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How To Read The Fourth Circuit’s Affordable Care Act Decisions

Fourth Circuit Judge Diana Gribbon Motz

Earlier today, the Fourth Circuit handed down two decisions requiring challenges to the Affordable Care Act to be dismissed. The decisions included four separate opinions, including a sharp spanking to Virginia Attorney General Ken Cuccinelli (R), a majority opinion dismissing Liberty University’s challenge to the law on jurisdictional grounds, and two separate opinions saying the law is constitutional. In case you’re confused, here is a handy guide to the opinions:

  • The Cuccinelli Sideshow: Virginia’s attorney general is one of the most strident opponents of the Affordable Care Act, but his case is also the weakest. The Supreme Court held in Massachusetts v. EPA that the Constitution “prohibits” states from suing the federal government “to protect her citizens from the operation of federal statutes” — and Virginia’s lawsuit clearly tries to “protect” its citizens from the operation of a federal law. To get around this problem, Virginia passed an unconstitutional law claiming to nullify part of the Affordable Care Act, and then claimed that this unconstitutional act allows it to make an end run around the Supreme Court’s decision. The Fourth Circuit had no patience for this frivolous argument.
  • It’s A Tax!: The Affordable Care Act’s so-called “individual mandate,” which was challenged in these two lawsuits, requires most Americans to either carry health insurance or pay slightly more income taxes. Because the law does not take effect until 2014, however, no one has actually paid this tax yet and no one will for a few years. The reason why this matters is because the Tax Anti-Injunction Act does not permit plaintiffs to sue in order to prevent a tax from being collected. They can only wait until after they have paid the tax and then sue claiming they are entitled to a refund. Because the mandate is a tax, and because no one has paid the tax yet, Judge Motz held that the Tax Anti-Injunction Act prevents anyone from challenging the mandate.
  • It’s A Tax! And It’s Constitutional!: Judge Wynn joined Motz’ opinion dismissing the case without reaching the question of whether the law is constitutional. He also agreed with the dissenting judge’s argument that the law is a valid exercise of Congress’ power to regulate commerce. Additionally, Judge Wynn argued that the fact that the mandate is a tax is also sufficient reason to uphold the law as constitutional because the Constitution gives Congress the authority to “lay and collect taxes.”
  • Commerce: Finally, Judge Davis dissented from Motz’ conclusion that the law is a tax for purposes of the Tax Anti-Injunction Act. He then explained that he would uphold the law under Congress’ power to “regulate commerce…among the several states.”
  • So, in summary, two judges (Motz and Wynn) voted to dismiss the Liberty University case on jurisdictional grounds. Two judges (Wynn and Davis) also said that they would uphold the law on the merits. As a technical matter, this means that the case was dismissed without an opinion on the merits. As a practical matter, however, a majority of the Fourth Circuit panel unambiguously concluded that the Affordable Care Act is constitutional.

NEWS FLASH

Berwick To Become First Medicare Head To Enroll In Medicare | Medicare chief Donald Berwick turns 65 tomorrow and will become “the first head of the federal health insurance program for the elderly and disabled to be a beneficiary at the same time,” Kaiser Health News’ Phil Galewitz reports. “I look forward to it,” he said of joining Medicare. “I am lucky, I am employed and love my work and have no plans to retire. I see myself working for a long time, but it’s good to know Medicare is there. It’s security and it feels safe.”

GOP’s Fuzzy Math: Super Committee Can Find Savings By Repealing Health Reform

Rep. Michael Burgess (R-TX) called on the super committee to lower the deficit by repealing the Affordable Care Act during a floor speech yesterday, arguing that it could “find the bulk of the $1.5 trillion in budget savings required under the recent deal to raise the federal debt ceiling by cutting back the programs created under last year’s healthcare law”:

“The Select Committee is getting to work, and I encourage both parties, all 12 members, to put the Affordable Care Act on the table, alongside other entitlements in need of reform,” he said on the House floor.

Burgess said other existing programs are on the table in the supercommittee, “so why shouldn’t new entitlements created by the Affordable Care Act be as well?” Burgess cast his proposal as an easy way to cut the deficit, since many of the programs under the law have not yet been implemented. “The Select Committee is getting to work, and I encourage both parties, all 12 members, to put the Affordable Care Act on the table, alongside other entitlements in need of reform,” he said on the House floor.

Burgess said other existing programs are on the table in the super committee, “so why shouldn’t new entitlements created by the Affordable Care Act be as well?” Burgess cast his proposal as an easy way to cut the deficit, since many of the programs under the law have not yet been implemented.

Burgess is certainly no fan of reform, but peeling back a measure that will lower the deficit over 10 years and slow the rate of growth in health care spending is particularly short sighted. If he wants to reduce how much the government spends on health services, then he should be offering a strong public option, a federal exchange, speeding up the delivery reforms, and a host of other cost containment initiatives that would actually save some money. Delaying coverage expansion isn’t fixing anything. It’s only kicking the health can down the road.

Yglesias

Health Care Dysfunction Pushing Disability Program Costs Up

Mathematica Policy Research has a new study out looking at federal spending on working-age people with disabilities that confirms, once again, how fundamental problems in the health care system are to the overall budget. You’ll see that real spending in this area is rising at a likely unsustainable rate:

But that’s not because some striking policy change has made benefits wildly more generous. There’s just a hefty health care component to it:

My takeaway from this is that it once again underscores the need for systematic solutions. The tendency instead is to look for cost-shifting. People look at Medicare costs and say “let’s make patients bear more of the load” or “let’s reduce the number of people who are eligible.” They look at Medicaid costs and say “let’s cover fewer services.” They look at the cost of providing health care benefits to state and local employees and say we need to reduce their compensation. But this exact same problem keeps popping up everywhere. Defense Department spending on health care services is rising at an unsustainable rate. Federal disability spending is rising at an unsustainable rate. But if you look at it, the more statist programs actually do a better job than the private sector of containing costs.

Meanwhile, over in the totally private swathe of the economy where workers are employed by private firms who buy them insurance on the private market health care costs are increasing so fast that they’re eating up all possible compensation gains. You can save the government money by shifting even more costs onto the shoulders of employers or families but that’s just going to crush the economy even harder. We need to actually tackle the underlying drivers—high prices, and poor coordination of care.

NEWS FLASH

Florida Is Actually Not A Good Place To Retire | A new scorecard released by the AARP yesterday “indicates that Florida’s elderly and disabled residents would be best off moving to Minnesota, Washington or Oregon, based on measurements of the quality and availability of help for people who need long-term care.” Florida ranked 35th for health affordability, 37th for choice, 44th for quality, and 41st in caregiver support. Once the nation’s oldest state, Florida is getting younger and has “dropped three places to become the fifth-oldest state in the nation, according to census data.”

Health Care Reform = Jobs

“Since Massachusetts enacted the Health Care Reform Plan in early 2006, total health care employment per capita in the state has grown more rapidly than that in the rest of the country,” new research in the New England Journal of Medicine concludes. “From January 2001 to December 2005, employment per capita grew by just over 8% in both Massachusetts and rest of the country. Subsequently, health care employment grew faster in Massachusetts, increasing by 9.5% from December 2005 through September 2010, while the rate of growth in the rest of the country was 5.5%”:

The data suggests that the Affordable Care Act may similarly accelerate the trend “toward health care’s being the dominant employment sector in the economy,” even if the law’s cost containment provisions produce a slower growth rate. The health care sector is already bucking the national trend, as the industry added 29,700 positions in August.

California Health Insurers Hire Tobacco Lobbyists, Pay Top Lawmaker Tens Of Thousands In Direct Payments

The California Health Plans coalition, representing the health insurance industry, led over 100 opponents of the rate review bill

Last month, a popular reform to grant the California Insurance Commission the power to review and regulate proposed insurance rate hikes died a quick death in the state Senate. Although the bill, Assemblyman Mike Feuer’s (D) AB 52, passed the Assembly and the Senate Health Committee, the legislation was pulled after intense pressure from lobbyists. The California health insurance companies, as well as other health care industries, made AB 52 a top priority for defeat.

As ThinkProgress has reported, health insurance companies have concealed their lobbying efforts by funding many of the so-called “pro-business” trade groups in California, which have in turn lobbied or released letters opposed to AB 52. But a closer look at the health insurance lobby’s disclosure reports paints an even broader picture of their influence:

– State Sen. Ed Hernandez (D), the chair of the health committee, voted for AB 52 but told the press he could not support the bill in its current form. Hernandez’s income is boosted by about $69,000 a year in payments from Kaiser Health Plans, the state’s largest insurer (and one of AB 52′s most prominent opponents) in rent at an office building owned by Hernandez. The unusual arrangement might present a serious conflict of interest, but Hernandez’s spokesman told ThinkProgress that the rent payments began shortly before Hernandez entered the legislature, and that Kaiser maintains a community outreach center in the senator’s building.

UnitedHealth Corporation, a large for-profit insurer with a presence in the Golden State, retained five different lobbying firms this sessions: Capitol Advocacy LLC; Carter, Wetch & Associates; Fernandez Government Solutions LLC; Thomas Advancy; and Terry M. McGann Inc. From January through May, the firm spent $221,481 on lobbying just in California.

– Kaiser Health Plans, the biggest spender of all the major health insurers in California, retained the lobbying firm Carpenter Hawkins Sievers LLC during the fight against AB 52. Last year, during the attempt by oil companies like Koch and Valero to repeal California’s clean energy laws, ThinkProgress profiled Carpenter Hawkins Sievers. Notably, principles at the firm worked for over a decade for the tobacco lobby to kill laws aimed at curtailing indoor smoking, smoking in public areas, and tobacco marketing towards children. Although Kaiser has touted itself as a company that encourages well-being, it is ironic that the insurer would hire slash and burn tobacco lobbyists.

A review of disclosure reports shows Kaiser Health Plans ($4,955,503), Anthem Blue Cross ($2,522,334), UnitedHealth ($1,021,376), HealthNet ($941,489), and Blue Shield of California ($724,412) as the insurers that have spent the most on lobbying since 2009 in Sacramento. The millions dropped on lobbying, like the tens of millions insurers have allocated for lobbying in DC and state capitals across the country, are premium dollars that could have been spent on actual health care.

NEWS FLASH

BREAKING: Fourth Circuit Majority Votes To Uphold The Affordable Care Act | The Fourth Circuit just handed down two opinions ordering that Virginia Attorney General Ken Cuccinelli’s challenge to the Affordable Care Act, along with another challenge to brought by Jerry Falwell’s Liberty University, must be dismissed on jurisdictional grounds. However, Judge Davis dissented from the Liberty University opinion to say that he would reach the merits and uphold the law, and Judge Wynn wrote a separate opinion saying that the law should be upheld as a valid exercise of the Taxing Power. Accordingly a majority of the court voted to uphold the law and today’s opinion should be read as a victory for the Affordable Care Act on the merits.

Romney’s New ‘Pants On Fire’ Lie About Health Care

PolitiFact gives Mitt Romney its “Pants on Fire” certification for his new argument contrasting Massachusetts’ 2006 health care law with the Affordable Care Act. During a presidential forum on Monday — and then again during yesterday’s GOP debate in California — Romney claimed that while he signed a law dealing with just 8 percent of the uninsured population, President Obama “dealt with 100 percent of American people. He said I’m going to change health care for all of you.”

If Romney believes that his law only impacted the state’s uninsured — 8.9 percent in 2006 — then, given the structural similarities of RomneyCare and ObamaCare, he should be comparing Massachusetts’ uninsured population to the national rate of 17 percent — not 100 all percent. But even that is not entirely correct. Both reform laws go beyond just offering coverage — they set minimum standards and benefits for all new policies and ask more of businesses. The Affordable Care Act does even more by implementing a series of payment rand delivery system changes that will hopefully lower the rate of growth in health care spending and encourage doctors and hospitals to prescribe less unnecessary tests and procedures.

But in this new line of attack Romney is pretending that he only enacted the mandate when in reality both his law and Obama’s are a significant downpayment towards improving the health care system — and that’s a good thing.

NEWS FLASH

Health Reform Benefits: 18.9M Seniors Took Advantage Of Free Preventive Services, 1.3M Saved On Prescription Drugs | New data from the Department of Health and Human Services finds that thanks to the Affordable Care Act, more than 18.9 million seniors in Medicare have taken advantage of free preventive services and nearly 1.3 million “have received a 50 percent discount on their brand name prescription drugs when they hit the donut hole, saving a total of $660 million so far this year.” Individuals saved an average of $517 this year. The Centers for Medicare and Medicaid Services also offered a state-by-state breakdown of savings. Delaware saw the largest average discount per beneficiary — $628.51 — while West Virginians saved the least with $351.63 on average per beneficiary.

NEWS FLASH

Study: American Doctors Are Paid Too Much | “American primary care and orthopedic physicians are paid more for each service than are their counterparts in Australia, Canada, France, Germany and the United Kingdom,” a new study published in Health Affairs concludes and attributes the difference to “higher fees, not from higher costs of the doctors’ medical practice, a larger number or volume of services or higher medical school tuition.” “Fees paid by public payers to orthopedic surgeons for hip replacements in the United States are considerably higher than comparable fees for hip replacements in other countries,” the authors found, “and fees paid by private insurers in the United States for this service are double the fees paid in the private sector elsewhere.”

Perry: We Wouldn’t Have As Many Uninsured In Texas ‘If You Didn’t Have The Federal Government’

Texas Gov. Rick Perry (R-TX) blamed the federal government for his state’s high uninsurance rate during last night’s presidential debate at the Ronald Reagan library, arguing that the Department of Health and Human Services has refused to grant Medicaid flexibility to the state:

HARRIS: Governor, quick follow-up. Why are so many people in Texas uninsured?

PERRY: Well, bottom line is that we would not have that many people uninsured in the state of Texas if you didn’t have the federal government. We’ve had requests in for years at the Health and Human Services agencies to have that type of flexibility where we could have menus, where we could have co-pays, and the federal government refuses to give us that flexibility.

We know for a fact that, given that freedom, the states can do a better job of delivering health care. And you’ll see substantially more people not just in Texas, but all across the country have access to better health care.

Watch it:

As much as Perry would like to shift the blame for his state’s high uninsurance rate — in fact, the number of uninsured has increased by approximately 2 million during his 11-year tenure — 26 percent of Texans don’t have access to health care coverage for four simple reasons: 1) many Texas jobs are low wage and don’t offer insurance, 2) Texas has some of the most restrictive Medicaid eligibility rules in the country, 3) insurance rates are largely unregulated (and are higher than the national average) and 4) the state has a large immigrant population that often can’t enroll because of legal concerns or other impediments. Perry himself hasn’t focused on the health care access problem during his governorship, despite advocating for significant reductions in the Medicaid program — including an 8 percent cut in reimbursement rates to hospitals in the latest state budget.

His requests for Medicaid “flexibility” from the federal government are unremarkable. As the Washington Post’s Sarah Kliff points out, aside from a failed 2008 waiver request to “limit the number of beneficiaries and create a new, very sparse benefits plan” — which was too restrictive even for the Bush administration — Perry doesn’t have much to show for his 11 years in office. Perry has failed to implement the policies he has espoused on the national stage (like “state innovation” in health care) and his health care record suggests that outside of some general conservative notions of limiting the reach of the Medicaid program to the very poor and reforming medical liability, he hasn’t emphasized health policy or even bothered to experiment with conservative solutions to expanding coverage and lowering costs. All that as his state is suffering from some of the highest uninsurance rates in the nation. Now what does that tell you about his priorities?

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Morning CheckUp: September 8, 2011

Perry attacks RomneyCare in debate: “I’ll tell you what the people of the state of Texas don’t want, they don’t want a health care plan like Gov. Romney (did) in the state of Massachusetts…We would not have that many people uninsured in the state of Texas if you did not have the federal government (in the way),” Perry said 20 minutes into last night’s debate. {Politico]

Blames federal government for high number of uninsured: “We’ve had a request in for years at Department of Health and Human Services to have that type of flexibility, where we could have menus, where we could have co-pays, and the federal government refuses to give us that flexibility,” Perry said. “We know for a fact that, given that freedom, the states can do a better job at delivering that healthcare and you’d see more people — not just in Texas, but across the country, have access to better healthcare.” [Sam Baker]

Democrats on the House Ways and Means Committee detail health savings for the super committee: “Instituting a market basket freeze for post-acute providers in fiscal 2012 and 2013, recouping Medicare overpayments to nursing homes from this fiscal year and incorporating value-based purchasing and a readmissions program for skilled-nursing facilities are among the new potential deficit-cutting health care savings that the debt limit “super committee” may consider in the coming month.” [Inside Health Policy] Read the full list here.

Government cracks down on fraud: The Medicare Fraud Strike Force has filed charges “against 91 defendants, including doctors, nurses, and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $295 million in false billing.” [HHS]

Medical inflation is eating up income gains: A new study published in the September issue of Health Affairs found that “the annual income of the average American family of four increased to $99,000 in 2009 from $76,000 in 1999. But nearly all that increased income was consumed by higher healthcare costs. [Modern Healthcare]

Fewer seniors are falling into the doughnut hole: “The number of beneficiaries enrolled in Medicare Part D drug plans that fall into the “doughnut hole”—a coverage gap that requires enrollees who do not qualify for a low-income subsidy to pay the full cost of their drugs—has decreased from 26% in 2007 to 19% in 2009, according to a study.” [Modern Healthcare]

Study finds increases in number of underinsured: The number of underinsured adults—those with health insurance all year, but also with very high medical expenses relative to their incomes—rose by 80 percent between 2003-2010, from 16 million to 29 million, according to a new Commonwealth Fund study published in the September issue of Health Affairs. Nearly half (44%) of U.S. adults—81 million people—were either underinsured or uninsured in 2010, up from 75 million in 2007 and 61 million in 2003. [Commonwealth Fund]

Abortion docs suing Kansas over clinic regulations say they may drop suit: An attorney for two doctors who are suing block strict new Kansas regulations for abortion providers said Wednesday that they would consider dropping their case if the state Department of Health and Environment scaled back the requirements. [AP]

Congress opts out of considering Wyden-Brown opt out bill: “The Republican presidential candidates have been pushing for a state-based approach to health reform — but a Senate proposal to allow that to happen through the national health reform law has vanished from the congressional agenda. That’s because the proposal — a bipartisan bill by Sens. Ron Wyden (D-Ore.) and Scott Brown (R-Mass.) — didn’t allow the sweeping Medicaid changes Republicans want and didn’t come along at a time when either party wanted to reopen the health care law.” [Politico]

Woman whose husband joined Army to get health coverage dies from cancer: “In 2009, the Watertown, Wis., family made international news when Bill Caudle, laid off from the plastics company where he’d worked for 20 years, and facing dramatic increases in the cost of health insurance, took the unusual step of signing up for a four-year stint in the Army. His decision meant that in order to get coverage for Michelle, he would have to leave her side for the first time in her then three-year battle with cancer.” [Milwaukee Journal Sentinel]

Health reform may lead to more jobs in health industry: A new study found that “health-care employment climbed 9.5 percent per capita in Massachusetts from December 2005 to September 2010, outpacing 5.5 percent growth in the rest of the U.S.” “New jobs in administration drove rising health-care employment, wrote Douglas Staiger, an economist at Dartmouth College in Hanover, New Hampshire, and colleagues.” [Bloomberg]

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