All Roads Lead to Justice Kennedy
This seems like a really big deal to me:
Justice Anthony M. Kennedy added that individuals had a role to play in cases that at first blush seem to implicate only a clash between federal and state sovereignty.
“Your underlying premise,” Justice Kennedy told Mr. McAllister, “is that the individual has no interest in whether or not the state has surrendered its powers to the federal government, and I just don’t think the Constitution was framed on that theory.”
That’s from Adam Liptak’s NYT story covering oral arguments at the Supreme Court last week, in a case which Liptak notes “will probably offer only limited guidance on the health care law’s prospects.” Which is true, of course, because the case has nothing to do with mandates or health care. It does have to do with a charge that the federal government has exceeded one of its constitutionally enumerated powers and impinged on the traditional authority of the states. But the contexts are so different, I wouldn’t expect much from the comparison with the ACA litigation.1
But that Kennedy quote is a gem—rare, strange, and possibly radioactive. It means that Kennedy considers individuals’ interests integral to questions of the scope of the enumerated powers of the federal government. In other words, individual liberty will be a component in Kennedy’s analysis of the constitutionality of the individual mandate. And that is not good news for health reform.
- Incidentally, there was a truly awesome irony at this argument, which deserves notice. Mike Dorf:
Finally, I’ll point to an irony of the case that perhaps someone else has already noted. Mr. McAllister was appointed to make an argument on behalf of the federal government even though the federal government does not want to make that argument. He then argued that private parties should not have third-party standing to make arguments on behalf of states when those states do not want to make the argument. One almost expects this argument to swallow itself or vanish in a puff of logic. I expect the next-best thing: a unanimous decision that Bond [the plaintiff] has standing.
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What’s Federalism Got to Do with It?
David Cole thinks the legal battle over the individual mandate is not about liberty:
Near the end of his decision, Judge Hudson writes: “At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it’s about an individual’s right to choose to participate.” Virginia Attorney General Ken Cuccinelli, who brought the suit, echoed that point the day the decision came down, insisting that “this lawsuit is not about health care. It’s about liberty.” But that is exactly what the case is not about. A decision that Congress lacks the power to enact the individual mandate says nothing about individual rights or liberty. It speaks only to whether the power to require citizens to participate in health insurance, a power that states indisputably hold, also extends to the federal government. The framers sought to give Congress the power to address problems of national or “interstate” scope, problems that could not adequately be left to the states. The national health insurance crisis is precisely such a problem. The legal question in the case is about which governmental entities have the power to regulate; not whether individuals have a liberty or right to refuse to purchase health care insurance altogether.
It’s certainly true that liberty itself is not at issue in these lawsuits. There are no viable due process claims involved, for instance. But the suits are about the scope of the national government’s powers in the federal system. That is, they are about federalism. And federalism is, or was, or is supposed to be, one of the arrangements by which the Constitution guards our many interests, including liberty interests. So, I think maybe the suits are at least a little bit about liberty. Indirectly.
It may seem odd that the mandate controversy is not about whether individuals have the right to be let alone but is instead largely about the distribution of power between the federal and state governments. If you’re wondering why states’ powers have anything to do with it, well, I feel you.
The Constitution does not grant the state governments their powers, as it does to the federal government. It does take powers away, though, leaving states with a set of negatively defined residual powers—what Justice Kennedy described last year as “the whole, undefined residuum of power remaining after taking account of powers granted to the National Government.” And though it is possible for the states and the Feds to share coextensive powers in some areas, it is also possible that federal law will simply preempt any state laws in the same area. So basically, whenever federal powers expand, state powers are diminished.
But what’s sort of interesting about this is that the key arguments of the mandate’s challengers don’t directly address the potential diminution of state power, yet they do seem to deploy federalism, indirectly, in a couple of ways.
One way is as a pseudo-principle of constitutional interpretation: when constitutional authority is in doubt, federalism demands that the doubt be resolved against expansion of federal power. This obviously begs the question (you can’t assume federalism precludes federal expansion if the dispute is about whether federalism permits federal expansion), but is implicit in some originalist arguments against the individual mandate.
Another way is as a means of upping the rhetorical ante: if the commerce power is interpreted to allow “regulation of inactivity,” federalism will be rendered meaningless, challengers say; there will be no “logical limitation” to the expansion of federal power; state power will dwindle; and the whole system will unravel. We will all die, and no one will ever be happy again. Here federalism serves as little more than a diversion into hyperbole.
Best Placard Ever
From Greg Mankiw, via Austin Frakt. This surpasses the brilliant but, let’s face it, self-absorbed “I Have a Sign” on my all-time favorite placards list.
Big MOE
Health and Human Services Secretary Kathleen Sebelius has given the state of Arizona the go-ahead to pare back its Medicaid program by dropping coverage for 250,000 childless adults, a move which could cut the state’s budget deficit in half, saving about $541 million. In general, the Affordable Care Act’s maintenance-of-effort (MOE) requirements make it very hard for states to reduce Medicaid or CHIP coverage—that is, their “eligibility standards, methodologies, or procedures”—any time before 2014. If they do so for any period in the interim, they will lose all federal Medicaid funds for that period.
But Arizona’s current coverage of childless adults is part of a special agreement (known somewhat confusingly as a “waiver” because it operates outside the terms of the State Medicaid Plan) between the state and HHS to expand coverage beyond the minimum essential categories of eligibility. Under certain narrow circumstances, the ACA allows states to let such waivers expire:
During the period that begins on January 1, 2011, and ends on December 31, 2013, the requirement under paragraph (1) shall not apply to a State with respect to nonpregnant, nondisabled adults who are eligible for medical assistance under the State plan or under a waiver of the plan at the option of the State and whose income exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved if, on or after December 31, 2010, the State certifies to the Secretary that, with respect to the State fiscal year during which the certification is made, the State has a budget deficit, or with respect to the succeeding State fiscal year, the State is projected to have a budget deficit.
PPACA § 2001. So, a state can drop coverage for non-pregnant, non-disabled adults with incomes over 133% FPL, if the state has a budget deficit. Only a handful of states extend coverage to childless, low-income adults. My guess is that Arizona is not the only one projecting a budget deficit.
Hat tip Don Taylor.
We Get What We Pay For
Health reform politics can have a bit of a Bizarro World feel to it at times: the ACA saves hundreds of billions of dollars/costs too much; “keep the government out of my Medicare”; and so forth. Aaron Carroll presents another classic of the genre:
Complaints about Medicaid seem to fall into two camps: (1) we need to cut it, and (2) it doesn’t reimburse enough. The odd part is that I often hear these same arguments coming from the same people. Please understand that the reason that Medicaid doesn’t reimburse enough is that it is underfunded. The Medicaid population, on the whole, is sicker and more costly than the privately covered pool. But, because we underfund it, it’s cheaper to put people in Medicaid than to pay for them to get private insurance. The reason that the PPACA puts 20 million more people in Medicaid is that it was cheaper than putting them in the exchanges to get private insurance.
It turns out that Medicaid—despite its problematic duplicity as a state-administered federal law—adheres to the rather non-paradoxical principle of “you get what you pay for.” That’s good to remember. It’s also worth noting that people who are on Medicaid get more than they would otherwise get for the very same dollars spent independently or through a health savings account, as conservative policymakers would generally prefer. That’s a result of the leverage that government has over providers by virtue of being a comparatively large insurer. In other words, this is an area where big government adds value. There are plenty of problems with Medicaid, and reimbursement is low, but the fact that it is a government insurance program that achieves cost-savings on care for the poorest and sickest Americans should not count against it.
An Open Question
When Jonathan Cohn looks at the legal challenges to the ACA, he doesn’t see judicial restraint:
What bothers me (well, one of the things that bothers me) is that so many critics of the Affordable Care Act act as if it is the individual mandate itself, not their interpretation of the constitution, that represents a radical break with the past. I just don’t see that and neither, apparently, do a lot of other people who follow the law more closely than I do.
This bothers me, too. But I’m also bothered that so many ACA supporters cannot see its critics’ legal arguments as anything other than “a radical break with the past.” Virtually no one is willing to admit that the other side’s position is reasonable. Which is fine. Law, like war, is politics by other means, and all that. It’s just that, in this case, there are reasonable legal arguments on both sides, and I don’t think any of them are a radical assault on the Constitution. (Cohn at least admits it’s possible to make an “honest” argument that the mandate is unconstitutional.)
Striking down the individual mandate will certainly have a radical effect on healthcare reform. But the effect on constitutional law will be modest. It will not sweep away the post-New Deal paradigm of constitutional jurisprudence or “unravel the fabric of modern American government.” It will be a rather small tweak of Commerce Clause doctrine which will affect precisely one statute in the entire U.S. Code and will do so in a way that would be laughably easy to avoid in future legislation by acting explicitly under the taxing power. (Political control of Congress is another matter.)
And on the other hand, if the mandate is upheld under the Commerce Clause and/or Necessary and Proper Clause, the Court will strengthen and clarify a doctrine that is, yes, radically different than that which held sway 100 years ago, but only minutely different from what we’ve had for the last 70 years or so. We will be protected from the dread broccoli mandate just as we are today: by the political process. Nothing in the Constitution prevents Congress from enacting a tax scheme consisting of massive transfers of wealth to broccoli consumers at the expense of those who are “inactive” in the broccoli market.
It’s in the meta-narratives that the debate gets so distorted. But I can and do see why people think the individual mandate is a radical break with history. Because it’s different! That is, understood as an exercise of the power to regulate commerce—rather than the power to tax—the mandate is quite unlike anything else the federal government does. It’s a lot like stuff you’d expect to figure into your taxes and a little bit like draft registration or maybe militia readiness in 1792 or whatever. But constitutional law is highly compartmentalized, and none of those comparisons carries over to the Commerce Clause context. In that context, the federal government has never before imposed affirmative obligations upon people not already engaged in the regulated market or related activity in some way. (It is not a given that, because everyone needs healthcare, they will thereby enter or affect the relevant market in the relevant sense.) More plainly, Congress has never before used its commerce power to make just about everybody do something. Quibble if you want, but my point is not that the mandate is unconstitutional because it’s different, but only that the mandate is in fact different.
Whether or not the individual mandate is a valid exercise of the power to regulate interstate commerce is, in the end, an open question.
The Kit, the Caboodle, and Judge Vinson
Judge Vinson’s decision (pdf) to strike down the ACA’s individual mandate was expected, as was much of the substance of his reasoning. Less expected, though not entirely surprising, was the judge’s ruling that the individual mandate was not severable from the rest of the Act and that therefore the entire ACA, including all the parts that are constitutional, would be invalidated.
As I mentioned in my last post (which, incidentally, is now up at Care and Cost), there are a great many provisions of the ACA that have nothing to do with the individual mandate or with health-insurance reform at all. Judge Vinson mentions a few, including one that requires employers to allow new mothers break time for lactation at work. But even the insurance-reform provisions (Title I of the ACA), which are related to the mandate in some sense, are not contingent on the existence of the mandate. There is after all no reason we can’t go ahead and create health-insurance exchanges and subsidize the purchase of insurance for those who can’t afford it, even without a coverage mandate. The only real problem for the viability of the ACA sans individual mandate, I think, would be adverse selection. But that problem arises from specific elements of the ACA’s regulation of insurer risk selection (a.k.a., “cherry-picking”)—namely, guaranteed-issue and community-rating requirements, which make coverage available to any buyer at a uniform price, regardless of the buyer’s health status. Research clearly establishes that regulation of insurer risk selection can lead to serious disruption or market failure in the absence of a well-integrated risk pool or universal coverage.
The problem is, severability analysis does not turn on whether the statute would be workable in the absence of the unconstitutional provision. Workability is necessary, but not sufficient. Unfortunately the analysis has more to do with what, in the judge’s view, Congress “thought” about the importance of the offending provision to the greater statutory scheme. The rule is that the court should sever unconstitutional parts of a law from its valid parts unless Congress would not have enacted the valid parts alone. Thus, as Kevin Walsh notes, severability doctrine calls for a kind of hypothetical, counterfactual inquiry to determine whether the enacting Congress would have preferred the truncated statute, or no statute at all.
The policy choices embedded in the decision about how to sever are legislative judgments, and thus it might seem appropriate for courts to seek guidance in legislative intent. But judges are not well-equipped to reconstruct legislative intent, particularly not counterfactual legislative intent. In fact, no one is well-equipped to do it, for one of two reasons: either because aggregate human volition is indeterminate and time is unidirectional, thus making reconstruction an impossible task; or because “it” is just a meaningless jumble of words. (In the comments, Lee has…er…a pithier take.) What happens instead is judges simply decide and then couch the decision in terms of legislative intent, colored with favorable bits found in the statute’s legislative history.
Severability doctrine is well-settled, but unlovable. As David Gans argues, what’s needed is to shift the standard from one focused on legislative intent to one focused on limiting judicial lawmaking. Rather than focus on what the legislature would have wanted, the courts should focus on how to salvage the statute with minimal judicial intervention.
Sometimes that will mean total invalidation, but only where severance demands massive judicial rewriting of the statute. The risk of total invalidation does give Congress an incentive to attend to the constitutionality of legislation before enactment. And that’s important. But the downside of a total-invalidation approach is the possibility that it would create a chilling effect on legislative innovation. Lawmakers might shy away from solving hard problems with clever new ideas for fear that all their work will be lost if the courts invalidate those new ideas. That would be…not good. Legislative straightjackets are already in ample supply.
Logical Bare Necessities
Andrew Koppelman at Balkinization calls Judge Vinson’s opinion a “bizarre collection of non sequiturs.” I’ve also noticed instances of the opposite: super-sequiturs—conclusions which logically follow from any premise whatsoever because they are necessarily true. Here’s one:
[T]he record seems to strongly indicate that Congress would not have passed the Act in its present form if it had not included the individual mandate.
(p. 66-67 of the opinion [pdf])(oomphasis added). I don’t know about the record, but the law of material equivalence strongly indicates that Vinson is right: if Congress had passed the ACA without the individual mandate, Congress would not have passed the ACA in its present form—with the individual mandate.
Reading more charitably, Vinson appears to be saying that Congress would not have passed anything if it hadn’t passed the package of insurance reforms. But is that right? Obviously we’ll never know. But it’s certainly not necessarily or indisputably right. Here’s Vinson:
Moreover, the defendants have conceded that the Act’s health insurance reforms cannot survive without the individual mandate, which is extremely significant because the various insurance provisions, in turn, are the very heart of the Act itself.
* * *
In other words, the individual mandate is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to the purpose of the Act.
(p. 68, 71). The insurance reforms are in Title I of the ACA. But there are 8 other titles in the ACA, and none of them are directly related to the mandate. Those titles cover Medicare and Medicaid reforms, quality of care, preventive care, the healthcare workforce, innovation, the CLASS Act disability insurance, etc. In terms of page quantity, Title I constitutes around 16%-18% of the whole Act.
It seems to me there are two things going on here. First, Judge Vinson is eliding the relationship between the mandate and the insurance reforms with the relationship between the insurance reforms and everything else in the ACA. The insurance reforms “cannot survive without” the mandate, and they “are the very heart of” the whole Act. Maybe so, but that does not mean the other 8 titles “cannot survive without” the mandate. No doubt the insurance reforms are centrally important. But that does not make them the sine qua non of the rest of the ACA. It seems distinctly possible that, had Congress failed to pass the ACA, it would have tried to save face and pass the less controversial parts of the ACA in a separate bill or two.
Second, Judge Vinson seems to have conflated the severability analysis with the Necessary and Proper Clause analysis. (In fairness, the Administration’s attorneys may have done so, too.) Both can be glossed as an assessment of how “essential” a provision is. But they are really very different. Michael Dorf extricates us from the confusion:
[T]he relatedness threshold for satisfying the Necessary and Proper Clause is lower than the relatedness threshold for saying that a provision of law is non-severable from another provision. In order to find that some measure satisfies the Necessary and Proper Clause, a court need only find that the provision is “convenient” or “useful” for accomplishing an end that is within an enumerated power such as the regulation of Commerce. That language doesn’t come from some post-New Deal/Warren Court expansion of the scope of federal power, but from the leading case on the scope of Congressional power, CJ John Marshall’s 1819 opinion in McCulloch v. Maryland.
By contrast, to find that a provision is non-severable from otherwise valid provisions requires a court to conclude that “the balance of the legislation is incapable of functioning independently.” (That’s a quote from Alaska Airlines v. Brock). That is on its face a tougher test to satisfy than the Necessary and Proper test.
Thus, the government can consistently argue: 1) that the mandate is sufficiently closely related to the other provisions of the Act that the mandate is necessary and proper to the regulation of the interstate commercial market in health insurance; but 2) that the mandate is not so closely related to those other provisions that they are incapable of functioning without it.
In other words, the mandate may be necessary to the implementation of federal regulation of insurance markets without being necessary to the implementation of the other 8 titles of the ACA.
Vinson Analysis Teaser
So, my sister’s third-grade teacher’s spouse declared the health reform law unconstitutional the other day. Now, it really wouldn’t have been a big deal if my third-grade teacher’s spouse or your third-grade teacher’s spouse had declared the law unconstitutional. But my sister’s third-grade teacher’s spouse happens to be federal Judge Clyde Roger Vinson of the United States District Court for the Northern District of Florida, and when he declares a law unconstitutional, there are consequences. Namely, the law actually becomes unconstitutional—nay, it ceases to be a law at all. It is void ab initio, as they say. Like it never existed. Sort of, anyway. At least as far as the parties to that particular suit are concerned. But only in certain jurisdictions. And not if the judgment is stayed. Or the Eleventh Circuit Court of Appeals reverses. Or the Supreme Court…. But still!
Judge Vinson is the second federal judge to strike down the ACA’s individual mandate. But the news is bigger this time, for at least two reasons. One is that there was a lot more skin in this game; 26 state governments and several private plaintiffs joined in the suit. The other reason the news is bigger this time is that Judge Vinson did not simply strike down the section of the law which creates the individual mandate—a.k.a., the minimum coverage provision, §1501(b)—as Judge Hudson had done in the Virginia case. Rather, Judge Vinson struck down the whole thing. All of it. Not just §1501(b). Not just the mandate and related insurance provisions. The entire Patient Protection and Affordable Care Act, in all its glorious 2700-odd pages. Tanning tax, menu-labeling requirements, lactation breaks, and all.
I’ll have something more substantial to say about the decision soon, I hope. But for now I’ll just pass along the best two pieces of one-word analysis I’ve come across:
Brad Joondeph: “Wow.”
Aaron Carroll: “Chill.”
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