If health reform is so great, why does everyone want to be exempt from it?
And aren't those exemptions, as well as the individual mandate forcing people to buy coverage, also unconstitutional?
Unions, federal, state and local employees, senior citizens in Florida, Michigan taxpayers in Blue Cross/Blue Shield, the states of Nebraska, Vermont and Massachusetts, along with 17 states, religious objectors, policemen, firefighters, longshoremen, construction workers, miners, and fishermen, all have won or are in the process of winning legislative exemptions that say they don't have to abide by health reform, or certain parts of it (for details, see below).
Legal experts say these exemptions are unconstitutional, as unlucky Americans with high cost plans who don't get these exemptions will have to pay more, so they may not feel so equally protected under this new law.
Coverage costs are high because health costs are high, which this reform does nothing to stop--and insurance costs will go even higher as those unlucky Americans in Cadillac plans will have to cover the costs of special interests who get an exemption.
Individual Mandate is Unconstitutional
And also unconstitutional is the individual mandate, the lynchpin of health reform, a mandate which forces those who don't have insurance to buy health coverage, and if they don't, they have to pay a tax and/or face possibly jail time (sections 501 and 513 of pending Senate bill).
If the insurance mandate vaporizes upon a successful constitutional challenge, that is the end of this chapter of health insurance reform.
The Framers of the US Constitution never intended to let Congress regulate economic activities that were not commercial, much less interstate, because the mandate is effectively a tax on not doing anything, meaning, not buying insurance.
The Congressional Budget Office has already said that an insurance mandate is unconstitutional, and legal experts agree--with talk of a Supreme Court challenge in the air.
Backers of the insurance mandate contend it is constitutional under the government's power “to regulate commerce…among the several states,” according to legislative language (curious that the more sweeping Congressional powers to tax and spend are not invoked here).
Since When Can the US Force You to Buy Anything?
That's at the heart of what legal scholars say would be an easy constitutional challenge to health reform if it passes, a case that could make its way to the US Supreme Court. Critics charge an individual mandate would violate the interstate commerce clause of the US constitution.
The mandate would be an expansion of federal government power and involvement in individual decisions that would be an unprecedented expansion of Congressional power, legal pros add.
Passing into law an individual mandate forcing taxpayers to buy health insurance would open up a well-packed Pandora's box, as it would give Congress unprecedented power to regulate, prohibit, mandate and tax all sorts of consumer economic choices.
Never Forced to Buy War Bonds, Wheat or Cars?
Never before in the history of the United States has the federal government forced any taxpayer to buy any goods or services, say legal experts Randy Barnett at Georgetown University Law Center, Nathaniel Stewart, a lawyer at White & Case, and Todd Gaziano, director of the Center for Legal and Judicial Studies at the Heritage Foundation, a conservative DC think tank.
Even during World War II, taxpayers were not forced to buy US bonds to support the war effort, they note.
No farmer was forced to grow food for the troops, no worker was conscripted to build tanks.
And as of yet, taxpayers are not forced to buy Cadillac Escalades or any other car to support the bailed out auto companies.
This is essentially Congressional coercion of taxpayers, forcing them to buy “artificially high priced policies to subsidize coverage for others, as well as an industry saddled with other government costs and regulations,” the legal experts note in a new report.
“If Congress can mandate this, then it can mandate anything,” the three law experts say, adding, “Congress could require every American to buy a new Chevy Impala every year..because such purchases would stimulate commerce and help repay government loans.” Congress could also force taxpayer to buy, say, wheat bread to subsidize farmers, the three opine.
Watershed Moment for the US
The passage of this mandate would fundamentally alter the “relationship of the national government to the states and the people,” the three legal pros say, adding if it passes, there would be no boundary to “Congress's commerce power—Congress could mandate anything.”
Backers of the mandate contend that revenues from the individual mandate would go towards lowering health costs, though you don't hear now about a lockbox for these new tax revenues, so there is nothing to stop Congress from using tax revenues for pork or other spending.
(Don't be fooled when you hear this new tax called a penalty or a “shared responsibility payment.” It's a tax.)
The same lockbox issue goes for the revenues raised from the Cadillac tax on high cost policies, which is now really a Dodge minivan tax, as that 40% rate hits more middle class taxpayers because it is not indexed for inflation, forcing the President to break his campaign pledge to not raise taxes on the middle class.
Plus the contortions figuring out what plan gets socked with it would give Houdini a backache. Unions and 17 states got exempted, too, and don't have to pay this tax for eight years.
In fact, health reform giveaways to states like Nebraska and Louisiana have turned the states into tin cans on a just got married car, clattering away for their government cheese, too.
CBO Said There's a Case Against the Mandate
But the argument against the federal mandate is this. The Constitution grants only limited powers to the federal government when it comes to regulating interstate commerce, as the Congressional Budget Office noted when the Clinton Administration attempted health reform in 1994:
"A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States."
The CBO added:
"An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government." -- Congressional Budget Office, 1994
And the mandate would for the first time let Congress “regulate the doing of nothing at all,” not buying insurance, which is hardly economic activity, say Barnett, Stewart and Gaziano. If you don't buy insurance, the new health reform bill says the IRS would slap you with a fine or penalty, and possibly jail time.
The Supreme Court's most expansive rulings on Congress's power do not support the mandate, the three say, and if the Court upheld it, it would “create a new constitutional doctrine,” they add.
The Congressional Research Service said in a July 24 report that enacting a mandate, while possibly constitutional, would pose a "challenging" and "novel" question as to whether Congress can use the commerce clause "to require an individual to purchase a good or service."
Health Insurance is Not Like Auto Insurance
Supporters of the mandate will tell you that states force licensed drivers to buy auto liability insurance coverage. Meaning that in a car accident, you are required to have coverage to protect against injury to another person driving on government built public roads.
But what they won't tell you is that auto insurance is a state regulated issue, in fact, it's connected to the states' constitutional authority to provide police protection, the three legal experts say. And the government can say, look, you're driving on public roads so we can force you to have coverage.
Moreover, no one forces passengers in cars driven by bad drivers to buy auto insurance. But the government would force you to buy health insurance if this reform passes. Also, driving is a voluntary act—living isn't, the three legal pros note.
What Massachusetts Said
Massachusetts got around its Constitutional criticisms of its mandate by saying that its health reform, which includes a similar mandate, does not infringe on any right protected by the state or the US Constitution because:
(a) it has a religious carve-out for people whose religious beliefs preclude them from acquiring health care insurance, and
(b) it is not an unreasonable taking of private property because the state has a carve-out for people who can prove they cannot afford it.
Federal Health Reform Apes Massachusetts
Likewise, federal reform backers can argue their legislation passes constitutional muster, too, as the proposed federal insurance mandate exempts taxpayers with income below 100% of the poverty line, as well as religious objectors, incarcerated individuals and anyone determined to have suffered a hardship regarding their capability to obtain coverage, as determined by the Secretary of Health and Human Services.
Massachusetts won the only solid challenge to its law.
More on the Massachusetts Plan
Since enactment, the number of newly insured persons has increased by approximately 430,000 in Massachusetts.
Of this group, 34% were newly enrolled in private, employer-sponsored coverage, 9% had private, non-group coverage (through the traditional non-group market or CommChoice program), 18% had public coverage through MassHealth, and 38% had fully or partially subsidized coverage through Commonwealth Care.
The state had the lowest uninsured rate among all states in 2008, and by 2009, state survey data showed the insured rate was 97.3%.
Massachusetts had an uninsurance rate of 2.7% in 2009. This compares with an uninsurance rate of 6.4% in 2006, the year of enactment.
Massachusetts' Costs Higher Than Expected
However, Massachusetts' costs for expanded coverage have exceeded initial projections, and consumers have experienced increases in the affordability of obtaining health care during the initial implementation phase of health reform.
Original expenditure projections for the CommCare program in FY2007, FY2008, and FY2009 were $160 million, $400 million, and $725 million, respectively.
While actual spending for FY2007 was less than originally projected, expenditures for FY2008 and FY2009 were greater than original projection amounts.
Commonwealth Care Expenditures
Original Expenditure Projection: $160 million
Actual to Date and Updated Expenditures: $133 million
Original Expenditure Projection: $400 million
Actual to Date and Updated Expenditures: $628 million
Original Expenditure Projection: $725 million
Actual to Date and Updated Expenditures: $800 million
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Why did Massachusetts' costs rise? In part, due to greater than anticipated enrollment in the CommCare program, at least during initial implementation. One of the reasons is that the state originally underestimated the size of the uninsured population.
And besides underestimating the size of the enrollee population, costs under CommCare were larger than expected because the subsidies provided under the program are more generous than originally specified.
Not One Thin Dime, the President Says?
If federal health insurance reform passes, the US deficit will inexorably rise. The president said health reform would not raise the deficit "by one thin dime, and he's right," says economist Art Laffer. "it will raise it by hundreds of billions of little dimes."
Who Else Has Won Exemptions from Health Reform?
- “Frontier” hospitals and doctors in Montana, North and South Dakota, Wyoming (they get higher Medicare payments)
- 2,900 citizens of Libby, Montana (individuals exposed to environmental health hazards and who now suffer from asbestos-related illnesses due to a now-closed mineral mining operation in Libby get Medicare coverage)
- Nebraska Blue Cross/Blue Shield and Mutual of Omaha (exemption from insurance fees like Michigan Blue Cross)
- Individuals employed in “high risk” professions have higher threshold amounts for the Cadillac tax -- electrical linemen, policemen, firefighters, emergency first responders, longshoremen, and workers in construction, mining, forestry, fishing and certain agriculture jobs.
- Retirees 55 or older with gold-plated health care plans (they similarly have a higher threshold for the Cadillac tax on their plans – meaning, UAW retirees.