Judges don’t tip hand in Obamacare hearing

ADDED at 3:55 p.m.: C-SPAN is streaming the hearing here.

ORIGINAL POST:

Anyone expecting to get a hint as to which way three appellate judges will rule on the Obamacare lawsuit brought by Georgia and 25 other states was surely disappointed today. The two hours scheduled for arguments stretched into two and a half hours as the judges grilled both sides but didn’t tip their hands.

The panel of the 11th U.S. Circuit Court of Appeals, hearing the federal government’s appeal of a ruling from a U.S. district judge in Florida that declared the entire health-reform law unconstitutional, seemed most interested in these questions (listed in no particular order):

  • Could they throw out the individual mandate and leave all or most of the rest of the law intact? (The acting solicitor general, Neal Katyal, begrudgingly said only a few of the other provisions would have to be excised if the individual mandate were eliminated; attorneys for the 26 states and the National Federation of Independent Business insisted the individual mandate is crucial to the entire law, including its expansion of Medicaid, and that it’s all or nothing.)
  • Has there ever been a Commerce Clause case like this one — in which the federal government ordered private individuals to purchase a private product — and, if not, is that because health insurance is a unique service or because Congress is trying to expand its powers? (Neither side could offer a precedent wholly analogous to this one. The government predictably argued that health insurance — actually, health care; more on the distinction in a moment — is unique while, as one would expect, the plaintiffs pointed out that the Constitution had existed more than 220 years before Congress attempted such a compulsion.)
  • As I alluded, the distinction between health insurance and health care figured prominently. The government and the judges noted that the plaintiffs concede Congress could regulate the method of payment for health care; the plaintiffs’ distinction was that, at that point, the consumer had entered the market for health care.
  • The government pounced on Judge Frank Hull’s question, based on the Supreme Court’s ruling in the Raich case, as to whether we aren’t an “instant away” from requiring health care, and whether it wouldn’t be appropriate for Congress to regulate “method of payment” well before health care was needed. The plaintiffs maintained that compulsion is not the same thing as regulation; that Congress instead could have offered incentives for people to purchase and use insurance as their method of payment, as it has done in every other instance of encouraging a particular behavior; and that insurance of any type (life, auto, flood, etc.) is inherently an “instant away” product.
  • As an aside, when the incentives bit came up, I wrote this in my notes: “You can lead a horse to water, but you can’t pry open his mouth and shove a water hose down his throat.” Not quite what the original aphorism says, but a succinct summary of what the plaintiffs — rightly, imo — argue.
  • It was unclear how impressed the judges were by the government’s argument about cost-shifting, in which Katyal said unpaid medical bills by the uninsured shifted $43 billion a year in costs to those with insurance. Hull pointed out that $43 billion is just 1.7 percent of the $2.5 trillion Americans spend on health care each year. The plaintiffs maintained that the individual mandate was an unconstitutional way to solve the problem.
  • The judges seemed preoccupied with the question of whether there could be any real limits to Congress’ power under the Commerce Clause if Obamacare were upheld. My sense is that Katyal did not alleviate those concerns.

I’ll add more as I go back through my notes. Gun to my head, I’d predict two and possibly all three of the judges declare the mandate unconstitutional, along with perhaps some directly related insurance reforms (e.g., guaranteed issue), and may also throw out the Medicaid expansion — which is the bulk of the states’ case but hasn’t gotten as much attention as the mandate — but will not declare the entire act unlawful.

And then, in a prediction I’d just about bet the house on, this case will go to the Supreme Court.

[NB: I've fixed a few typos throughout since this was first posted.]

– By Kyle Wingfield

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69 comments Add your comment

GTT

June 8th, 2011
2:21 pm

EUROPA

June 8th, 2011
2:21 pm

The concept of american exceptionalism should be followed by a laugh track. The greediest most corrupt nation on Earth needs a enema. Killing and stealing, not baseball, are america’s favorite past-time(s)…

Don't Tread

June 8th, 2011
2:40 pm

Obamacare represents the greatest liberal power grab to date, and they will fight for it to the death.

Intown

June 8th, 2011
3:00 pm

“The plaintiffs maintained that the individual mandate was an unconstitutional way to solve the problem.”

So what is their solution? Don’t provide healthcare to the indigent and uninsured?

Johnny Angel

June 8th, 2011
3:03 pm

Did no one make the argument that the charitable conservatives would take care of all the needy sick and that the bankruptcy courts could take care of the rest once we have the proper tort reforms in place to protect the innocent!

Dave R.

June 8th, 2011
3:04 pm

How does one “regulate” that which is not purchased? It would be unprecedented for any court to rule that failure to purchase a private product comes under the term “regulating”. You are no longer regulating the product, but the individual.

Even the much-vaunted Commerce Clause doesn’t apply here.

jm

June 8th, 2011
3:22 pm

Kyle, part of me has my fingers crossed in favor of striking down Obamacare. Another part of me understands perfectly well why the individual mandate is there. Medicaid, in my mind, is also a big and bad part of it.

I really do think letting the states figure this out is the best decision. That way, parts of the country with different beliefs can have it their way (local control) and, the laboratory of state government can help figure out best practices…. if the Feds get out of the way (see Medicaid block grants).

jm

June 8th, 2011
3:28 pm

States rights!

Ivan

June 8th, 2011
3:35 pm

@Intown

The lawyers are making their case, and the judges are trying to determine, whether or not the current proposal is constitutional.

They’re not there to propose a solution.

Whatever is determined, it’ll go to the Supreme Court. I wonder though, if this is deemed unconstitutional again, will that have an affect on the Supreme Courts decision.

Bryan G.

June 8th, 2011
3:55 pm

@ intown – to parrot what Ivan said, it’s not for the lawyers to propose a solution. The problem is that the solution that was passed is not Constitutional. We can debate the merits of the plan, but there’s really no debate on the individual mandate being an UnConstitutional power grab

Johnny Angel

June 8th, 2011
4:01 pm

Hull pointed out that $43 billion is just 1.7 percent of the $2.5 trillion Americans spend on health care each year.

And $500 billion is just 20 percent. What’s your magic number. At what level will it no longer be deemed fair to have the insured population pick up the tab for the uninsured and underinsured.

Lee Weber

June 8th, 2011
4:03 pm

Excellent synopsis on a short deadline, Kyle. Thanks for posting. I’m interested in knowing whether your legal experts / sources think this case will be on the USSC docket for next term….could make for a super exciting campaign season.

jconservative

June 8th, 2011
4:04 pm

As I noted on the Goodman blog, the current Supreme Court tends toward being a big central government court. This court also does not shy away from legislating if it is required to reach the decision they want.

So anything is possible.

Any idea when the 11th Circuit will release its decision? Would the loser ask for a “reading” by the entire 11th Circuit?

Johnny Angel

June 8th, 2011
4:08 pm

I have not seen any Supreme Court ruling declaring the individual mandate unconstitutional and there is no debate on that point.

Bart Abel

June 8th, 2011
4:15 pm

RE: “It was unclear how impressed the judges were by the government’s argument about cost-shifting, in which Katyal said unpaid medical bills by the uninsured shifted $43 billion a year in costs to those with insurance. Hull pointed out that $43 billion is just 1.7 percent of the $2.5 trillion Americans spend on health care each year.”

Details matter here. Cost shifting is when health providers charge more for goods and services to make up for losses for treatment of uninsured patients who can’t pay for some or all of their services out-of-pocket. (Remember that most providers do bill and collect as much as possible for uninsured patients.)

The estimated 1.7 percent cost shifting referenced above is one of several estimates, and it is limited to private health insurance premiums only. It’s very important to note that this estimte does NOT include costs shifted to taxpayers via Medicaid and Medicare, nor does it included costs shifted to patients who pay some or all of their medical expenses out-of-pocket.

With regard to premiums, Families USA estimated that family premiums averaged over $1,000 higher as a result of cost shifting. Kaiser lowered this estimate to 1.7 percent of higher health insurance premiums because…and this detail is important…Kaiser found that government was paying a lot more for uninsured care than Families USA had found.

So, this 1.7 percent figure is highly misleading and significantly understated. We pay more for health care as a result of cost shifting via our health insurance premiums, through our taxes, and through our out-of-pocket payments.

Democrats will win

June 8th, 2011
4:17 pm

I will be filled with unadulterated glee when both the circuit court and the supreme court rule both the mandate and the broader act completely constitutional. And I look very forward to watching the collective right wing apoplexy it induces.

Kyle Wingfield

June 8th, 2011
4:19 pm

Johnny Angel @ 4:01: The difference is that the 1.7 percent is a real number, as opposed to the 20 percent figure you made up. Also, we will pay a lot more than $43 billion — in taxes, higher insurance premiums, etc. — in an effort to eliminate that cost-shifting. And @ 4:08: Of course you haven’t seen one yet…the legal challenges are still making their way through the judicial system. But it will happen.

Lee and jconservative: No indication from the court as to when a ruling will come, so there’s no way to say when it’ll go to the Supreme Court. As for a reading by the entire 11th Circuit: I would guess it depends on which side loses, and when the ruling comes. The “when” part, of course, alludes to the 2012 election calendar. Will the loser want a Supreme Court hearing, and possible ruling, as the presidential election is going on? Or would they prefer to keep it at the appellate level — and thus in less of a spotlight? It probably also depends on what happens with other cases in other circuits. In short: Who knows?

Johnny Angel

June 8th, 2011
4:24 pm

Kyle,

I think I’ll take Bart Abel’s 4:15 over your explanation that I (quite obviously) simply made up a number for the purpose of argument, an argument that you chose to ignore by attacking the hypothetical number. How clever of you, Kyle. Is that really your best.

Lee Weber

June 8th, 2011
4:33 pm

Now that I think about it, I’d bet we’ll get a quick ruling in an attempt by the 11th to finish quickly and forward to the USSC for the 2012 term. Judges aren’t immune to political motives and the speed of decision and timing of a forwarded case is less likely to raise cries of judicial bias than what actually ends up in the decision.

But your point about the plaintiff’s desire / timing of an appeal is well founded. Seems the gov’t wouldn’t push an appeal for the 2012 term. I know there are other cases pending at the appellate level in other circuits, and I’d assume in some of those cases the plaintiff defendant roles are reversed.

Here’s hoping the case makes the 2012 docket one way or the other…

Are any of those cases

Johnny Angel

June 8th, 2011
4:35 pm

And of course my 4:08 was in response to that 3:55, Kyle, in case you missed that point.

retired early

June 8th, 2011
4:52 pm

Please tell me what is wrong with making people pay their own way for health care. Would you also like to go back to voluntary auto insurance. The person who crashes into you with no insurance, so you have to pay the entire bill for their mistake. Same with health insurance…a perfectly healthy person refuses to buy health insurance…gets in an accident, crippled for life…who pays the bill. We do, and you anti Obamacare thinks thats fair.
Healthcare cost are increasing at double digits each YEAR…Obama is trying to find a solution before it alone, bankrupts this country and stagnates the economy even further. Please people, try being part of the solution to our country’s problems, not simply opposing ANYTHING Obama proposes because he’s not from your party.

thebob.bob

June 8th, 2011
4:57 pm

Why not just have the government pay for health care and tax everyone to pay for it ….. like every other modern industrialized country. They have better care, better outcomes and it costs less.

Or does ideology get in the way here?

Rafe Hollister

June 8th, 2011
5:09 pm

Hopefully it will be ruled unconstitutional. If not the Federal Government becomes even more powerful and suffocating.

Someone had a good idea that we need to let the states handle the uninsured problem. Take all those Billions, Barry says we are going to “Save” and parcel it out to the states. Let them decide how to spend it. In states that favor the cradle to grave nanny state, like CA, NY, and MA, they can put a special tax on NRA memberss, global warming skeptics, people in the military, or golf cart emissions and put up complex programs for the moochers. Maybe all the moochers will be overwhelmed with those services and move to those states.

Kinda like the Lost Boys of Sudan moved from Georgia to Connecticut because their moocher benefits were better.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

June 8th, 2011
5:18 pm

If the court votes to uphold the entire law, will Anthony Weiner send out a new round of photos showing his, uh, excitement?

ew.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

June 8th, 2011
5:21 pm

And if the courts repeal the law, will Weinern stiffen, uh, his resolve to fight for it?

MrLiberty

June 8th, 2011
5:22 pm

They are waiting for the suitcases of cash from the administration (or the death threats to their family members, or the threats of IRS audits or whatever else this dictator wishes to throw at them).

[...] to local news reports, questioning centered around whether it would be possible to throw out the individual mandate and [...]

retired early

June 8th, 2011
5:26 pm

For those who believe they are protecting their “individual rights” by opposing Obamacare, I will state the obvious.
What is the most powerful lobby in America…the AMA, ie doctors. Who has the most to gain by keeping the status quo in healthcare…the doctors…whose incomes will continue to rise regardless of the economy, if we make no changes in healthcare. Who is trying to kill Obamacare…the GOP. Now, why would they be against the common man who will continue to pay more each year into those doctors and insurance companies bank accounts…because thats who pays for their campaigns to stay in office.
The GOP proposal to solve the problem is mostly with “tax credits”. So, the doctors still can raise their fees, the insurance companies still can make record profits….the cost will keep rising and the government will take in LESS revenue because of these Tax deductions. That approach only satisfies the doctors and the insurance industries…it does NOTHING to solve the problem.
They would have you, the common man, believe this is about “individual rights”….no, it is about one thing and one thing only…..MONEY.

MrLiberty

June 8th, 2011
5:31 pm

Oppostion to Obamacare does not imply in any way an acceptance of the status quo as OK. The system is functionally broken because of SO many things all of which tie back to government. Whether it be tax incentives, insurance monopolies, insurance regulations, the FDA, the AMA and its control over professional licensure in every state, the role of professional licensure as a means to create a medical monopoly for the AMA and conventional doctors, the DEA, the War on Drugs, Medicare, Medicaid, government unions, etc. etc. the Federal Reserve, etc..etc. ……

We need to get government COMPLETELY OUT OF MEDICINE and restore a truly free and competitive market. Then we will absolutely see change for the better.

THE "REAL" TRUTH

June 8th, 2011
5:41 pm

KYLE, Here’s a way out of all this for everyone… Republicans do not want the mandate to purchase insurance, so, Nationalize it. Problem solved. No one forces you to “purchase” insurance. The healthcare is available to everyone. It’s either that or expect, no… gaurantee HIGHER and EVEN HIGHER premiums from the ones that you Republicans protect.

Jus sayin’… because there is no way to fix this short of that.

retired early

June 8th, 2011
5:43 pm

Mr Liberty

You just stated that “the AMA is in control…”
Then you say the government needs to get “completely out of medicine”.
That’s a contradiction. Nevertheless, the AMA has gotten everything they want from government…bought and paid for. Now, if you had to have surgery, would you rather use a medical practice with no oversight…at all… and no accountability. should they botch the surgery and leave you crippled for life.
Then they charge you for multiple unnecessary test with impunity…that is want you want. Not me, because unlike you, I don’t think all doctors are saints, I think they are humans.

Lil' Barry Bailout

June 8th, 2011
6:02 pm

EUROPA: Killing the job-creating entrepreneurial spirit and stealing the profits of those few businesses able to generate any are the Democrats’ favorite past-time(s)…
——————–

Fixed.

old timer

June 8th, 2011
6:10 pm

Bob Bob…countries that have universal health care do not always have better care…Do some talking to the British, the Canadians…They are learning the hard way it is not working.

[...] to local news reports, questioning centered around whether it would be possible to throw out the individual mandate and [...]

Michael H. Smith

June 8th, 2011
6:30 pm

As I noted on the Goodman blog, the current Supreme Court tends toward being a big central government court.

Like they did in the Arizona case and now the Hazleton case, in view of that Arizona decision? :)
That decision favored the State’s Right to license and license in support of federal laws.

This Supreme Court is the most conservative one the country has seen in years. It is by no means oblivious to State’s Rights and the limited (very limited) powers granted to the central federal government by the Constitution. No power to regulate the absence of commerce was granted to the federal government.

If obumer thought he had this one in the bag so to speak he would not have delayed it going to the Supreme Court. He is nervous with very good reason – he’s going to lose.

Michael H. Smith

June 8th, 2011
6:35 pm

old timer, the U.K. is starting to privatize parts of the socialized system.

lil' bush da' draft-dodger

June 8th, 2011
6:37 pm

Delta, typical republican corporate greed. Nothing (not even patriotism) stands in the way of the profit motive.

Michael H. Smith

June 8th, 2011
6:38 pm

The U. S. will do fine, in fact it will do better without socialized single payer medicine. Survival of the U.S. will depend on a number of things and none of them will be Socialism.

MarkV

June 8th, 2011
6:38 pm

This is a fascinating era I the history of the US, and the fight about Obamacare is an entertaining and thought-provoking subject for blogs. But from the practical point of view, one can view this as a bumpy road to an inevitable end. Sooner or later, if the US is to survive, it will have a universal health care/single payer system along with every other developed nation.

Johnny Angel

June 8th, 2011
6:53 pm

Given the number of “ugly” people involved in U.S. politics, I would suggest at least some form of government subsidized healthcare covering cosmetic surgery. It’s the least we can do for them.

[...] to local news reports, questioning centered around whether it would be possible to throw out the individual mandate and [...]

tar and feathers party

June 8th, 2011
7:54 pm

Lauren McDonald of the psc can kiss my ASSets, I am not paying for pie in the sky solar power! Get your tar and feather ready, because if that clown forces GP to build solar power and sends me the bill, he is getting a ride out of the state on a rail!

fair and imbalanced

June 8th, 2011
7:57 pm

Mob rule,,,er..I mean states’ rights!

Lil' Barry Bailout

June 8th, 2011
8:16 pm

MarkV: Sooner or later, if the US is to survive, it and its citizens will have to pay their bills, which pretty much rules out any trillion-dollar socialist health care power grabs.
————————-

Fixed.

Drifter

June 8th, 2011
8:31 pm

First, it’s not Obamacare. Obamacare would have been a lot different. What we’ve got is a whole lot of nothing that isn’t going to address the horrible health care situation in this country in a meaningful way. If you had told me 10 years ago that the Democrats wanted people to pay their own way and the GOP was against that, I would have called you crazy. It’s a topsy turvy world.

Lil' Barry Bailout

June 8th, 2011
9:06 pm

BS. If democrats wanted people to “pay their own way”, Obozocare wouldn’t cost a trillion dollars.

lil' bush da' draft-dodger

June 8th, 2011
9:11 pm

lil’ b,

i hope your gonads are fixed, i’d hate for you to reproduce (another aryan nation douchebag)…

Fixed.

Lil' Barry Bailout

June 8th, 2011
9:12 pm

Correction…Obozocare will cost two trillion in just the first decade after it is implemented in 2014 according to the CBO. Just who is it that is “paying their own way”?

Put down the Koolaid, liar.

Drifter

June 8th, 2011
9:15 pm

Were you aware there’s an individual mandate in “Obamacare”? The thing the GOP claims to hate the most. I guess if people decide to be irresponsible and not buy their own health insurance, I get to pay their way when they get sick.

Jefferson

June 8th, 2011
9:16 pm

You hear about the bitchin’ and cryin’ over the health care bill, but where are the bills to improve it, solve the problems… no — just politics and no credibility.