Yesterday, the Center for Medicare and Medicaid Services (CMS) released a report arguing that under health care reform, “Medicare will save about $8 billion by the end of next year, and $575 billion over the rest of the decade.” The report also found that “[i]mplementing these changes extends the life of the Medicare Trust Fund by 12 years from 2017 to 2029, more than doubling the time before the exhaustion of the Trust Fund.”

Conservatives shot back with an argument perfected by Rep. Paul Ryan (R-WI) during the health care reform debate: the administration double counted savings from the Medicare program by appropriating the same funds to the trust fund and to offset the costs of coverage expansion. During a conference call releasing the study, The American Spectator’s Phil Klein pressed HHS Secretary Kathleen Sebelius on this point and you can read his post on the matter here.

The long and short of it: the administration says that it estimates the effects of the law on the entire federal budget over a 10 year period. Under that scenario, the law increases the cash flow into the Medicare Trust Fund, but since that fund is part of the larger federal budget, some of the funds could be used on other legislative priorities. Klein quotes Jonathan Blum, the director of the Center for Medicare Management for CMS, as saying, “I think it’s been a historical, and longstanding budget convention that when you have less dollars paid to the Medicare program to pay for benefits, there are dollars that accrue to the overall federal treasury, that can be spent for other purposes. And this is an OMB, CBO budget convention.”

Conservatives are arguing that under a different accounting standard — i.e. trust fund account rules — which look at changes over a much longer period of time, the law would not extend the life of the trust fund because it would spend those trust fund dollars on other programs. Klein points to CMS actuary Richard Foster’s previous reports on the health care reform bills as evidence that the CMS itself has predicted much lower savings.

But what’s lost in the debate over which accounting rules to use is the CBO’s and Foster’s habit of underscoring savings from delivery reform. Throughout the health care debate, the CBO and CMS have consistently refused to score savings from payment and delivery reforms, even though they produced savings in the past. For instance, during the 1980s, the government grossly under-estimated the savings from the DRG prospective payment system and then again from the Balanced Budget Act of 1997. Foster’s reports (which Klein cites) omitted “any Federal savings pertaining to the excise tax on high-cost employer-sponsored health insurance coverage, the fees on insurance plans, the excise tax on devices, and other non-Medicare revenue provisions of the PPACA” including system modernization. Conversely, the $575 billion in savings in this report include “quality of care improvements such as reducing the number of hospital readmissions and hospital-acquired conditions; delivery system reforms such as promoting accountable care organizations; pricing reforms such as ending overpayments to Medicare Advantage plans and improving productivity adjustments and market-basket adjustments to provider payments; and a range of provisions to reduce waste, fraud, and abuse.”

One could argue that this report presents a more accurate picture of the possible savings from reform, if it’s properly implemented.

Yesterday, Virginia District Judge Henry Hudson refused to dismiss Ken Cuccinelli’s challenge to the constitutionality of the individual health insurance mandate, ruling that the Supreme Court has never “addressed” whether Congress has the power to regulate “a citizen’s decision not to participate in interstate commerce.” From the Washington Post’s report on this:

Hudson found that Virginia’s challenge is valid because Cuccinelli’s suit was designed to defend a newly enacted state statute that made it illegal to require state residents to buy health insurance. He wrote that the case involves issues of national significance with little precedent, which need a full hearing. He also said there are few precedents for the case and suggested the health-insurance mandate would push the bounds of Congress’s authority to regulate interstate commerce and adopt laws necessary and proper for the general welfare.

“Unquestionably, this regulation radically changes the landscape of health insurance coverage in America,” Hudson wrote in the 32-page opinion. “The Commerce Clause aspect of this debate raises issues of national significance. The position of the parties are widely divergent and at times novel. The guiding precedent is information but inconclusive. Never before has the Commerce Clause and the associated Necessary and Proper clause been extended this far.”

While it’s true that the Supreme Court has never ruled if the Commerce Clause could be extended to the individual mandate — originally proposed in 1994 as a Republican alternative to the Clinton health care plan — precedent certainly suggests that Congress has authority to regulated economic interstate activity. As Elena Kagan explained during her confirmation hearings, “the current state of the law is to grant broad deference to Congress in this area, to assume that Congress knows what’s necessary in terms of the regulation of the country’s economy, but to have some limits.” “And the limits are the ones that were set forth in the cases that you mentioned, the Lopez case and the Morrison case, which are where the activity that’s being regulated is not itself economic in nature, and is activity that’s traditionally been regulated by the states.”

Hudson’s claim that that Congress has never required people to engage in commerce that they aren’t already engaged in is also demonstrably false. As Ian Millhiser explains, Congress relied on this authority to pass historic civil rights legislation: “Segregationists in the Jim Crow South explicitly demanded the right to not engage in commerce. Lunch counter operators wanted to not do business with black patrons. Employers wanted the right to not hire black workers. Realtors demanded the right to not sell certain homes to African Americans. If Cuccinelli’s arguments prevail, it’s unclear how the federal ban on whites-only lunch counters survives the purge.”

Yet, what’s most pernicious about this ruling is that it bolsters a GOP election-year strategy and validates the policy gimmickry that spawned the suit in the first place. Remember, Cuccinelli is claiming that the health care law violates a state measure prohibiting the government from requiring individuals to purchase a health care product. But the injury is self-imposed. Virginia purposely passed a law that contradicted the federal bill, knowing full well that the supremacy clause would invalidate the state law. Now having manufactured the tension out of thin air, the state has a basis, at least according to this judge, to take the federal government to court and engage in the kind of frivolous litigation that Republicans so often deplore. The can run around in the days before November 2 claiming that a judge has ruled that there is merit in their challenge and promise to finish off the law if you only vote for them.

Republicans are using the courts for purely political ends. And while constitutional experts I’ve spoken to believe that the judge’s decision is simply wrong and the case will soon come to end — for instance, he ignored the Supreme Court precedent in Massachusetts v. EPA, which held that the Constitution “prohibits” states from suing the federal government “to protect her citizens from the operation of federal statutes” — the precedent this establishes and furthers won’t lead to good governance.