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Author Topic: Supreme Court and the Individual Health Insurance Mandate  (Read 20309 times)
Ogre Mage
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« Reply #75 on: March 30, 2012, 01:27:28 am »
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On the medicaid issue, Roberts may be the key vote. The other four "conservative" justices seem to loathe it. Roberts mused that the states should hardly be surprised that once they started taking "boatloads" of federal money (boatloads was a term introduced by Kagan) to finance a big chunk of medicaid, they should hardly be surprised when the Feds started leveraging it to make them into puppets on a string. Good point.

I think the states' argument with regards to the Medicaid expansion is quite weak.  They are saying, in effect, that being offered vast sums of federal money to spend on poor people's health care is "coercive," even when they have the option to opt out.  Even the conservative 11th Circuit, which struck down the insurance mandate, did not buy the states' argument on Medicaid.
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Torie
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« Reply #76 on: March 30, 2012, 09:02:33 am »
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You guys I think are making a policy argument rather than a legal one. And SS is a tax.
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« Reply #77 on: March 30, 2012, 11:22:41 am »
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You guys I think are making a policy argument rather than a legal one. And SS is a tax.

Yep.
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« Reply #78 on: March 30, 2012, 01:56:58 pm »
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If the government is so committed to making people buy into the private health insurance market, why not voucherize medicare and medicaid?
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« Reply #79 on: March 30, 2012, 02:13:03 pm »
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You guys I think are making a policy argument rather than a legal one. And SS is a tax.

What's the legal principle behind the abhorrent-ness of the so-called cross-subsidy?

Yes SS is a tax, but why shouldn't the substantive similarity between this and that count when considering the question of whether this fundamentally changes the relationship between the individual and the government (or the states)?
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Torie
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« Reply #80 on: March 30, 2012, 02:40:55 pm »
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You guys I think are making a policy argument rather than a legal one. And SS is a tax.

What's the legal principle behind the abhorrent-ness of the so-called cross-subsidy?

Yes SS is a tax, but why shouldn't the substantive similarity between this and that count when considering the question of whether this fundamentally changes the relationship between the individual and the government (or the states)?

There is no limiting principle to the reach of interstate commerce if it can force people into commerce with the purpose of cross subsidization. That applies to any good, and is not sui generis to health care.

The Feds have the power to tax (it's in the Constitution); they don't have the power to regulate commerce that is not interstate.

That's the law. What the public policy justifications are or lack thereof for all these distinctions is another issue, not relevant to the evaluation as to whether the mandate at the moment is in fact legal.

Now moving on the the medicaid expansion, I think it is clear that it is not Constitutionally impermissible  "undue coercion" of the States. For "undue coercion to be in play, the Feds must threaten to take away something from the states to which they are otherwise entitled, and States are not entitled to Federal funds. I suppose one could argue that if the feds enact a law that they will stop giving funds to the State for program X, unless the States do Y, with program Y being wholly unrelated to doing X (we will take away your medicaid dollars unless you enact capital punishment for certain kinds of murders), that there might be a problem still. SCOTUS however has rejected even that. It is only when the Feds tell States to X with no money, of they will suffer some penalty not involving the withdrawal of federal money, that there is a problem.

But here we don't even have an X versus a Y. It's all X. When the Feds are merely restructuring a program for which they are already handing out funds, just changing the rules to get the funds, no, clearly, that is not undue coercion. If it were, once the Feds start handing out money for something to the states, they would be hard pressed to ever restructure it in a way that would cause the states to bear more of the burden.

This issue isn't even close.
« Last Edit: March 30, 2012, 04:36:17 pm by Torie »Logged

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« Reply #81 on: March 30, 2012, 06:04:48 pm »
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The good in question isn't health care, per se. It's health insurance. Some form of cross subsidy is inevitable in insurance. That's the whole concept; some people will come out winners, others losers, but the value added is derived from the reduction in risk at a lower cost than if everyone simply saved on their own. The concept is inherently tied up in the nature of the good being offered. Hence it's fundamentally different from all other markets where the absence of cross subsidy does not prevent the market from operating.
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« Reply #82 on: March 30, 2012, 07:30:37 pm »
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Beet is correct. The government hasn't randomly chosen a group to subsidize and one to take more from. They are making sure the risk pool is large enough, with those not posing high risk to the system paying enough in so that those in the high risk pool can afford to get coverage. And where this differs fro say car insurance, is that you can argue one may never pose high risk to the system since they may never get in an accident or get a ticket, but in healthcare you will get old and pose enormous risk to the system. Everyone is in that boat.
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« Reply #83 on: March 30, 2012, 08:05:37 pm »

And yet in auto insurance, the insurers use age to categorize drivers and the premiums they pay.  Middle age drivers do not subsidize either the young reckless (but not wreckless drivers) or the old slow-reaction drivers.  There is no inherent reason why a health insurance mandate should act as a means to transfer risk from one age group to another.
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« Reply #84 on: March 30, 2012, 08:09:22 pm »
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Christ we try to do one little thing and they can't help themselves and burn it to the ground.
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« Reply #85 on: March 30, 2012, 08:35:21 pm »
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The mandate isn't that everyone must pay the exact same premium; it doesn't prevent insurers from doing what auto insurers do. The difference between this and auto insurance is, again, everyone is in the market whether they like it or not, only they do not participate in it properly, and this has a direct impact on those that do participate in it properly. If the purpose of regulation is to ensure the proper functioning of markets, then the mandate can be seen as a regulation necessary to the proper functioning of this market. Unless you think we should just let people die on the street.
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Nym90
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« Reply #86 on: March 30, 2012, 08:50:04 pm »
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As a matter of moral principle, why is it permissible to provide a good in the public sector and require it to be paid for via a tax, but improper to require it to be purchased in the private sector? As a matter of liberty, at least in the latter scenario you can choose who to acquire the service from.

Now, you may say that I am not making a legal argument, but I don't see this as a question of law. It is a question of proper policy and should be left to those intended to make policy decisions: Congress and the President.

The whole point of the individual mandate was as a compromise; achieve universal coverage through the private sector, instead of via the public sector as many progressives such as myself would've vastly preferred.

The idea that the mandate somehow fundamentally transforms the relationship between citizens and the government is bizarre to me; it certainly transforms it far less than Social Security, Medicare, Medicaid, or any other multitude of federal programs.

The decision as to whether this bill represents a bridge too far is best left to elected officials who are ultimately responsible much more directly to the voters. If Americans really want this bill repealed, they are more than welcome to elect a Republican President and elect sufficient numbers of Republican Senators to achieve a 60 seat majority in the Senate this fall so that they can repeal it (a Democratic President and 60 Democratic seats in the Senate being how we got it in the first place, of course).

Another interesting question; if the whole bill is struck down, what happens to portions of the bill already implemented such as monies already allocated and doled out by the Feds? Would states be required to pay back the money or do they get to keep it?

Yet another reason why Congress should be the one to repeal this bill, so that these questions can be asked of them by the voters, and the decision of what to replace the bill with (if anything) made by the executive and legislative branches.
« Last Edit: March 30, 2012, 08:51:54 pm by Nym90 »Logged
Torie
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« Reply #87 on: March 30, 2012, 08:51:10 pm »
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The good in question isn't health care, per se. It's health insurance. Some form of cross subsidy is inevitable in insurance. That's the whole concept; some people will come out winners, others losers, but the value added is derived from the reduction in risk at a lower cost than if everyone simply saved on their own. The concept is inherently tied up in the nature of the good being offered. Hence it's fundamentally different from all other markets where the absence of cross subsidy does not prevent the market from operating.

There is no limiting principle there. That is true with any good. Just force folks into the market to get the price down and cross subsidize with price fixing.

I can understand why defenders of the mandate want to revert to policy, rather than focus on the law, the Constitutional law. Yes, it is clear via taxation that the government can get to the same place economically. But with one you are doing it with carrots (a tax credit), offset by taxes on everyone, and in the other you are forcing folks into commerce. They are supposed to buy health insurance and break the law if they don't, and get fined. Allowing the government to force people into commerce to make goods cheaper or for cross subsidization purposes effectively renders the concept of limitations of government power vis a vis the states a dead letter.

Anyway, absent a clear limiting principle on the cross subsidy, I think the odds are almost certain that Kennedy will strike it down. There is no limiting principle, and he wants one. And the cross subsidy is not random. The program deliberately makes the young as an age group pay a lot more than they otherwise would, and the old less, so there is age discrimination. There may also be a subsidy for the uninsured or the insured who pay high premiums because they got insurance when they were sick which is paid by everyone less sick in some proportion. But it doesn't matter, the principle is the same.

What the Constitution demands as interpreted is not always the same thing as good public policy. As I have said, to me good public policy is to do away with the concept that the states can do things the feds cannot entirely.
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« Reply #88 on: March 30, 2012, 09:06:38 pm »
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The good in question isn't health care, per se. It's health insurance. Some form of cross subsidy is inevitable in insurance. That's the whole concept; some people will come out winners, others losers, but the value added is derived from the reduction in risk at a lower cost than if everyone simply saved on their own. The concept is inherently tied up in the nature of the good being offered. Hence it's fundamentally different from all other markets where the absence of cross subsidy does not prevent the market from operating.

There is no limiting principle there. That is true with any good. Just force folks into the market to get the price down and cross subsidize with price fixing.

Except that Congress requires hospitals to provide care for life threatening conditions regardless of ability to pay and without subsidy. In other markets, Congress does not force suppliers to provide the good. It does not say, "if people want to buy cars, then they will pay full price, but people who do not buy cars must nonetheless be given one if they need it to get to their job." Health insurance is the only type of insurance market where the good in its most valuable form must be provided regardless of whether the recipient has paid for it.

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They are supposed to buy health insurance and break the law if they don't, and get fined.

I asked this question upthread, if not buying insurance actually criminalized you, or if it simply meant you make a choice to pay the penalty. I'd like some more clarification on this. Does it make you commit a misdemeanor, if you choose to pay the penalty?

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The program deliberately makes the young as an age group pay a lot more than they otherwise would, and the old less, so there is age discrimination.

How deliberately? Age is only significant in that it is a factor that affects an individual's risk. But there are hundreds if not thousands of factors that affect individual risk. Everyone has a different level of risk. I don't see how age is unique here.

Also, what Nym is saying... yes, there is a Constitutional issue and Constitutional law is different from good policy, we get that. But the law also deals with reality, and terms such as 'liberty' also have a substance to them. They mean something in the real world. So if this mandate is substantively the same as a tax then the law should consider that.
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Torie
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« Reply #89 on: March 30, 2012, 09:10:20 pm »
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On to severability.  I am also quite certain that SCOTUS is just going to get rid of the mandate, and the waiver of pre-existing conditions, and the risk pool, as suggested by the government. The balance of the law will work just as badly without those three elements as it did before. Nobody argued for more going down than just those three, except for those arguing that the whole thing should go down. I did not hear one reason why the whole thing should go down, other than otherwise the court has to read the whole law and figure it out for themselves. Garbage. Sure maybe other portions should, but if not brought to the court's attention as to what they are and why, they certainly must not be very compelling. Call it a waiver if they are out there.

Does anyone think that forcing insurers to keep kids on the policy until 26 has anything to do with the mandate?  Of course not. The concept of just throwing out the whole law is ludicrous.

Beet, one more time. Yes the free rider issue is unique, but you can't bootstrap off that to then say OK we make people buy insurance to deal with the free rider because its unique, and a unique problem because of the inability to pay, and since we can do that, well we will make them cross subsidize too! The sky is the limit now baby.  No, you just allow the exception of forcing folks into commerce to and only to the extent it addresses what is unique, rather than with that leak in the dam, then the feds can do whatever they want that is not unique now that folks have been forced into commerce just to make sure they won't be deadbeats, disrupting the system.

Anyway, whether you agree or not, Kennedy is never going to buy it. If he does, I will be shocked.

Oh, I never argued age is "unique."  Where did that come from? I just said that when the government forces healthy people into the system, and makes them pay more than they would in an open market, that is a cross subsidy. Most of those people are young, and the schedule for what they have to pay the most onerous, as compared to healthy older people. They are going to get soaked. Someone should tell them before the election about that, or tell them just how 'lucky" they are that the mandate was tanked.

Finally nobody thinks requiring folks to go into commerce and fining them if they do not as law breakers is the same as a tax legally. Well next to nobody, including all 9 justices who don't think it is a tax. Congress doesn't think it is a tax either. By the way, would you argue it is a tax if the penalty is execution, or is it just a tax when the penalty is a fine?  Anyway if forcing folks into commerce via fines because they are taxes, then federalism is indeed totally dead.

You boys are stubborn!  What am I going to do with you?  Smiley
« Last Edit: March 30, 2012, 09:28:55 pm by Torie »Logged

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« Reply #90 on: March 30, 2012, 09:35:15 pm »
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Well, young people are also disproportionately uninsured, so they would benefit from having insurance, and they're disproportionately low income, so they would receive a large share of the subsidies going out under the law.

I'm just saying that dealing with the free rider problem and the cross subsidization effect cannot be separated out from one another. If one agrees that Congress is within its rights to deal with the free rider problem, then I argue that the cross subsidization effect is necessary proper for it to carry out that function. Because without it, then there is literally no way to deal with the free rider problem. And arguably, the emergency healthcare mandate to hospitals is a cross subsidy in the other direction, from those on insurance to those not on insurance, so all this is doing is righting the boat that was unbalanced by that earlier mandate.

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Anyway if forcing folks into commerce via fines because they are taxes, then federalism is indeed totally dead.

How is federalism dead? I really don't understand the federalism angle too well.
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Torie
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« Reply #91 on: March 30, 2012, 09:54:13 pm »
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Without cross subsidies, you can't deal with the free rider problem?  Really?  You must make them buy insurance to deal with the free rider (not cross subsidies), and if they can't afford it, you subsidize the purchase with a tax credit. Where do you get the money for the tax credit? From taxing the rich more of course!  Isn't that what you guys think is the best public policy anyway, rather than overcharging healthy people for health insurance, mostly younger people? 

Anyway, I'm done and rest my case. I think I have addressed everything at this point, and some more than once, twice, and maybe even three times now.

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« Reply #92 on: March 30, 2012, 09:59:57 pm »
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You must make them buy insurance to deal with the free rider (not cross subsidies), and if they can't afford it, you subsidize the purchase with a tax credit.

Uhhh okay... I don't see the difference between this and what ACA actually does, but I'm just a stupid layman.
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« Reply #93 on: March 30, 2012, 10:03:39 pm »
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You must make them buy insurance to deal with the free rider (not cross subsidies), and if they can't afford it, you subsidize the purchase with a tax credit.

Uhhh okay... I don't see the difference between this and what ACA actually does, but I'm just a stupid layman.

The difference is the price of the premiums, and it is a huge difference - to fund the cross subsidy as well as pay your own way, and not be a free rider.

Anyway, it's been fun. Thanks for listening.
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« Reply #94 on: March 30, 2012, 10:27:53 pm »

Except that Congress requires hospitals to provide care for life threatening conditions regardless of ability to pay and without subsidy. In other markets, Congress does not force suppliers to provide the good. It does not say, "if people want to buy cars, then they will pay full price, but people who do not buy cars must nonetheless be given one if they need it to get to their job." Health insurance is the only type of insurance market where the good in its most valuable form must be provided regardless of whether the recipient has paid for it.

If hospitals were to opt out of the Medicare and Medicaid programs, they could choose to not provide free treatment for life-threatening conditions.  The requirement on the hospitals is because of their voluntary participation in those programs.  If you're going to argue that it isn't voluntary, then that would mean that the States have a chance to get the court to rule in their favor on the Medicaid changes.

There are already a fair number of doctor practices that opt out of Medicaid and some that opt out of or limit Medicare participation.  There is a limit to how much blood can be squeezed out of that turnip before some hospitals decide not to participate in those programs.
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« Reply #95 on: March 31, 2012, 12:18:27 am »
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The good in question isn't health care, per se. It's health insurance. Some form of cross subsidy is inevitable in insurance. That's the whole concept; some people will come out winners, others losers, but the value added is derived from the reduction in risk at a lower cost than if everyone simply saved on their own. The concept is inherently tied up in the nature of the good being offered. Hence it's fundamentally different from all other markets where the absence of cross subsidy does not prevent the market from operating.

Anyway, absent a clear limiting principle on the cross subsidy, I think the odds are almost certain that Kennedy will strike it down. There is no limiting principle, and he wants one. And the cross subsidy is not random. The program deliberately makes the young as an age group pay a lot more than they otherwise would, and the old less, so there is age discrimination. There may also be a subsidy for the uninsured or the insured who pay high premiums because they got insurance when they were sick which is paid by everyone less sick in some proportion. But it doesn't matter, the principle is the same.

And those who are sick should not pay significantly more. Should someone who has had seizures since they were a little child have to pay more than others in their age group? And speaking of age, yes there should be some cross subsidization from the young to the old. And one day we will get old and get subsidized by the young. That's how this works. Yes, you can charge the old more, but then it becomes hard for many to afford insurance.
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« Reply #96 on: March 31, 2012, 12:25:47 am »
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Well, young people are also disproportionately uninsured, so they would benefit from having insurance, and they're disproportionately low income, so they would receive a large share of the subsidies going out under the law.
This^^

Due to this bill many are able to have insurance, will be able to purchase insurance at cheaper rates than they would be able to on the market today (though maybe not as cheap as they theoretically should be able to) and will receive a large share of the subsidies.
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« Reply #97 on: March 31, 2012, 12:45:05 am »
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I don't see how the mandate can be considered an unconstitutional abridgement of liberty if the power to tax to raise funds for a single payer health care system isn't. The latter is clearly far more coercive. So in terms of a limiting principle, I don't see how this bill pushes the boundaries at all, unless the Court is prepared to declare Medicare, Medicaid, Social Security etc. unconstitutional as well as the law requiring hospitals to provide service, even if for free, to those whose lives are at risk.
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« Reply #98 on: March 31, 2012, 12:55:32 am »
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I mean, there may be an issue if Congress is saying that 'well, you cannot charge young people less than X' (of course, Congress already mandated that employes have to offer old workers the same terms as young workers on their health insurance; that's the biggest cross subsidy right there, and it's deemed constitutional). Will many young people be able to purchase insurance at cheaper rates than they could on the individual market today? Anybody have any interesting links that addresses this issue?

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If hospitals were to opt out of the Medicare and Medicaid programs, they could choose to not provide free treatment for life-threatening conditions.  The requirement on the hospitals is because of their voluntary participation in those programs.  If you're going to argue that it isn't voluntary, then that would mean that the States have a chance to get the court to rule in their favor on the Medicaid changes.

Yeah. It's voluntarily and heavily incentivized. Just like buying health insurance would be under the other so-called 'mandate'.
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« Reply #99 on: March 31, 2012, 09:52:10 am »
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I believe that the Fed carrot for employer plans doing what the Feds want, is that the benefits are not treated as income to the employees even thought the cost to the employer is deductible. Again it is done through the tax code. Yes I appreciate folks don't like the distinction between coercion through taxation, and coercion through regulation under the interstate commerce clause.  But there is a method to the madness and the reason heretofore Congress structured their laws they way they did - except this time with the mandate.
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