November 29, 2010

Mandatory health insurance lawsuits—a brief look at the other arguments

By Mandatory health insurance lawsuits—a brief look at the other arguments

Author: Timothy Sandefur

There are now 20 federal lawsuits going forward challenging the Obama Administration’s health care law—variously known as “Obamacare” or “PPACA.” Four lawsuits—one filed in Arizona, another in D.C.,one in Tennessee, and one in Arkansas—have been dismissed. That leaves cases pending in federal courts in New Jersey, New Hampshire, Pennsylvania, Texas, Nevada, Oklahoma, Missouri, Mississippi, Ohio, Virginia, and Florida, as well as a two cases that have already been appealed to the Courts of Appeals for the Sixth and Ninth Circuits.

All but one of these 20 ongoing lawsuits challenges the constitutionality of the “Individual Mandate,” which requires every American except those few who qualify for an exemption or are already in a government program, to buy health insurance from a private company, whether they want to or not. PLF’s lawsuit, Sissel v. Dep’t of Health & Human Servs., now pending in the trial court in Washington, D.C., makes only this argument, and focuses solely on the Individual Mandate’s impact on individual freedoms. We argue that Congress has no lawful authority to force people to participate in commerce; the Constitution’s “commerce clause” does not go that far.

But there are many other arguments being made in various other cases, some very serious, and some less so. I can’t describe all of them here, but I thought I’d briefly take a look at some of the other arguments being made.

1) The Spending Clause

State of Florida v. Dep’t. of Health & Human Servs. (the Florida case) and Kinder v. U.S. Dep’t of Treasury (the Missouri case), argue that Obamacare violates the rights of the states by forcing them to admit a large number of new Medicaid recipients. Medicaid is a federal program that reimburses states for providing health care coverage for people who fall below a certain income level. Obamacare requires states to admit into the program many more people than were previously admitted.

Now, Medicaid’s a “voluntary” program, in theory—states can, supposedly, choose not to participate, and under South Dakota v. Dole, Congress can offer states money in exchange for giving up certain authority, and if states agree, there’s no constitutional violation. The problem is that the Supreme Court said in Dole that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” If Congress uses its spending power to twist a state’s arm, the Court will intervene. Florida and the other states argue that this is occurring here, because Medicaid involves such an enormous percentage of every state’s budget, and because there’s no real method in place for states to opt out of the system if they choose to. What’s more, states agreed to participate in the program under certain understandings, but the federal government has altered the deal in such a way as to basically undo the state’s agreement.

The federal government points out in response that there’s really no clear law on the question of when a deal becomes “arm twisting” under the Dole case. In fact, the government argues that this is basically a political question, one courts should not decide. This is a crucial matter, because there are a great many areas of the law in which Congress intercedes by providing grants to state in exchange for state giving up certain powers. If there’s no limit to Congress’ power here, it’s hard to see how much state autonomy is left. What’s more, if states say no, they still have to send their tax dollars to Washington, D.C. It doesn’t make much sense to allow the federal government to take loads of money from states, and then return that money with conditions attached—and then call the whole thing a “voluntary” transaction.

Motions for summary judgment have been filed in the Florida case, and a hearing is scheduled for December 16th. The plaintiffs in that case include 20 states. The Missouri case is on hold right now, in the Missouri federal district court, waiting for the government to respond.

2) The Guarantee Clause

The Constitution guarantees to every state a republican form of government. This is a fascinating constitutional provision with a rich history to it, but the Supreme Court has never actually enforced it. In a case called New York v. United States, it struck down a federal law that required states to take charge of radioactive waste material—states weren’t given a real choice in the matter—and Justice O’Connor wrote some paragraphs in the opinion suggesting that there might be some power in this constitutional provision after all.

The Missouri lawsuit, however, makes an interesting Guarantee Clause argument. It charges that Obamacare runs counter to two state laws: the “Hancock Amendment,” which forbids the state from taxing Missouri citizens above a certain level, and the state’s balanced budget requirement. Since the new law forces states to admit new people to the Medicaid lists (the state estimates some 465,000 people), and federal subsidies don’t entirely make up for the increased costs, the only possible outcome is that state taxes will have to be raised above the maximum allowed under the Hancock Amendment. Thus Obamacare undermines the state’s ability to govern itself.

3) “Entrenchment” (or Nonrepealability)

Coons v. Geithner, filed by the Goldwater Institute in Phoenix, argues among other things that Obamacare attempts to create an unconstitutional, non-repealable agency called the Independent Payment Advisory Board, or IPAB, which makes policies about Medicare spending which automatically become law unless Congress amends them. But the restriction on Congress’ power to amend these recommendations, or on Congress’ power to eliminate IPAB, are so extremely narrow that they effectively make it impossible for Congress to repeal the IPAB provision of the law. The plaintiffs recently filed a motion for a preliminary injunction that focuses on this unusual and interesting argument. You can read more about it here.

4) Religious exemptions

Lawsuits by the American Center for Law and Justice and others argue that the religious exemptions provided in Obamacare violate the First Amendment and the Equal Protection Clause because they allow the Department of Health and Human Services to “recognize” certain religious groups and grant them exemptions from the Individual Mandate that are not provided to others. Religious exemptions are always a tricky area of the law. Under Employment Div. v. Smith, the government is not required by the Constitution to extend religious exemptions to anyone; but once it chooses to do so, there’s the problem of favoritism. The ACLJ’s lawsuit represents members of non-traditional faiths who refuse all medical treatment, but who won’t qualify under any of the exemptions.

There are a number of other interesting legal problems presented by the lawsuits over Obamacare. You can keep up to date here, here, or here. The cases to watch right now are the Florida case, the Virginia case (Virginia v. Sibelius), Coons v. Geithner, and Sissel. The Missouri lawsuit is also worth keeping an eye on, once the litigation really gets under way.

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