but also limits cost-sharing for coverage of the essential health benefits in accordance with the parameters specified in the statute.” The Cancer Action Network has applauded the ACA for promoting “more standardization in the scope and value of private health insurance coverage available.”
Similarly, setting a “medical loss ratio” involves a careful delineation of insurer payments and functions that actually contribute to care. As Tim Jost explained in Health Affairs:
Medical loss ratios have long been of interest primarily to investors. An insurer that could achieve a low MLR by holding down expenditures on health care for its enrollees was a good investment. . . . On November 22, 2010, the Department of Health and Human Services released its interim final rule implementing the requirements of the new section 2718 of the Public Health Services Act (added by section 10101 of the Affordable Care Act), entitled, “Bringing Down the Cost of Health Care Coverage.” This provision is usually referred to as the “medical loss ratio” (or MLR) requirement . . .
Section 2718 requires health insurers (including grandfathered but not self-insured plans) to report to HHS each year, the percentage of their premium revenue that the insurer spends on 1) clinical services for enrollees, 2) “activities that improve health care quality,” and 3) all other non-claims costs, excluding federal and state taxes and licensing or regulatory fees. . . .
Jost describes in details how the classification works, and how it is designed to encourage more responsible insurer behavior.
Setting a Standard for Electronic Medical Records
Electronic health records systems will also need to develop shared data management standards. EMR vendors long argued that they needed flexibility to innovate in order to best reflect doctors’ practices and improve the capture of medical information. However, there is a tension between untrammeled innovation by vendors at any given time and later, predictable needs of patients, doctors, insurers, and hospitals to compare their records and to transport information from one filing system to another.
One system may be able to understand “C,” “cgh,” or “koff” as “cough,” and may well code it in any way it chooses. But to integrate and to port data, all systems need to be able to translate a symptom into a commonly recognized code. Health care providers can only avoid getting “locked into” a system if they can transport their records from one vendor to another. Patients want their providers to seamlessly integrate records.
HHS rulemaking has lain a groundwork for this type of common language of medical recordkeeping. As Sharona Hoffman and Andy Podgurski explain,
To address this problem, it is necessary for all vendors to support what we will call a “common exchange representation” (“CER”) for EHRs. A CER is an artificial language for representing the information in EHRs, which has well defined syntax and semantics and is capable of unambiguously representing the information in any EHR from a typical EHR system. EHRs using the CER should be readily transmittable between EHR systems of different vendors. The CER should make it easy for vendors of EHR systems to implement a mechanism for translating accurately and efficiently between the CER and the system’s internal EHR format.
There are also important opportunities for standardization in the security field:
As is true for a common exchange format, standardized security policies and mechanisms are unlikely to be adopted by vendors and providers without a regulatory mandate. In order to facilitate compliance and provide vendors with clear guidance, the regulatory mandate might incorporate, by explicit reference, some established and emerging security standards, such as the Internet Engineering Task Force’s Transport Layer Security (“TLS”) standard or its Public-Key Infrastructure (X.509) standard.
The discussion can quickly become technical, and it is difficult to explore all the ins and outs of the process. But the underlying purpose is clear: to develop some standard forms of interacting in a realm where “spontaneous order” is unlikely to arise and “network power” could lead to lock-in.
Of course, there are important differences between the EHR and health insurance landscapes. Symptoms refer to conditions that are, by and large, objective. (One can even imagine ubiquitous video cameras and sensors creating something like a complete patient record (or medical life log) for patients who consent to that type of monitoring.) Insurance contracts, by contrast, do not have the same “ontological firmness.” They must contemplate vague and open-ended spells of illness.
Nevertheless, a process similar to common exchange representation is now going on in the consumer affairs office of HHS. As the Office of Consumer Information and Insurance Oversight lays ground rules for ACA implementation, it must decide on some basic questions: what counts as insurance? What is a deductible? The ultimate goal is to require insurers to convey with far more precision what services they truly cover. The health insurance and health IT landscapes will only become governable when practices are nameable, classifiable, and comparable.
X-Posted: Concurring Opinions.
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