Benemax

It has been many months since I have blogged on matters related to Federal Health Care Reform. I have intentionally been letting the dust settle. Now I think it’s time to resume commentary, not with the same frequency or intensity as in the run-up to the vote in Congress, but on a regular basis. Whenever I have a new post, I will tweet my followers. Thanks for reading!

A Federal District Court judge in Virginia has ruled major portions of PPACA unconstitutional. Specifically, he found that the federal government does not have the authority to require individuals to purchase health insurance.

The Justice Department argued unsuccessfully that the Supremacy and Intersate Commerce clauses of the Constitution give that power to the federal government.

In recent decades, these clauses have tended to trump the Ninth and Tenth Ammendments in most court decisions. However, the provisions of ObamaCare push the scope of those clauses to new, yet untested, extremes.

Of course, this District Court ruling will be appealed. Legal scholars unanimously believe that this question will ultimately be decided by the Supreme Court. Based on precedent, most commentators believe the government will prevail…but I disagree. This court has shown a willingness to put the breaks on when they think activist interpretations have taken society too far in one direction or another and I think this might well be another area where this court may weigh-in and “make some new law”.

Two months ago, when the first Republicans began talking about trying to “repeal the Health Care Reform bill”, the idea sounded a bit crazy. After all, the bill had just passed Congress with a comfortable margin in the Senate and the sitting President was the bill’s #1 proponent. How could it possibly ever be repealed?

Repeal still seems like a longshot, but not quite as crazy as it did 2 months ago. The latest Rassmussen poll, for example, shows that Americans now favor repeal by an astonishing 2 to 1 margin (63% to 32%).

When Health Care Reform first passed, President Obama confidently predicted a surge in public support as folks learned more about the contents of the legislation. Instead of a surge, he got a bubble and the bubble only lasted a week or two. Since then, as people have begun to digest the bill’s “little noticed” provisions, opposition to the bill has broadened, deepened and hardened.

To paraphrase Speaker Pelosi’s famous quip, “We had to pass the bill to find out what’s in it.” And apparently, Americans are not liking what they’re finding.

In a recent analysis of the new Health Care Reform law, Tower Watson conclued that by 2018, 60% of all employers will be force to pay the so-called “Cadillac Tax”.

This excise tax levies a 40% nondeductible tax on the annual value of health plan costs for employees that exceed $10,200 for single coverage or $27,500 for family coverage. The tax kicks in in 2018.

Towers Watson data reveal that the average 2010 cost of medical coverage for active single and family plans is $5,184 and $14,988, respectively. When these figures are projected out to 2018 using a reasonable estimate of future health care inflation (under 9%), the excise tax is triggered.

Example: a plan with a 2018 single coverage cost of $11,200 and family coverage cost of $32,400 would exceed the limit by $1,000/single, $4,900/family. The tax assessed would be $400/single, $1,960/family. An employer with 50 singles and 50 families would pay a tax of $118,000. An employer with 500 singles and 500 families would be hit with a $1,180,000 tax bill. 

Note: In the case of fully insured plans, the tax is actually paid by the insurance carrieer, not the employer, but of course, that cost would be passed through to the employer in the form of even higher premiums. 

Of course, as always, this bill will ultimately be paid by consumers and employees in the form of higher higher prices, higher health benefit contributions, higher out-of-pocket health care costs (due to benefit reductions), and/or lower wages (due to increased employer cost).

As predicted here, the passage of Health Care Reform legislation in March marked the beginning, not the end, of the health care debate in The United States.

Twenty-one states have now filed lawsuits challenging the constitutionality of the law, and legislation has been introduced or is about to be introduced in 41 states that seeks to exempt those states and their residents from various provisions of the new law.

States’ efforts go back to 2006, when Dr. Eric Novack, an orthopedic surgeon based in Phoenix, realized that some form of national healthcare legislation was a possibility.

Novack worked with conservative groups to craft what is now called the Healthcare Freedom Act.

“The idea is that healthcare decision-making ultimately should be made by patients and families, not from someplace else,” Novack tells Newsmax.

The act provides that, if a healthcare service is legal, “You should always be able to spend your own money to get access to it,” Novack says. “No bureaucrat, public or private, should be able to take that right away from you.”

To whatever extent Health Care Reform infinges on this right, it would seem to run smack up against the “life, liberty and pursuit of happiness” promise made in the Declaration of Independence.
In addition, “You should always have the choice not to participate in any healthcare system or plan without a penalty,” says Novack, who heads Arizonans for Healthcare Freedom. “In other words, no mandates of any kind…”

Already, Utah, Idaho, and Virginia have passed some aspect of legislation undercutting the national healthcare law and a constitutional amendment is on the ballot in Arizona this November.

Earlier we reported that more than 30 states are preparing to challenge the just passed Health Care Reform bill on Constitutional grounds. Here’s an up to the minute look at where that process stands:

Attorneys general from several states said Monday that they will sue to block the plan on constitutional grounds to stop the federal government overstepping its constitutional powers and usurping states’ sovereignty.

Ten of the attorneys general plan to band together in a collective lawsuit on behalf of Alabama, Florida, Nebraska, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah, and Washington.

“To protect all Texans’ constitutional rights, preserve the constitutional framework intended by our nation’s founders, and defend our state from further infringement by the federal government, the State of Texas and other states will legally challenge the federal health care legislation,” said Texas Attorney General Greg Abbott, in a statement.

Virginia Attorney General Kenneth Cuccinelli, who plans to file a suit in federal court in Richmond, said Congress lacks authority under its constitutional power to regulate interstate commerce to force people to buy insurance. The bill also conflicts with a state law that says Virginians cannot be required to buy insurance, he said.

“If a person decides not to buy health insurance, that person by definition is not engaging in commerce,” Cuccinelli said in recorded comments. “If you are not engaging in commerce, how can the federal government regulate you?”

In addition to the pending lawsuits, bills and resolutions have been introduced in at least 36 state legislatures seeking to limit or oppose various aspects of the reform plan through laws or state constitutional amendments, according to the National Conference of State Legislatures.

So far, only two states, Idaho and Virginia, have enacted laws, while an Arizona constitutional amendment is seeking voter approval on the November ballot. 

Florida Attorney General Bill McCollum, a Republican candidate running for governor, said the mandate would cost Florida at least $1.6 billion in Medicaid alone.

“The health care reform legislation passed by the U.S. House of Representatives last night clearly violates the U.S. Constitution and infringes on each state’s sovereignty,” McCollum, said Monday.

Idaho Gov. C.L. “Butch” Otter recently became the first governor to sign state legislation requiring the state attorney general to sue the federal government over the mandatory coverage clause, according to Fox News.

Many states cite the 10th Amendment, which says “powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states,” as proof that the U.S. government cannot set their healthcare laws.

…and the beginning of Chapter Two. The House of Representatives passed the Senate’s massive health care reform bill last night (by just 4 votes) along with a “Fix-it” side-car. Now the main legislation goes to the President’s Desk (he is expected to sign it no later than Tuesday) while the Fix-it bill goes to the Senate for debate.

In a day or two, Health Care Reform will be the law of the land. But this is just the beginning of the story. Now begins the real struggle for the heart and minds of the American people and for the future of our economy and social fabric. So what’s next?

First, many provisions of the Health Care Reform bill can be modified by the Fix-it bill. This bill needs only 51 votes to pass The Senate but it can be amended. Republicans and like-minded Democrats can (and probably will) offer hundreds of amendments. If they are smart, they will use this opportunity not to obstruct the current bill but to present their own version of Health Care Reform to the American people, offering amendments that will lower cost, trim bureacucracy, and promote consumerism. If even one of these amendments passes, the Fix-it bill must go back to the House for a final ok.

Second, many of the details of the legislation have been left to various federal agencies to spell out. We should see a steady stream of regulatory proposals out of Washington over the next several years and these will determine in large measure the real character and impact of this legislation.

Third, there will be a host of legal challenges to this legislation. Already several states are in the process of “opting-out” of various aspects of Health Care Reform with Virginia, Idaho and Indiana leading the way. As many as 34 states are considering some form of “opt-out” legislation. These challenges to federal authority will have to work their way through the courts. Meamwhile, implementation of some of the plan’s provisions may be delayed.

It is also likely that a number of private individuals and groups will challenge aspect of the Health Care Reform legislation.

Fourth, mid-term elections are coming in the fall. It is quite possible they could result in a major shift in the balance of power in Congress. This will not be enough to enable repeal of Health Care Reform legislation but it may lead to some amendments that would improve the legislation and blunt its negative impact.

And finally, we are just 30 months away from another Presidential election.  

This blog will remain active in the coming months, reporting on the details of Health Care Reform as they are spelled out and on efforts to modify, impede or repeal this legislation. Stay with us.

President Obama has embarked on a speaking tour that is being billed as “the closing argument for Health Care Reform.” Current expectations are that the House of Representatives will vote on the legislation before the end of March, possibly by March 18.

Now is the time for all of us to make our own “closing arguments” (pro or con) to our own representatives in Congress. Where does your representative stand on health reform? The Wall Street Journal analyzes the stand of each House member in a new online vote tracker.

While Congress continues to edge closer and closer to passing the reform legislation, public opinion remains firmly opposed. An average of recent health reform polls compiled by Real Clear Politics shows 41 percent of Americans in favor of the Obama plan, with 50 percent opposed. See the full analysis

On Thursday of this week, President Obama is scheduled to meet Republican and Democratic leaders in a televised summit. The stated purpose: Find common ground. The more likely purpose: Re-engage the interest of the American people, create a ‘bully pulpit’ for the President to preach the message of reform, and of course, paint the Republicans as evil obstructionists.

In advance of the meeting, the President is likely to present his own version of Health Care Reform, a proposal that will probably include many of the features of the current House and Senate bills. It is possible, but my no means certain, that this “consensus” bill will include some brand new ideas from the President himself and/or some new provisions designed to appeal to Republicans in general (or to Olympia Snowe in particular) along with the disaffected American majority.

Finally, according to Senate Majority Leader Harry Reid, the Democrats have decided to rely on a legislative maneuver called “Reconcilliation” to get the bill through the Senate with only 51 votes (vs. 60). Reconcilliation is designed to be used for budgetary matters only, not to decide policy questions. It is hard to see how the use of this technique could possibly be appropriate for a bill that amounts to the biggest single policy shift in the history of The United States. But that doesn’t mean it won’t be tried.

The maneuver is fraught with risk. First, it is likely that a number of Democratic Senators who voted for the bill the first time will vote against it if their leadership resorts to  Reconcilliation. 10 Democrats would have to switch sides to change the outcome, and that is unlikely, but the loss of even a half dozen Democratic votes will be embarrassing for the President and the Congressional leadership.

Second, the new bill would still have to pass the House. Due to deaths and resignations, it is unclear whether the votes to pass this legislation are still there…even if not one Democrat switches sides after seeing what happend to their party in Massachusetts. Plus there are at least 11 anti-abortion Democrats who voted for the bill the first time but may not vote for it this time unless it contains strict pro-life provisions (which is unlikely).  

Third, it is possible that the courts might nullify all or part of this legislation if they find that the Reconcilliation process has been abused, i.e. if the find that the Senate did not follow its own rules. Courts traditionally dislike meddling in the affairs of the other branches of government but this could be deemed sufficient cause for a departure from that policy.

The following quote from Aetna says it all:

“In an effort to resuscitate health reform, President Obama has invited Republicans and Democrats to the White House for a February 25 summit. Whether this is just a way to postpone the inevitable, as some believe, announcement that health reform is dead for 2010 or whether the President truly believes he can get the patient up and moving again, remains as unclear as everything else surrounding reform.”