Responding to Rep.-elect Andy Harris’ (R-MD) hypocritical demand for government-sponsored health coverage last month, Rep. Joe Crowley (D-NY) circulated a letter among his colleagues calling on Harris and other members of Congress who want to repeal President Obama’s health care law to forgo their own government health care plans. At least four GOP congressmen have already announced they will turn down their congressional benefits, and a recent poll found that a majority Americans “think incoming Congressmen who campaigned against the health care bill should put their money where their mouth is and decline government provided health care now that they’re in office.” In an interview with the New York Times published yesterday, Rep.-elect Joe Walsh (R-IL) has said he too will forgo government health coverage:

And get this: he’s turned down the usual congressional health care, pension and retirement packages.

“I don’t think congressmen should get pensions or cushy health care plans,” he said. His wife is not exhilarated with the latter decision; she has a pre-existing medical condition and is now forced to hunt for a plan.

Walsh’s decision to forgo government coverage is noteworthy because it is extremely unusual. Of the eighty-plus incoming Republican congressmen, all of whom ran campaigns railing against the Affordable Care Act, and the hundreds of incumbent GOP lawmakers, ThinkProgress has been able to identify only five who are willing to put their money where their mouth is and turn down government health care for themselves. This translates to just 2 percent of the 242 GOP House members of the 112th Congress. Moreover, those who have turned down their congressional health plans are either covered by other government programs, such as veterans benefits, or are wealthy, like Walsh, and can afford to pay for their own coverage.

Walsh’s wife, however, may have a hard time finding coverage no matter what she’s willing to pay due to her preexisting condition. If only Congress has passed some sort of law barring insurance companies from discriminating against people with preexisting conditions…

The Affordable Care Act prevents health insurers from cherry picking only the youngest and healthiest applicants by requiring insurers to accept anyone who applies without regard for prior conditions and charge applicants a modified community rate. But the industry is now trying to work its way around this goal and is lobbying the government for more flexibility in designing benefit packages:

America’s Health Insurance Plans and the Blue Cross Blue Shield Association both said in their comments that HHS should tread lightly when defining essential benefits, saying an overly broad policy could raise costs and make the process more confusing for consumers. “General principles and criteria should allow for plan innovation and flexibility to meet evolving market and consumer needs,” BCBSA stated. And AHIP said HHS should “only seek to identify general categories of care, rather than specific health care services.” [...]

But a health policy expert who reviewed the industry groups’ comments said too much flexibility could lead to adverse selection. If the regulations on essential benefits are too lax, the source said, insurers would be able to design their plans to appeal to healthy patients. She said that if HHS only sets broad principles for an essential benefit, leaving it largely to individual plans to determine which services meet those principles, plan design would become a tool for the same type of underwriting that health reform otherwise curtails or prohibits.

Indeed, if one designs a health plan without coverage for an expensive treatment or condition, patients who suffer from that particular ailment will go elsewhere for coverage. Conversely, a plan that offers discounts for gym memberships and focuses on primary care and prevention and is light on everything else, will likely appeal to healthier (read: less expensive) individuals. Given too much latitude, insures have an economic incentive to design the more profitable plan.

As the Center on Policy and Budget Priorities’ Edwin Park put it, “While there is a reasonable argument on the part of insurers that they continue to retain flexibility to design benefits that can improve quality while lowering costs (i.e. value-based insurance design based on comparative effectiveness research), you don’t want them to have so much flexibility that they can continue to compete based on risk-selection, rather than price and quality as intended by the ACA and what is critical for a better functioning health insurance market. ” He added that beneficiaries “wouldn’t want a particular plan claiming it covers one of the enumerated essential benefits like inpatient care and only cover one hospital day, or cover prescription drugs except for all the drugs used by people with HIV/AIDS, cancer, severe heart disease, or certain chronic illnesses like diabetes, etc, or charge much higher co-payments or co-insurance for certain higher cost services required by people in poorer health.”

Of course, all of this is a ways away, but it’s worth reiterating that while the legislative fight may be over, the various interest groups are now gearing up for ways to shift the law in their favor. For their part, insurers are already lobbying to, among other things, delay lowering rates for older people.

It’s expected that Judge Roger Vinson of the U.S. District Court for the Northern District of Florida will rule in favor of the plaintiffs in the multi-state lawsuit challenging the constitutionality of the Affordable Care Act, marking a second win for repeal advocates. During yesterday’s hearing, Vinson sounded increasingly skeptical of the government’s contention that the power to compel individuals to purchase health insurance fell within the purview of the commerce clause:

“In the broadest sense every decision we make is economic. The decision to marry. The decision to keep a job or not has an economic effect,” he said. “If [the federal government] decided everybody needs to eat broccoli because broccoli makes us healthy, they could mandate that everybody has to eat broccoli each week?”

Vinson also questioned the notion that a person who chooses not to buy insurance will necessarily be unable to pay for his or her health care. He himself was uninsured, Vinson said, when one of his children was born, and he paid the entire bill.

“I think it worked out to be $100 a pound,” he said.

But compelling people to purchase health insurance is very different than forcing them to eat broccoli. While a young person may choose to forgo coverage in their 20s, eventually she or he will become sick and will need medical attention. Without the mandate, that individual will either be denied coverage because she or he is too sick (remember, if you lose the mandate, the insurance regulations go with it ) or they’ll be priced out of the market. A recent national survey estimated that 12.6 million adults — or 36 percent of those who applied for coverage in the individual market — were denied insurance “because of a pre-existing condition in the previous three years.” Left uninsured, those 12 million Americans will skip critical doctor visits or avoid treatment, allowing a small medical problem to become a chronic medical condition in need of medical attention. If she or he doesn’t have health insurance, the costs of care are shifted throughout the system – picked up by the government and private premium payers.

One can be respectful of the fact that Vinson was able to afford to pay out-of-pocket for the birth of his child. But I strongly suspect that if there had been complications with that birth, Vinson would have had to go through his savings, or declare bankruptcy. Ultimately any care he couldn’t afford would have been paid by all of us.

Eating broccoli will presumably improve health and eventually lower health care costs, but requiring individuals to do so is fairly coercive and doesn’t present the kind of direct and immediate connection to commerce as encouraging people to purchase health insurance. Brocolli also doesn’t create any kind of cost-shift and is also not something we finance through insurance because food is a predictable expense that is paid in relatively small installments. Health care costs, on the other hand, come at you out of the blue and can be enormous.

You can argue that broccoli and insurance follow the same logical pathway (buying both would lower health care costs), but that doesn’t mean that both would make for logical policy. We can and should distinguish between and make different judgments about the two requirements. That’s why we elect policy makers and listen to judges.

Last night, citing overwhelming opposition from Republicans, Senate Majority Leader Harry Reid (D-NV) dropped the omnibus spending package that included some $1 billion in funding for health reform and instead opted for a much smaller continuing resolution (CR) to extend federal spending authority into the new year.

With the defeat of the omnibus, Republicans are pushing Reid to issue a CR at the 2008 levels, which may not include additional health care dollars since the Affordable Care Act passed after 2008. As Rep. John Boehner (R-OH) put it today in his briefing, “we ought to have a funding bill through September 30th at 2008 levels before the stimulus and before the bailouts and all the other nonsense that’s gone on here.” But all this now raises a key question: how will the government fund implementation?

During an appearance on MSNBC this afternoon, Secretary of Health and Human Services Kathleen Sebelius said that Affordable Care Act included some initial resources for funding implementation but conceded that the department was “waiting to see what our budget overall is going to be”:

SEBELIUS: I think, Andrea, the initial Affordable Care Act passed with some resources included in the bill and we’re going to continue to implement the law. Frankly, Congress hasn’t funded any of government and we are waiting to see what our budget overall is going to be…and I think the debate is on in the Senate whether or not they will take the House-passed continuing resolution, whether they will do a shorter-term continuing resolution. There is no question that the omnibus bill was a bit toppled a bit by the earmarks. [...]

The debate in the Senate has been interesting to watch, but it’s hardly about health reform, it’s really been about the earmarks and how large a funding stream they want to have. I’m hoping that the same logic that Republicans used to pass the tax bill, that businesses needed some certainty, they’ll apply to the government. I think we need some certainty in terms of carrying out key services for the American public over the next year.

Watch it:

Earmarks may have played their part, but Republicans — who will be in charge of appropriating funding in the new year — used the health care funding in the omnibus bill to help defeat the measure. On Tuesday, the Republican Policy Committee issued a report which argued that the bill included $750 million for the new Prevention and Public Health Fund, a $175.9 million “adjustment” to implement the law’s Medicaid expansion and cuts to Medicare Advantage, $80.7 million to enforce new mandates and regulations and $3 million for a national health care workforce commission.

Future appropriations are expected to include a limited amount of health funding, as Republicans in the House have pledged to defund the law.

Today, Judge Roger Vinson heard oral arguments in the multi-state lawsuit claiming that the provision of the Affordable Care Act requiring most Americans to either carry insurance or pay slightly more income taxes is unconstitutional. After the hearing, Florida Attorney General Bill McCollum (R) co-hosted a press conference in which he expressed optimism that the landmark law would be strike down. As part of this conference, however, McCollum attributed an unfortunate view to Judge Vinson:

One of the things he kept saying…was there are other options, aren’t there, besides this approach, besides requiring you to buy health insurance. There are other ways to skin the cat, so to speak. And he said that several times today…like when you go into, I think he said an emergency room, for example, you know, maybe you could, at that point, be required to buy insurance.

Watch it:

Given his role in challenging the Affordable Care Act, McCollum obviously isn’t the most reliable witness. Nevertheless, it would be quite unfortunate if Vinson did actually suggest this alternative mechanism, since it is guaranteed to fail.

The reason why the Act requires people to carry insurance is because the Act also prevents insurance companies from denying coverage to people just because they are already sick. Patients with preexisting conditions cannot be protected unless the law also prevents them from entering the insurance market at the last minute — an act known as “adverse selection“:

This happened because of a phenomenon known as “adverse selection.” Adverse selection occurs when consumers delay purchasing health insurance until they become ill or injured — thus forcing the insurance plan to pay them substantially more in benefits than they previously paid in premiums. When one consumer engages in such a delay, everyone else’s premiums must rise to cover that consumer’s costs. When many consumers engage in this delay, the results can shut down an entire insurance market.

Seven states attempted to ban preexisting conditions discrimination without also requiring everyone to carry a minimum level of coverage, and all of them saw their premiums skyrocket. Several states that tried doing one without the other saw their entire individual insurance market collapse. (Massachusetts, by contrast, enacted a law that was very similar to the Affordable Care Act and its premiums declined by 40 percent in the individual insurance market.)

Yet, if McCollum is to be believed, Judge Vinson floated the idea that the solution to this adverse selection problem is, well, adverse selection.

As Republicans and their Tea Party allies lay out the roadmap for repealing the health care law in January — the current plan would have them voting on full repeal in the first days of Congress, followed by separate votes to repeal individual provisions like the individual mandate and the 1099 requirement — House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) is out with this report explaining why the GOP’s plan to dismantle health reform is “dangerous to America’s health.”

I’ve been arguing that health reform advocates have a real opportunity to use the upcoming repeal hearings and votes as a way to reinforce — unspin, if you will — all of the lies told about reform. Seventy percent of voters who recalled seeing a health reform ad during the midterm elections said it was in opposition to the Obama plan. If the Democrats hope to shore-up support for the measure, they will have to clearly spell out what the law does and how GOP repeal will take all of that away. Stark’s report does just that:

- If Republicans repeal health reform, they will eliminate these new tax credits and the cost-sharing assistance, leaving tens of millions of people unable to afford coverage.

- Simply stated, by repealing health reform, Republicans would cause the deficit to skyrocket.

- To prevent working families from facing crippling medical costs, the health reform law limits what insurers can force enrollees to pay in out-of-pocket expenses and limits their ability to exclude coverage for pre-existing conditions. Republicans would repeal these protections, putting millions of consumers back at risk for bankruptcy if someone gets sick.

- Republicans have promised to repeal the health reform law and thereby eliminate this key coverage improvement – forcing senior citizens and people with disabilities to again pay too much for their life-saving medications.

- Republicans would repeal these small business tax credits – raising taxes on these small businesses which would likely result in them dropping health coverage for their workers.

Look:

Democrats adopted this line of debate immediately after they passed the law and they will need to return to it in the new Congress. The good news is that the American public has always been highly supportive of the individual provisions in the law and health reform advocates need to ensure that everyone understands that that’s what Republicans want to repeal.

This afternoon, following oral arguments in the Florida-based multi-state challenge to the Affordable Care Act, Attorneys General Greg Abbot (TX) and Bill McCollum (FL) held a press conference on the steps of the court house, in which the pair made two very peculiar arguments against the health care law. McCollum bragged that if the mandate is declared unconstitutional, the insurance companies will again be allowed to discriminate against individuals with pre-existing conditions. Abbott complained that the requirement to purchase coverage hindered the freedoms of billionaires:

ABBOTT: There are so many, perhaps millions, who are in their 20s who don’t need access to health care, who may not go get any health care….On the other hand, there are people who are worth billions of dollars who may choose to pay the high end of costs for health care, more than what the average American would have paid and not have any kind of health insurance. They should have the freedom to pursue that path also.

Watch a compilation:

McCollum’s first point about losing the insurance regulations is well taken, but it’s nothing to celebrate. If the mandate is repealed and insurers are required to offer coverage to individuals once they become sick, costs will increase costs for the company and will be passed on to everyone in the risk pool. In fact, I would argue that even if Congress adopts some other alternative to the mandate in an effort to save the insurance regulations– that does half the job of encouraging healthier people to purchase insurance — the industry will lobby hard to also eliminate the protections that allow those with prior conditions to be eligible for coverage.

Lower income Americans with pre-existing conditions will be most affected by this policy change, but for some reason Abbott is much more concerned about the “people who are worth billions of dollars.”

Today, a Republican judge in Florida will hear oral arguments in the most high-profile lawsuit challenging the Affordable Care Act. The crux of the plaintiffs’ argument in that case is that, if the federal government can require individuals to carry health insurance, then it is “difficult to perceive any limitation on federal power,” and this would be inconsistent with the structure of a Constitution that gives the federal government a list of very broad, but not infinite, powers. Libertarian writer Radley Balko frames the same argument somewhat more pointedly:

Putting aside what’s codified Bill of Rights, which was ratified after the main body of the Constitution, do you believe the Constitution puts any restrictions on the powers of the federal government? If your answer is yes, what restrictions would those be?

And what test would you use to determine what the federal government can and can’t do? I’ve written this before, but after Wickard, Raich, and now, if you support it, the health insurance mandate, it’s hard to see what’s left that would be off-limits. I mean, during her confirmation hearings, Elena Kagan couldn’t even bring herself to say that it would be unconstitutional for the federal government to force us to eat vegetables every day.

This claim that upholding the Affordable Care Act would lead to limitless federal power has been a powerful talking point for the far right for quite some time now — but it lacks any basis whatsoever in reality. The truth is any number of essential laws, including laws criminalizing murder, rape, incest or assault, stretch well beyond Congress’ power under existing doctrine.

Because the Constitution speaks of laws that “regulate commerce” and not laws that have only a tenuous impact on the national economy, the Supreme Court casts a skeptical eye on federal laws that are not economic in nature. Thus, in U.S. v. Lopez, the Court struck down a federal ban on guns in school zones; and in U.S. v. Morrison, it struck down a law providing federal remedies to the victims of violence against women.

But if Congress can’t prevent violence against women, it follows that Congress also could not prevent other forms of violence, which is why a federal law criminalizing murder or assault is largely off the table. Congress could enact a limited ban on murder incidental to some of its other powers — because Article I of the Constitution empowers Congress to establish post offices, for example, Congress could make it illegal to kill or assault a postal worker during while they were engaged in their official duties — but a blanket federal law forbidding all murders is right out.

Similarly, consensual sex is not an economic activity any more than the mere act of bringing a gun into a school zone is. For this reason, the once-ubiquitous state laws regulating sexual morality could not be enacted by Congress (even if they weren’t also forbidden by the Fifth Amendment under Lawrence v. Texas). The Commerce Clause enables Congress to regulate the national markets in goods related to sex — pornography, contraception, sex toys and the like — but non-economic sexual morality laws are largely off the table.

Lopez also contradicts Balko’s claim that upholding economic regulations such as the Affordable Care Act would also empower Congress “to force us to eat vegetables every day.” Eating a vegetable, like bringing a gun into a school zone, is not economic in nature, so a federal mandatory eating law does not fit within Congress’ power to regulate commerce. The Constitution gives Congress the power to raise taxes and spend money, so Congress could tax individuals and then use that money to purchase vegetables — something it already does through programs like food stamps or federal school lunch subsidies — but it does not have the power to force anyone to eat those veggies.

One thing that Congress clearly does have the power to do, however, is to regulate the national health insurance market. It just doesn’t follow from this fact that Congress must also be allowed to do anything else.

David Leonhardt has a new column highlighting how the historical tension between the two American traditions of laissez-faire and progressivism have led conservatives to oppose every expansion of the social safety net from Social Security to Medicare, and of course, the Affordable Care Act:

The federal income tax, a senator from New York said a century ago, might mean the end of “our distinctively American experiment of individual freedom.” Social Security was actually a plan “to Sovietize America,” a previous head of the Chamber of Commerce said in 1935. The minimum wage and mandated overtime pay were steps “in the direction of Communism, Bolshevism, fascism and Nazism,” the National Association of Manufacturers charged in 1938.

After Brown v. Board of Education outlawed school segregation in 1954, 101 members of Congress signed a statement calling the ruling an instance of “naked judicial power” that would sow “chaos and confusion” and diminish American greatness. A decade later, The Wall Street Journal editorial board described civil rights marchers as “asking for trouble” and civil rights laws as being on “the outer edge of constitutionality, if not more.”

This year’s health care overhaul has now joined the list.

In this sense, the 20 or so legal challenges and the conservative opposition to reform is in no way unusual. But what’s still unique about this effort, I would argue, is how Republicans are still re-litigating the health reform debate after losing the legislative struggle.

As James Morone — a professor of political science at Brown University — told Lester Feder back in June, “interest groups always continued to fight to get the best deal possible in implementation. But that’s very different from it being Democrats versus Republicans or liberals versus conservatives.” “I’m not sure the Democrats have been quite this insistent after losing legislation. To have the Republican Party be this forceful about a position after the normal political process has run its course is pretty extraordinary.”

And, Republicans are doing all of this with an incredible amount of passion. Repealing the law has become the GOP’s top priority and if you speak to Republican staffers on the hill, they’ll tell you that their bosses will never, ever, accept that reform has become law and will work very hard to repeal the measure. “Why should we accept something that’s unconstitutional,” they ask. There may be a long history of opposition to progressive ideas, but I don’t’ think it’s ever been this well pronounced or coordinated after a major legislative victory.

Earlier today, Republicans twice objected to repealing the 1099 reporting requirement, which would require small businesses to report transactions of more than $600 to the IRS. Sen. Debbie Stabenow (D-MI) tried to attach the repeal provision to the just-passed tax compromise but Republicans — who have argued that the provision would burden small businesses — struck down the request. Separately, Sen. Max Baucus’ (D-MT) attempted to move the Senate to consider a repeal measure was also shot down after Republicans requested to replace his amendment with a Republican alternative offered by Sen. Mike Johanns (R-NE):

STABENOW: I would ask for another 10 seconds to offer a unanimous consent request in order to set aside the second degree amendment to the Reid McConnell substitute to offer an amendment number 4773 that would repeal the 1099 reporting requirement for small business.

KYL: I object.

Watch a compilation of the two objections:

Ultimately, this isn’t very surprising, since Republicans see the 1099 repeal issue as a good way to start the ball rolling on unwinding the health care law and a convenient way to frame their more general argument about the Affordable Care Act. The administration and Congressional Democrats have all condemned the provision as burdensome and overreaching and Republicans are hoping to extend that argument to the entire law. In this sense, the longer the 1099 remains an issue, the better.

What’s more, including the amendment in this tax compromise would could allow both parties to take credit for the measure. Should it pass individually — in the way that Sen. Mike Johanns (R-NE) has suggested — the party can wrap themselves in small business respectability and use it to build momentum to go after other provisions in the law.

The only substantive difference between the Johanns and Baucus amendments is that Johanns is paid for and Baucus isn’t. But given the fact that Republicans supported an overall tax agreement that would add some $850 billion to the deficit, their objection to the Baucus bill shouldn’t be taken too seriously. But even if we do, Johanns can simply do what Baucus tried — go to the Senate floor and attach his measure to the tax agreement. Asked why he’s not interested in doing so, a spokesperson for the Senator said Johanns respects the “framework” of the existing agreement.

Since Judge Henry Hudson ruled that the individual mandate was unconstitutional, several progressives — some of whom have long opposed the measure — proposed alternatives to the provision. Jon Walker of Firedoglake offers the most comprehensive list (which I’ve shortened a bit below):

1. Single Payer/Medicare for all – The constitutionality of the government taxing people and using that money to provide a service is not in doubt.

2. Add a public option or Medicare buy-in – If you want to leave the new health care law basically intact, all you need to do is add a public option or Medicare buy-in.

3. Default enrollment in a basic public insurance plan – Instead of the mandate, the government could create a very basic default insurance plan. If you fail to get health insurance through other means, the government would automatically place you in the default public plan and charge you a special tax to pay for it.

4. Back premium payments – The point of the individual mandate is to eliminate the incentive to hold off buying insurance until you get sick, but this can be dealt with using other systems besides a government-imposed fee for not buying a private product or even a public program.

5. Temporary higher deductibles for late sign ups – If an individual signs up for insurance after previously being uninsured, the company could be given the right to charge them a dramatically higher deductible for the first five months they are insured.

6. Multi-year waiver – This is an idea put forward by Paul Starr that should eliminate Hudson’s constitutional objections. If the individual doesn’t want to pay the mandate penalty, they wouldn’t be forced to as long as they sign away their right to guaranteed issue, community ratings, and subsidies for a set period of time, like five years.

7. Open enrollment period – You can have one month open enrollment period each year. People who sign up that month get the basic rate. The insurance companies would be allowed to charge a set higher premium for people who sign up at any other point for the rest of that year.

8. Extremely strong employer mandate – Even if forcing an individual to buy a private product is declared unconstitutional, it is likely a tough employer mandate regulation couldn’t be declared an over-extension of the Commerce Clause.

Since there is no guarantee that the mandate will pass muster at the Supreme Court, I’m happy to see that we’re discussing alternatives to encouraging healthier individuals to take up coverage and join the risk pool. But it’s worth pointing out that not only are the aforementioned ideas politically unlikely — to put it very mildly — but they would also cover less people than the individual requirement (because of lower participation and higher premiums caused by the lack of healthy people in the risk people.)

I spent some time this morning looking for real coverage numbers, but economists I’ve contacted who typically model these things told me that no such estimate existed. Unfortunately, it is very hard to “score” these alternatives. We know that they would definitely cover fewer people, but we don’t know how many. One big advantage with the mandate is that we have experience in Massachusetts where, as Austin Frakt pointed out yesterday (at the ever expanding Incidental Economist), 98 percent of Massachusetts residents have health insurance.

So, one additional solution would be to encourage states to adopt their own version of the individual mandate. Another, as Aaron Carroll points out this morning, would be to add the “penalty” for failing to buy coverage to the tax deal currently moving through Congress.

But in considering these solutions it’s worth remembering that not all mandate replacements are created equal. Most of these ideas would cover far fewer people than the mandate and would thus create a far less progressive bill than what we have today.

The Hill’s Julian Pecquet reports that in light of Judge Henry Hudson’s ruling to invalidate the individual mandate in the Affordable Care Act, Sen. Tom Coburn (R-OK) is passing around an old Congressional Budget Office (CBO) report touting the deficit savings of eliminating the requirement. The report estimates that the change could “bring in $202 billion from its 2014 start date to 2019,” while causing “the number of uninsured people to increase by 16 million — to 39 million — over the same time period”:

The penalty itself — $695, or 2.5 percent of income, whichever is greater, starting in 2016 — would bring in about $17 billion from 2010-2019, CBO’s scoring window. But that would be more than offset by savings from the millions of people who would choose not to take advantage of federal health programs and subsidies.

According to the CBO, repealing the mandate would reduce the number of people on Medicaid and the Children’s Health Insurance Program by 6 million to 7 million people; reduce those with individual coverage by 5 million; and reduce those who choose employer-sponsored coverage by 4 million to 5 million people.

The savings to Medicaid would amount to about $113 billion, according to CBO, while the government would save another $39 billion in uncollected subsidies and about $60 billion in increased tax revenues linked to the reduction in employer coverage.

First, it’s refreshing to see the Republicans citing the CBO again, an agency they had previously maligned as a group of hardworking geeks who simply do what they’re told and thus produce analysis that is grounded on flawed assumptions that can’t be trusted. Secondly, it’s telling that Coburn is simply dismissing the increase in the uninsured and ignoring the fact that if you eliminate the mandate and remove any incentive for young people to purchase coverage, you’re dramatically increasing the costs for those individuals who need insurance. From the CBO’s analysis:

This adverse selection would increase premiums for new non-group policies (purchased either in the exchanges or directly from insurers in the non-group market) by an estimated 15 to 20 percent relative to current law. Without the mandate, Medicaid enrollees would also have higher expected health spending, on average, than those enrolled under current law.

Coburn’s suggestion that we should lower the deficit by asking the poorest Americans to pay more for health insurance coverage is troubling, no? I would just point out that 18% of Oklahomans live in poverty and 20% rely on Medicaid for coverage. But, at least they’ll be doing their part to pay off the national debt.

Following Judge Henry Hudson’s ruling striking down the individual mandate provision in the health care law, Republicans began clamoring for an expedited review of the law before the Supreme Court. “I call on President Obama and Attorney General Holder to join Attorney General Cuccinelli in requesting that this case be sent directly to the U.S. Supreme Court,” Re. Eric Cantor (R-VA) said in a statement immediately following the release of the decision. Virginia Attorney General Ken Cuccinelli — who filed the suit — made a similar plea at his own press conference yesterday and this morning on Morning Joe, Virginia Governor Bob McDonnell announced that he had written a letter to all the governors in the country asking them to support an expedited process:

MCDONNELL: I’ve sent a letter to every governor in the country asking them — I sent it last week — asking them, regardless of what they thought about the health care law itself, to join me in asking the Supreme Court to take the case directly. In other words, have us bypass the circuit court of appeal, go directly to the Supreme Court. I hope the Justice Department will be open to doing that because we need to get certainty and finality in this suit and know exactly what the law is going to be. Don’t waste another year or two years in litigation, let’s get to the Supreme Court where everyone knows it’s going to be. So I hope we can get that done and get certainty for the businesses and the health care community.

There is nothing terribly wrong with this request, since it probably makes more sense to resolve this question sooner rather than later. Most constitutional experts believe that Hudson’s interpretation will not be upheld, but even if it is, I would argue that from an implementation perspective, it makes more sense to find that we’ll have to make the law work without a mandate now than after the provision goes into effect. And, since a favorable ruling isn’t a sure thing, Democrats that want to meet the goal of covering almost everyone by 2019 better start developing alternatives to the individual mandate today. That’s what Henry Aaron argues at the bottom of this Bloomberg article, “The only way this works is if they offer an adequate subsidy and it’s debatable whether the law currently does that,” he said. “It would be prudent for the White House to start these discussions now.”

Of course, all of this is very unlikely to happen. Politico’s Jennifer Haberkorn and Sarah Kliff point out that the Supreme Court “rarely uses the option, and the Obama administration has already indicated it would not support such a move.” “In a background briefing with reporters last week, Obama administration officials said they do not plan to support an expedited review of the case and called the move ‘premature.’” Former Reagan Solicitor General Charles Fried described the move as unusual saying, “given that the health care mandate doesn’t kick in until 2014, the argument for expediting it is not really strong. It’s quite an unusual thing to do.”

In April, Fried appeared on Fox News to condemn the lawsuits and was so certain that the Supreme Court would preserve the health law, he promised to eat an Australian leather hat on television if the decision is overturned. Now, isn’t that reason on enough to speed up the process?

In his decision striking down the individual health insurance mandate provision of the Affordable Care Act, Judge Henry Hudson rejected the government’s argument that the penalties for failing to buy insurance were a tax and ruled that they were penalties that could not be justified by Congress’s authority to raise taxes for the general welfare. This morning, the crew at Morning Joe accused the Obama administration of playing both sides of the argument: rejecting the Republican charge that the mandate constituted a new tax while it was selling the law, but embracing the claim to defend it in a court of law. Joe played this clip from Obama’s appearance on Good Morning America in September 2009:

OBAMA: Well, hold on a second, George. Here — here’s what’s happening. You and I are both paying $900 bucks on average — our families — in higher premiums because of uncompensated care. Now, what I’ve said is that, if you can’t afford health insurance, you certainly shouldn’t be punished for that. That’s just piling on. If, on the other hand, we’re giving tax credits — we’ve set up an exchange, you are now part of a big pool, we’ve driven down the costs, we’ve done everything we can, and you actually can afford health insurance, but you’ve just decided, You know what? I want to take my chances, and then you get hit by a bus, and you and I have to pay for the emergency room care, that’s…

What it’s saying is, is that we’re not going to have other people carrying your burdens for you any more than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that, if you hit my car, that I’m not covering all the costs.

Watch it:

What Obama told George Stephanopoulos in September is still true today. The individual mandate — originally a Republican idea — is designed to get everyone to take responsibility for their own health and eliminate the cost shifts that occur when individuals receive uncompensated care. “What it’s saying is, is that we’re not going to have other people carrying your burdens for you any more than the fact that right now everybody in America, just about, has to get auto insurance,” Obama said at the time. “Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that, if you hit my car, that I’m not covering all the costs.”

The mandate is not a “tax” in the sense that its primary purpose is to raise revenue even though it meets the legal definition, which is somewhat different than the popular understanding of that term. As Ian Millhiser tells me, conservatives obviously think “that they have caught Obama in some grand contradiction because he uses one meaning of the word ‘tax’ in one context and his lawyers use another meaning of that term in a legal brief, but the word ‘tax’ has an unusually broad meaning in the constitutional context — it can include nearly any provision that adds money to the federal treasury.

Lawrence O’Donnell’s argument (in the clip above) that the mandate doesn’t exist because the federal government can’t enforce the penalties (or tax) that are associated with it, is more straightforward, but overstated. Section 1502 (pg. 170) of the law states, “In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty.” The Secretary also can’t “file notice of lien with respect to any property of a taxpayer” or “levy on any such property with respect to such failure.” However, as IRS Commissioner Doug Shulman noted back in April, the agency can still penalize individuals who don’t comply with the mandate by “reducing or confiscating their tax refunds.” “These are not the kinds of things we send agents out about,” Shulman said. “These are things where you get a letter from us. Congress was very careful to make sure there was nothing too punitive in this bill.”

On a conference call with reporters hosted by the Center for American Progress, Washington and Lee law professor Timothy Jost specifically challenged Judge Henry Hudson’s interpretation of the commerce clause in today’s ruling striking down the individual mandate provision in the Affordable Care Act. Hudson argued that while “[t]he power of Congress to regulate a class of activities that in the aggregate has a substantial and direct effect on interstate commerce is well settled…[n]either the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.”

Jost contended that “the commerce clause nowhere contains the word activity.” “Judge Hudson’s entire decision turns on his conclusion that Congress can only regulate economic activity,” he explained, noting that “what the commerce clause really turns on is economic decisions”:

JOST: The Judge has missed the point of the commerce clause, he also dismisses the Necessary and Proper clause argument, as if the Necessary and Commerce doesn’t exist independently of the Commerce Clause…I think this decision is very defective constitutionally and I believe it will be reversed by the appellate court, certainly by the Supreme Court.

Jost also stressed that this is a decision “solely to the minimum coverage requirement.” In his decision, Hudson severed this provision from any other portion of the law, dealing a defeat to those who hoped to use the ruling to repeal the law’s insurance regulations that require insurers to offer coverage to individuals with pre-existing conditions. “It does not strike down those provisions, I think the point we are making is that as a practical matter it will be very difficult to implement those provisions if healthy people remain outside of the insurance market,” Jost said.

He added that “health insurance is going to be very expensive in the United States if healthy people can stay out of the market and of course with with the new tax credits to finance health insurance, those costs will be passed on to the tax payers, or a lot of them are.” “In aggregate, we are talking about $43 billion in costs that are being transferred to taxpayers, that are being transferred to employers, that are being transferred to people who are responsible and are purchasing health insurance.”

Moments ago, a district judge in Virginia ruled that the Affordable Care Act’s individual requirement to purchase health care coverage violated the Commerce Clause of the Constitution, but did not issue an injunction baring enforcement of the provision. “The power of Congress to regulate a class of activities that in the aggregate has a substantial and direct effect on interstate commerce is well settled,” Judge Henry Hudson — a George W. Bush appointee — writes in the ruling, before adding, “but these regulatory powers are triggered by some type of self-initiated action”:

Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the Minimum Essential Coverage Provision exceeds the Commerce Clause powers vested in Congress under Article 1.

Because an individual’s personal decision to purchase — or decline to purchase — health insurance from a private provider is beyond the historical reach of the Commerce Clause, the Necessary and Proper Clause does not provide a safe sanctuary. …The Minimum Essential Coverage Provision is neither within the letter nor the spirit

The opinion represents a victory for Virginia Attorney General Ken Cuccinelli, but the decision stands alone within the broader context of existing court challenges. Since President Obama signed health reform into law on March 23, opponents have filed at least 20 separate suits against the measure. Federal judges have dismissed 14 of these challenges and at least two separate judges disagreed with Hudson’s interpretation and questioned the merit of the plaintiffs’ claim that compelling individuals to purchase insurance fell outside of the purview of the commerce clause. As Judge George Caram Steeh of the Eastern District of Michigan put it in October, forgoing insurance and putting off needed care only increases the costs of coverage and raises everyone’s premiums:

There is a rational basis to conclude that, in the aggregate, decisions to forego insurance coverage in preference to attempting to pay for health care out of pocket drive up the cost of insurance. The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers. The decision whether to purchase insurance or to attempt to pay for health care out of pocket, is plainly economic. These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance. These are the economic effects addressed by Congress in enacting the Act and the minimum coverage provision.

To be sure, the legal fight is far from over. Hudson’s ruling will be appealed to the 4th Circuit U.S. Court of Appeals and may even end up before the Supreme Court. Appeals are also pending in other circuits and a federal judge will hear arguments Thursday in a challenge brought by a coalition of 20 state attorneys general led by Florida’s Bill McCollum.

[/

Appearing on Fareed Zakaria GPS this morning, former New Jersey Governor and EPA administrator Christie Todd Whitman (R) cautioned Republicans against overreaching in the new Congress, noting that they’re already “misinterpreting this election” by “standing up and saying ‘no’ to everything.” “This idea that compromise is somehow defeat, actually is the antithesis of the way this country was founded,” she noted. Whitman ridiculed the GOP goal of repealing the Affordable Care Act and insisted that “most Americans don’t want the health care reform repealed” — “they want it improved, they want it changed, but they feel, basically, there were some basic changes that needed to be made in it.”

Asked about Sarah Palin’s influence on the Republican party, Whitman admitted that she could “see a scenario” under which Palin can become the party’s nominee for president in 2012, but suggested that she would not be voting for her:

WHITMAN: I don’t think she’ll win nationwide…the base isn’t big enough and Republicans should have learned that…you’ve got to start competing for the center. And so far, I haven’t seen a lot of outreach on the part of Sarah Palin for that. She’s more concentrated on that base and energizing them. Which is fine, but it’s not going to win you a general election.

ZAKARAI: Would you support her?

WHITMAN: If she were the Republican candidate? She would have to show me a lot more than I’ve seen thus far, as far as an understanding of the the depth and the complexity of the issues that we face…the fact that she left office before even completing her first term, is just not an attitude that I think is necessarily in the best interest of your constituents, rather what’s in your own best interest.

Watch it:

Whitman also argued that Republicans would have to raise taxes to balance the federal budget but predicted that the party would vote against any measure that could be perceived as an increase, out of fear that they will be challenged in the primaries by “very strong groups with a lot of money behind them.” “The reality is, yes you are going to spend,” Whitman said. “And how they’re going to balance that — are they going to close down the government every time and just do continuing resolutions for budgets? I think they’ll find that’s not an optimal way to proceed.”

From Gary Strauss at USA Today comes this quite shocking story about how some employers are preserving gold-plated health insurance plans for top CEOs just as millions of workers “face rising health insurance costs and dwindling benefits“:

Though millions of workers face rising health insurance costs and dwindling benefits in 2011, many CEOs will retain employer-paid medical plans and health benefits worth thousands of dollars.

Hundreds of top corporate managers get medical benefits and supplemental coverage far beyond what’s offered to rank-and-file employees. Benefits include “executive” physicals and reimbursements for out-of-pocket costs, deductibles and co-payments, according to corporate filings.

As one source told Strauss, “[t]he great hypocrisy is this is going to the people best able to pay for this stuff.” “Executives should pay for this on their own or be covered by the same plan as everyone else at the company,” Nell Minow of The Corporate Library said. Fortunately, the Affordable Care Act would do just that, prohibiting employers that provide health coverage from limiting eligibility for coverage to highly compensated individuals. (Sec. 2716 of the law or pages 38-39 in this version.) Group plans will not be able to limit eligibility to highly compensated individuals or discriminate through the benefits offered.

All of these bloated packages and perks only increase health care costs and by 2018 they will face the new excise tax and will likely be far less numerous. But for now, companies seem content on offering the policies while most of the workforce is struggling with risking costs.

It’s worth considering Sarah Palin’s new claim that the Independent Payment Advisory Board (IPAB) — one of the few cost control mechanisms in the Affordable Care Act — will lead to “death panel”-like rationing, if only to bury it once and for all for the absurdity that it is. First, look at how Palin described the IPAB in today’s Wall Street Journal editorial:

[The deficit commission] also implicitly endorses the use of “death panel”-like rationing by way of the new Independent Payments Advisory Board—making bureaucrats, not medical professionals, the ultimate arbiters of what types of treatment will (and especially will not) be reimbursed under Medicare.

In actuality, the board is something different. Beginning in 2014 the 15-member board that will offer Congress a comprehensive proposal to reduce excess cost growth in Medicare. As Section 3403 (page 409) of the law stipulates, the proposal cannot “include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums…increase Medicare beneficiary cost- sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria.” When Medicare costs are projected to be unsustainable, the proposal will take effect unless Congress passes an alternative measure that achieves the same level of savings. The deficit commission expands IPAB by allowing it to “make recommendations for cost-sharing and benefit design and to look beyond Medicare.”

But what’s ironic about Palin’s claim is that she makes it in the course of endorsing Rep. Paul Ryan’s ‘Roadmap’. By Palin’s standards, that proposal would have a far more significant effect on denying seniors access to care than anything in the health law. Briefly, under the Roadmap individuals who are age 65 or older in 2020 would continue in the current Medicare program, while those who will become eligible for Medicare after 2020 would be given a voucher with which to purchase private health insurance. Here is how the Congressional Budget Office (CBO) describes the consequences of that policy (pg. 10):

Under the Roadmap, the value of the voucher would be less than expected Medicare spending per enrollee in 2021, when the voucher program would begin. In addition, Medicare’s current payment rates for providers are lower than those paid by commercial insurers, and the program’s administrative costs are lower than those for individually purchased insurance. Beneficiaries would therefore face higher premiums in the private market for a package of benefits similar to that currently provided by Medicare. Moreover, the value of the voucher would grow significantly more slowly than CBO expects that Medicare spending per enrollee would grow under current law. Beneficiaries would therefore be likely to purchase less comprehensive health plans or plans more heavily managed than traditional Medicare, resulting in some combination of less use of health care services and less use of technologically advanced treatments than under current law. Beneficiaries would also bear the financial risk for the cost of buying insurance policies or the cost of obtaining health care services beyond what would be covered by their insurance.

Yesterday, ThinkProgress reported that three U.S. Court of Appeals judges serve on the board of the Foundation for Research on Economics & the Environment (FREE), an organization that “routinely hosts free junkets for federal judges where they can ride horses, bunk with industry attorneys, and learn how to decide environmental cases in ways that benefit FREE’s corporate funders.” Moreover, these three judges, Edith Clement of the Fifth Circuit and Alice Batchelder and Danny Boggs, both of the Sixth Circuit, have remained on the board despite an ethics opinion from a committee of federal judges which unequivocally states that belonging to this board violates these judges’ ethically obligations under federal law.  As the opinion explains, by serving on the board the judges “personally advocate FREE’s values and positions” and thus could create the impression that their “impartiality may be impaired as to certain issues likely to arise in federal court.”

Although FREE’s name suggest that its primary interest is in environmental law, the organization has hosted junkets and published a number of articles on other topics that are likely to arise in pending litigation.  Indeed, some of the views which Judges Batchelder, Boggs and Clement “personally advocate” by serving on FREE’s board raise serious questions about whether their “impartiality may be impaired” in the highest-profile cases in decades — the many lawsuits challenging the Affordable Care Act.

In addition to hosting at least one junket on health reform, FREE has published a number of articles questioning the wisdom of the Affordable Care Act — often telling stories more suited to Glenn Beck’s show than to an organization targeting federal judges.  One of these articles, for example, consists largely of FREE’s board chair reminiscing about the time when “[Saul] Alinsky and his acolyte, Bill Ayers, were mobilizing Chicago through ACORN, the Woodlawn and Gamaliel Foundations, the Weather Underground.”

But what FREE’s articles on the Affordable Care Act lack in coherence they make up for in disdain for “Obama Care.”  One article parrots the claims of Ken Cuccinelli and other anti-health reform plaintiffs who warn that upholding the Affordable Care Act could lead to an unlimited expansion of the federal government — in FREE’s words “[t]hose with an unconstrained vision of the good that government can do see health care reform as an opportunity to increase government’s scope and power.”  Another article mocked the Affordable Care Act’s supporters as “naïve”:

I have intelligent, generally well-informed friends who initially favored various versions of Obama Care. They put hopes and expectations in the same basket. I am hopeful that our impending experiences will change their naïve beliefs in centralized approaches to such complex social systems as health care.

Presently, a Michigan judge’s decision upholding the Affordable Care Act is pending in Judges Batchelder and Boggs’ court, and a similar case could easily arise in Judge Clement’s Fifth Circuit.  If these three judges insist upon remaining on FREE’s board, they should think very hard about the impression of partiality they would create if they are selected to hear these cases.