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Boehner Invents New Constitutional Doctrine Out Of Thin Air To Challenge Health Reform

House Minority Leader John Boehner’s (R-OH) passionate opposition to the notion that all Americans should be able to afford health care was apparent long before his orange-faced “Hell No You Can’t!” rant against the Affordable Care Act, so it should come as no surprise that he has signed an amicus brief challenging the ACA.  Anyone who is actually familiar with the Constitution, however, would be quite surprised by the arguments Boehner’s brief makes.  Indeed, the presumptive Speaker-elect appears to have invented an entirely new theory of the Constitution out of thin air in order to claim that the ACA is unconstitutional.

To be sure, there aren’t exactly any good arguments against the constitutionality of health reform.  As conservatives are so fond of pointing out, health care spending makes up about one-sixth of the U.S. economy, and even ultra-conservative Justice Antonin Scalia agrees that Congress has sweeping authority to regulate the economy.  Boehner’s brief nonetheless claims that the law’s minimum coverage provision — the provision requiring almost all Americans to either carry health insurance or pay slightly more in income taxes — exceeds Congress’ power under the Constitution.

As MIT economist Jonathan Gruber explains, this provision is essential to any health reform package that forbids discrimination against persons with preexisting conditions:

Insurance companies are also prohibited from excluding coverage due to preexisting illnesses.  This is a highly popular reform, but it doesn’t work in a vacuum. If insurance companies must charge the same price to people whether they’re sick or healthy many healthy people will view this as a “bad deal” and not buy insurance. This results in higher prices that chase even more people out of the market. The result is a “death spiral” that leads only the sick to purchase insurance at very high prices. Several states tried such community rating reforms—offering health insurance policies within a given territory at the same price to all persons without medical underwriting—in their nongroup markets over the past two decades, and sharp rises in insurance prices ensued along with rapidly shrinking market size.

The fact that the minimum coverage provision is essential to making sure the rest of the bill functions properly has constitutional implications.  A provision of the Constitution known as the Necessary and Proper Clause provides that Congress has the power “[t]o make all laws which shall be necessary and proper for carrying into execution” its power to pass economic regulation.  In Justice Scalia’s words, this means that “where Congress has the authority to enact a regulation of interstate commerce, it possesses every power needed to make that regulation effective.”

Boehner’s brief, however, essentially asks a Florida trial judge to rewrite this Necessary and Proper Clause to place a new an unheard of limit on Congressional authority.  Under Boehner’s reasoning, a law can only be enacted under the Necessary and Proper power if some other law would become “legally ineffective” without it.  Needless to say, Boehner fails to cite a single case supporting this claim.

The reason why Boehner can’t find such a case is because none exists.  There is, however, a Supreme Court case called Sabri v. United States, which completely eviscerates Boehner’s legal claim.  In Sabri, the Supreme Court held that — even though there is nothing in the Constitution expressly authorizing Congress to enact an anti-bribery law — Congress may still invoke its Necessary and Proper power to forbid people from bribing state officials in order to protect federal money that is entrusted to the states.  Under Boehner’s reasoning, Sabri could not have come down the way that it did, since an anti-bribery law is hardly essential to making a grant of money to the states “legally effective.”

Since Boehner is expected to lead the House of Representatives for the next two years, America can only hope that he doesn’t take the same careless attitude towards lawmaking that he does towards the Constitution.

A Comparison Of The Health Care Sections In All 3 Deficit Reduction Proposals

Earlier today, the Bipartisan Policy Center released a new set of recommendations to offer a “comprehensive plan to dramatically reduce America’s deficits and debt and strengthen our economy, enabling the nation to reclaim its future.” The report, titled, “Restoring America’s Future,” is now the third proposal that tries to balance the deficit by purportedly making the kind of difficult decisions that elected officials usually try to avoid. Earlier, the two chairmen of the President’s Fiscal Commission — former Sen. Alan Simpson and former White House Chief of Staff Erskine Bowles — released their draft recommendations for how Congress can achieve “nearly $4 trillion in deficit reduction through 2020″ while reducing “the deficit to 2.2% of GDP by 2015” and Rep. Jan Schakowsky (D-IL) — a member of the committee — issued her own progressive alternative. White House Budget Director and Federal Reserve Vice Chair Alice Rivlin, who helped author the BPC proposal, is also a member of the President’s Fiscal Commission.

What follows is a partial comparison of the health care sections in the three available proposals: the Simpson/Bowles report, Rep. Jan Schakowsky’s (D-IL) progressive proposal, and the Bipartisan Policy Center’s latest report:

Simpson/Bowles Proposal Schakowsky’s Proposal Bipartisan Policy Center’s Proposal
Cost Sharing in Medicare Replace existing cost-sharing rules with universal deductible, single
coinsurance rate, and catastrophic cap for Medicare Part A and Part B.
Does not specify. Increase Medicare B premiums from 25 to 35 percent.
Building on ACA Expansion of successful payment reforms, stronger Independent Payment Advisory Board (IPAB), tort reform, inserting a public option into the exchanges and all-payer rate setting. Robust public option tied to Medicare rates, reduce exclusivity period for biologics from 12 to 17 years, Medicare price negotiation for drugs, establish a Medicare-administered drug plan to compete with private plans. Tort reform to cap non-economic and punitive damages. Federal government will provide grants to states to test other models.
Doc Fix Replace cuts required by SGR through 2015 with modest reductions while directing CMS to establish a new payment system, beginning in 2015, to reduce costs and improve quality. Does not specify. The Task Force plan “accommodates a permanent fix” to the sustainable growth rate (SGR) mechanism, but does not provide additional details.
Tax Exclusion for ESI Capping the tax exclusion “for employer-provided health care at the amount of the actuarial value of FEHBP standard option. Does not specify. Cap the exclusion of employer-provided health benefits in 2018, and then phase it out by 2028.
Long Term Savings

Places a “global target” for total federal health expenditures after 2020 (Medicare, Medicaid, CHIP, exchange subsidies, employer health exclusion),” keeping growth at GDP plus 1%. Does not specify. Beginning in 2018, would limit the rate of increase of federal spending per beneficiary to 1% above the growth rate. Medicare beneficiaries would be charged higher premiums if costs rose faster. Also in 2018, begin reduce the amount by which Medicaid is growing faster than the economy.

By far the biggest disappointment of the BPC proposal is this idea of transitioning Medicare into a “premium support” program. Not only does that undermine the entire concept of social insurance, but it also transfers the entire cost of coverage to the individual. That is, if your costs exceed GDP plus 1%, you are on the hook for paying for the remaining health care expenditures.

Compare that with the more tame Simpson/Bowles approach. First, Simpson/Bowles considers the growth of Medicare, Medicaid, CHIP, exchange subsidies, and employer health exclusion in setting their target. BPC, only looks at Medicare. Simpson/Bowles triggers various policy options if costs increase faster than the GDP+1 target. Under the BPC proposal, the only option is higher premiums. The former requires the President to submit and Congress to consider reforms to lower spending like increasing premiums, overhauling the fee-for-service system, developing premium support for Medicare, adding a robust public option, and/or expanding IPAB.

The BPC’s Medicaid proposal is more interesting. The committee feels that states are gaming the shared financing arrangement between states and the federal government — by finding creative ways to increase their federal matching rate — and proposes an alternative that would allocate a complete component of the Medicaid program to each payer. Under the arrangement, the state, for instance, would fully finance and administer CHIP or long-term care, while the federal government would pay for all disabled beneficiaries in the program. This, BPC believes, would encourage both the state and the federal government to control spending in their respective section and thus lower spending. This idea has been around since the 1990s but it’s unclear that it would save money since each payer would still have to deal with rising costs in their particular section of the Medicaid program.

Update

Merrill Goozner catches an important oversight in my analysis and argues that the Simpson/Bowles proposal is worse:

The Bowles-Simpson plan would cap Medicare expenditures at GDP+1 percent after 2020, which leaves no room for the increase in the number of beneficiaries that is expected in future decades. The number of elderly will rise from 13 percent of the population today to 22 percent in 2050. Rivlin-Domenici, on the other hand, will increase spending PER BENEFICIARY by GDP+1, which is much less onerous. Still, as you point out, it is essentially privatization of Medicare, as will be explained tomorrow in my piece in The Fiscal Times. Nice chart otherwise, though.

Republicans Waste Time Complaining They Don’t Have Enough Time To Question Berwick

This afternoon, Center for Medicare and Medicaid Services (CMS) chief Don Berwick — who was recess appointed by President Obama — appeared before the Senate Finance Committee to answer questions about the agency’s progress in implementing the Affordable Care Act. Since Obama first nominated Berwick, Republicans accused the physician and former Harvard professor of rationing care, denying payment for treatments based on cost effectiveness and mirroring reform on the British model. They’ve repeatedly asked for Berwick to testify before Congress and today was their first opportunity to question him publicly.

Health care reporters expected the much-anticipated hearing to take the form of a duel between Republicans, who wanted to use their time to build opposition to the law, and Democrats, who saw this as an opportunity to make their argument against repealing it. But this morning, neither side had enough time to plead their case.

Finance Committee Chairman Max Baucus (D-MT) ended the hearing after just an hour and 20 minutes, citing a pending vote. And even though senators from both parties had approximately five minutes each for questions, Republicans wasted a remarkable amount of time complaining they wouldn’t have enough time to ask their questions:

SEN. CHUCK GRASSLEY (R-IA): “There is at least 70 minutes of questioning here and we have votes starting at 11. So I was wondering if you you’d commit to appearing again before the committee after the Thanksgiving break so that we’d all had a chance to ask the questions we want to ask.”

SEN. PAT ROBERTS (R-KS): “Five minutes, obviously I can’t do this, I have other obligations, I have to leave and I apologize for that.”

SEN. ORRIN HATCH (R-UT): “This is pathetic…my gosh we ought to have time to ask the most important man in America on health care questions that are relevant and important.”

SEN. JIM BUNNING (R-KY): “The opening statements took almost 30 minutes, although Senator Baucus won’t make a commitment to have you come back to testify before the end of the year, I can assure you will not get special treatment next year.”

Watch a compilation:

Baucus did not commit to holding hearings with Berwick after Thanksgiving, but said, “it is my intention to have a good number of hearings, because it’s very important for this committee to hear from the CMS administrator about his plans.”

During the hearing, Grassley also questioned Berwick about potential conflicts of interest, Hatch asked about so-called double counting of Medicare savings, and Bunning demanded to know why Berwick had accepted a recess appointment. On the Democratic side, Sen. Debbie Stabenow (D-MI) had Berwick explain the consequences of repealing the law and Sen. Ron Wyden (D-OR) extracted a commitment to focus on state innovation. You can read Berwick’s opening statement here.

Insurers Spent $86 Million To Undermine Health Reform

We knew that health insurers pay dues to the Chamber of Commerce, contribute money for “special projects” and funneled millions for ads designed to undermine health reform, but today Bloomberg’s Drew Armstrong has put a firm number on these contributions, reporting that health insurance companies “gave the U.S. Chamber of Commerce $86.2 million” in premium dollars to “oppose the health-care overhaul law”:

The insurance lobby, whose members include Minnetonka, Minnesota-based UnitedHealth Group Inc. and Philadelphia-based Cigna Corp., gave the money to the Chamber in 2009 as Democrats were increasing their criticism of the industry, according to one person who requested anonymity because laws don’t require identifying funding sources. The Chamber of Commerce received the money from the Washington-based America’s Health Insurance Plans when the industry was urging Congress to drop a plan to create a competing public insurance option.

The spending exceeded the insurer group’s entire budget from a year earlier and accounted for 40 percent of the Chamber’s $214.6 million in 2009 spending. The expenditures reflect the insurers’ attempts to influence the bill after Democrats in Congress and the White House put more focus on regulation of the insurance industry.

The $86.2 million paid for advertisements, polling and grass roots events to drum up opposition to the bill that’s projected to provide coverage to 32 million previously uninsured Americans, according to Tom Collamore, a Chamber of Commerce spokesman. The Chamber used the funds to “advance a market- based health-care system and advocate for fundamental reform that would improve access to quality care while lowering costs,” it said in a statement.

Indeed, insurers spent millions in hopes of moving the bill further to the right and poisoning the public and political atmosphere for progressive proposals like the public option and national health care exchanges. The point wasn’t so much to kill the entire health reform bill — insurers knew they could benefit from the individual mandate, for instance — as it was to weaken it. As Wendell Potter describes in his new book, insurers were concerned about public opinion surveys which showed that Americans supported greater government involvement in the health care system because they feared the new regulations that came with it. Since the release of Michael Moore’s Sicko, the industry became interested in convincing Americans that the government should stay out of the health care system and the Chamber served these ends. And had its impact.

The negative advertising and “grass roots events to drum up opposition to the bill” are at least partly responsible for reform’s low approval ratings. Roll Call has previously reported that medical interests spent “more than $876 million in lobbying expenses during the 15 months beginning in January 2009 and ending in March, when Congress passed the sweeping overhaul” and were “responsible for one out of every five dollars doled out on lobbying during that period.” That report found that insurers spent just $11.5 million on the campaign.

Of course, opposition to reform hasn’t abated since the bill became law. As the New York Times has pointed out, “opponents of the legislation, including independent groups, have spent $108 million since March to advertise against it” — “six times more than supporters have spent, including $5.1 million by the Department of Health and Human Services to promote the new law.” As a result, voters saw negative, and often times inaccurate, representations of reform, with 70% reporting that the ads they saw were in opposition to the Affordable Care Act.

In that context, it’s surprising that public support for the law is as high as it is (hovering around 40 percent), having withstood two separate smear campaigns against the effort.

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