News Federal Judge Strikes Down Part of Obamacare Law

[Al68]

Wow, you must have not seen a hospital bill lately! In my experience, (hospital bills) >> (insurance premiums)

If your experience was representative, there would be no insurance industry. Insurance companies are in business to make money, not lose it. Their margins may only be 2-4%, but that's profit, not loss, which means (insurance premiums) > (hospital bills) + (everything else covered by insurance).

 

[mheslep]

.)
I say it makes economic sense because the insurers have a valid argument that if they are required to insure anyone regardless of health, then many people will buy insurance only if they become ill.

Yes that's a point that should be watched. Several Republic politicians have made noises that, after getting the rid of the purchase mandate either through the courts or through legislative repeal, they kind of like all the requirements on insurers. Well that's economic nonsense as well.

But there are ways around that which do not require everyone to buy insurance. How about:

1) insurers must offer coverage to anyone who applies, and are not permitted to drop coverage except for serious fraud or nonpayment of premiums;

2) no one is required to have health insurance

however

3) insurers are entitled to charge more (for some period of time) for those who have not maintained continuous coverage starting at some date after the legislation takes effect

This is more or less how auto insurance works,

Eh, no, auto insurers are not required to cover anyone that applies nor keep them. They routinely drop people for one too many fender benders or tickets. Most states have a high risk liability insurance pool that they run, in conjunction with, if I recall, one or more designated carriers, so that everyone can get the minimal liability insurance required to be on the road. That, is a good model in my opinion health care - high risk pools for the chronically ill wherein the term 'insurance' doesn't make any economic sense.

 

[Al68]

Simply make it illegal for healthcare companies to turn down people or charge them for prexisting conditions.

Some of us want and need medical insurance, not a comprehensive health care plan that covers things we have no desire to pay for. Covering pre-existing conditions is by definition not insurance.

Making private "insurance only" policies illegal is just as bad as trying to force people to buy comprehensive health care plans.

I have a novel idea: stay out of peoples' private business. If politicians really thought they could offer a better deal for health insurance, they would have no need or reason to pass any law to do it.

 

[talk2glenn]

This is probably an extremely silly question (and it comes without reading the ruling of the Fed Court, so it's also a lazy question): how is forcing someone to buy health insurance any more unconstitutional than forcing them to (for instance) purchase social security through a tax?

Social Security is treated as a tax and separate expenditure (benefit) under the law, and was upheld by the Supreme Court under the general welfare and tax clauses of the Constitution. It does not consider Congressional power under the commerce clause.

The insurance mandate is, under the statute, a penalty for not not complying with statutory requirements to obtain private health insurance, and it is justified under commerce.

Roosevelt also had Congress change the language of the Social Security statute to make it more like a "tax" and "benefit" than an "insurance". Congress could have written the "penalty" up as a "tax", but that would have brought its own challenges (SS was unsuccesfully challenged on the basis that it was a tax on some people to provide benefits for the other, and therefore didn't satisfy "general welfare" or "equal protection" - same could have happened here). They could also have simply nationalized health care outright (the public "option", as a tax-and-benefit program), which would be apparently legal, but that was a political non-starter.

 

[russ_watters]

This is probably an extremely silly question (and it comes without reading the ruling of the Fed Court, so it's also a lazy question): how is forcing someone to buy health insurance any more unconstitutional than forcing them to (for instance) purchase social security through a tax?

SS is a government program, paid for by a tax. Health insurance is private and paid for by private fees.

 

[jbunniii]

Some of us want and need medical insurance, not a comprehensive health care plan that covers things we have no desire to pay for. Covering pre-existing conditions is by definition not insurance.

What should be done about people with conditions that preclude them from being insured? If they can't afford care that will manage their condition (e.g. diabetes, high blood pressure, whatever), then it is likely they will end up in a very expensive emergency room situation at some point, effectively on the taxpayers' dime.

There are two ways to reduce this cost: either all laws forbidding emergency rooms from turning away patients should be repealed, and let these people die on the street, or provide them with some sort of coverage that they (1) are entitled to buy and (2) isn't priced so high that they are unable to buy it.

You can do this one of two ways: either by requiring the private sector to cover these people (with government subsidies if necessary); or offer a public option. The latter was dead in the water before it even got started. As a result, we got the rather mediocre Obama plan which no one seems to like very much and which may even be unconstitutional.

Or we kick the can down the road for another 20 years (and say "too bad" to those who need coverage and can't get it), just like we did when Hillarycare failed.

 

[WhoWee]

Sigh...

You said this so much better than I did.

If you want to buy a homeowners policy would you expect the company to take a look at the house - maybe see if you have a gas leak and a few sparking wires - or a roof? Would it be unreasonable for them to charge higher rates if your house was a fire hazard?

I have a specific example of what is going on in the health insurance market presently. Medicare has something called a Guarantee Issue period for Medigap (supplements).

A situation developed recently where a 65 year old woman was losing her Medicare Advantage plan - it was being discontinued. She had several very expensive Part B drugs -cost approx $130,000 per year and used a nebulizer.

Under the 2011 Medicare Advantage plans available, she would be responsible for 20% of the cost of the Part B prescriptions - roughly $26,000. Because her plan did not renew, she had a Guarantee Issue and took a Medigap plan at a cost of about $85 per month that covered 100% of (her share of) the Part B prescription cost.

By contract, the insurance company will collect roughly $1,000 per year in premiums and pay out $26,000 in Part B prescription costs - plus the (20% balance) of all of her Dr. visits, MRI's, CT scans, ambulance rides, plus the Part A co-insurance (hospital) amounts. She will pay nothing else for any of these items as long as she pays her premium.

The insurance company can not drop her, but will have the right to increase the premiums for everyone in her risk pool - but can't single her out.

In this scenario, who is the bad guy? Is it her, the insurance carrier, Medicare, the drug manufacturer, the FDA, the doctor, the insurance carrier that left the area, or is everyone or nobody to blame?

Health care reform was too complicated an issue to be handled in the manner Congress and the President handled it - I hope the Court restores sanity to the lawmaking process.

 

[jbunniii]

If you want to buy a homeowners policy would you expect the company to take a look at the house - maybe see if you have a gas leak and a few sparking wires - or a roof? Would it be unreasonable for them to charge higher rates if your house was a fire hazard?

This is not a very good analogy, as you can move to another house if yours is uninsurable (and you probably knew it was uninsurable when you CHOSE to move there), but you cannot move to another body, and the one you are stuck with may have maladies that you could not have prevented even if you lived a model lifestyle, e.g. inherited conditions.

One could argue that such conditions should be tested for prior to birth, and if found, offer an abortion, but I think many opponents of Obamacare wouldn't like that very much, either!

 

[WhoWee]

This is not a very good analogy, as you can move to another house if yours is uninsurable (and you probably knew it was uninsurable when you CHOSE to move there), but you cannot move to another body, and the one you are stuck with may have maladies that you could not have prevented even if you lived a model lifestyle, e.g. inherited conditions.

One could argue that such conditions should be tested for prior to birth, and if found, offer an abortion, but I think many opponents of Obamacare wouldn't like that very much, either!

Insurance is a business that protects you against all or part of your risk - nothing else.

If you owned a restaurant and the Government dictated how much you could charge customers along with the type and size of portions (regardless of your cost) would it be fair?

 

[Gokul43201]

SS is a government program, paid for by a tax. Health insurance is private and paid for by private fees.

Thanks for the response. So, any problem with constitutionality might be resolved if healthcare were nationalized? If the USSC does rule this unconstitutional, I wonder if Dems will push for such a "fix".

 

[Mech_Engineer]

In my opinion, Social Security IS unconstitutional. Problem is, there are so many people invested and dependent on it it's hard to think of a way out. It's the elephant in the room no one wants to talk about; it's day will come though, probably when it goes into chatastrophic bankruptcy (as it is it's just started paying out more than its bringing in...)

My plan for getting us (as a country) off Social Security:

1. New workers enetering the marketplace do not have to pay for SS. Instead, they get tax breaks for 401k or other individual retirement savings plans.
2. Current workers (like me) that have paid some into SS but are more than 10 years away from retirement can pull out their SS investments as tax-credits on their returns, up to some maximum per year until they're out. This money can be invested in an IRA or 401 for a significant tax benefit. It will cost the gov't money yes, but that's the price we pay for getting into such a mess.
3. Retirees currently on SS (or people close to retiring) can keep their SS benefits as promised by the government. They were told they could depend on it, and that commitment will be honored.

15-20 years from now, problem fixed. Move on.

 

[CRGreathouse]

15-20 years from now, problem fixed. Move on.

Those would be a painful few years...

 

[Mech_Engineer]

Those would be a painful few years...

Who says they aren't already painful? We need to start soon: it will come down to a set amount of pain, either in one big bang, or spread out over a few years.

 

[CRGreathouse]

Who says they aren't already painful? We need to start soon: it will come down to a set amount of pain, either in one big bang, or spread out over a few years.

I have no personal objection to your plan: it would benefit me. But I'm concerned about those who would just miss the cutoff, as well as the years in which the government has funding obligations but no income stream for it.

 

[Mech_Engineer]

I have no personal objection to your plan: it would benefit me. But I'm concerned about those who would just miss the cutoff, as well as the years in which the government has funding obligations but no income stream for it.

And what about 20 years down the road when SS is bankrupt and the gov't has financial obligations to everyone?

 

[russ_watters]

Thanks for the response. So, any problem with constitutionality might be resolved if healthcare were nationalized?

Yeah, it worked for SS, right?

If the USSC does rule this unconstitutional, I wonder if Dems will push for such a "fix".

[edit: not correct] Unlikely, since if they thought they could get it they already would have - and they tried it in the '90s. But that's always been the ultimate goal, has it not? Ted Kennedy referred to it as "the cause of my life": http://www.newsweek.com/2009/07/17/the-cause-of-my-life.html

 

[russ_watters]

In my opinion, Social Security IS unconstitutional.

As a matter of law and current fact, it had its day in court and was ruled Constitutional. As a matter of history, the interpretation under which it was ruled Constitutional seems to be far more liberal than the founders would have concieved-of. But either way:

Problem is, there are so many people invested and dependent on it it's hard to think of a way out.

More to the point, old people vote and young people don't and old people are getting paid to vote for keeping SS unchanged. If there's a better example of leaning on the throttles when the bridge is out ahead, I've never heard of one.

It's the elephant in the room no one wants to talk about; it's day will come though, probably when it goes into chatastrophic bankruptcy (as it is it's just started paying out more than its bringing in...)

The reality for people who are retired now or will retire soon is that they will see SS largely unchanged until they die. The reality for someone in their 20s and 30s is they are being told by financial advisors to invest and plan for retirement under the assumption that they'll get nothing from SS. While I am well aware of that reality, it is difficult to swallow simply handing-over such a huge fraction of my pay to others. Old people are stealing from me!

My plan for getting us (as a country) off Social Security:

Retirees currently on SS (or people close to retiring) can keep their SS benefits as promised by the government. They were told they could depend on it, and that commitment will be honored.

15-20 years from now, problem fixed. Move on.

We're on the same page except for this one. Everyone should make sacrifices and even if we slash the benefits for current retirees and up the retirement age in advance of a phase-out, their sacrifice will still be substantially less than ours.

Those would be a painful few years...

Who says they aren't already painful?

They're not half as painful as they will be if we don't start making changes. Right now, we're accelerating toward the ravine and massive changes will be required to prevent the economic collapse rivaling the Great Depression.

 

[Gokul43201]

Those would be a painful few years...

For which of those three groups (plus the one missing group in M_E's list, namely workers less that 10 yrs from retirement) do you think this period would be painful?

It is trivially unpainful (relative to status quo) for group 3, and I don't think it is necessarily more painful for group 1 than any subsequent period. I have no opinion (for now) on the pain inflicted upon group 2 (and the missing group 2.5).

Edit: Missed post #74. There's just too many posts to read!

 

[Mech_Engineer]

We're on the same page except for this one. Everyone should make sacrifices and even if we slash the benefits for current retirees and up the retirement age in advance of a phase-out, their sacrifice will still be substantially less than ours.

The way I see it, the only way to completely remove the "you hate retirees on fixed incomes" counter-argument is to leave them supported, and phase-out anyone that isn't yet dependent on SS because they made no other retirement plans...

 

[Ivan Seeking]

What should be done about people with conditions that preclude them from being insured? If they can't afford care that will manage their condition (e.g. diabetes, high blood pressure, whatever), then it is likely they will end up in a very expensive emergency room situation at some point, effectively on the taxpayers' dime.

There are two ways to reduce this cost: either all laws forbidding emergency rooms from turning away patients should be repealed, and let these people die on the street, or provide them with some sort of coverage that they (1) are entitled to buy and (2) isn't priced so high that they are unable to buy it.

You can do this one of two ways: either by requiring the private sector to cover these people (with government subsidies if necessary); or offer a public option. The latter was dead in the water before it even got started. As a result, we got the rather mediocre Obama plan which no one seems to like very much and which may even be unconstitutional.

Or we kick the can down the road for another 20 years (and say "too bad" to those who need coverage and can't get it), just like we did when Hillarycare failed.

Which is a key issue and one the opponents of Obamacare continually ignore.

 

[Ivan Seeking]

I would add that no one is forced to buy health insurance under Obamacare. That characterization is false. However, they are charged for their risk to society for not having insurance.

Why do opponents of Obamacare want to continue giving these people a free ride? Get injured, then declare bankrupcy, or ditch the bill collectors, or just send in $10 a month for life, and dump the liability on the system. That's how it works now.

 

[Vanadium 50]

One could argue that such conditions should be tested for prior to birth, and if found, offer an abortion, but I think many opponents of Obamacare wouldn't like that very much, either!

Offer? Why not require? The legal theory here is that the government can mandate that an individual purchase a service. In for a penny, in for a pound.

 

[russ_watters]

I would add that no one is forced to buy health insurance under Obamacare. That characterization is false.

That characterization is how it was sold to the public and the court. Seems to me like you're arguing against reality.

 

[Mech_Engineer]

I would add that no one is forced to buy health insurance under Obamacare. That characterization is false.

Buy health insurance, or pay this fine. This sounds like being forced into healh insurance to me...

Why do opponents of Obamacare want to continue giving these people a free ride? Get injured, then declare bankrupcy, or ditch the bill collectors, or just send in $10 a month for life, and dump the liability on the system. That's how it works now.

The point isn't that I want to give people a free ride, I advocate personal responsibility. The government shouldn't have the responsibility to take care of us a) because people should be free to do what they want and live with the consequences, and b) if the gov't can FORCE us to buy health insurance (a private product) what can't they force us to buy? What if a few years down the road they use the same argument to make everyone buy hybrids in the name of global warming?

 

[talk2glenn]

I would add that no one is forced to buy health insurance under Obamacare. That characterization is false. However, they are charged for their risk to society for not having insurance.

Why do opponents of Obamacare want to continue giving these people a free ride? Get injured, then declare bankrupcy, or ditch the bill collectors, or just send in $10 a month for life, and dump the liability on the system. That's how it works now.

Indeed. And no one is forced to not drive drunk, either. However, they are charged for their risk to society for doing so.

This argument is inane. In the real world, it is now a matter federal law (with enforcement beginning in 2014) that every American obtain acceptable, to the United States government, private health insurance. If you do not, you are breaking the law, and subject to civil penalty.

This is reality.

At least have the sensibility to acknowledge that before proceeding with your arguments. Reminds me of the silliness of the "can Assange be charged" thread.

 

[Al68]

Indeed. And no one is forced to not drive drunk, either. However, they are charged for their risk to society for doing so.

Failure to meet a government requirement is equivalent to driving drunk? Horrible analogy. Especially when the penalty imposed is for failure to meet specific arbitrary requirements, not for any demonstrated risk to society.

And no, my failure to disclose my private business to government does not constitute such a demonstration.

This argument is inane. In the real world, it is now a matter federal law (with enforcement beginning in 2014) that every American obtain acceptable, to the United States government, private health insurance. If you do not, you are breaking the law, and subject to civil penalty.

This is reality.

At least have the sensibility to acknowledge that before proceeding with your arguments.

What are you talking about? The administration is (now) specifically claiming in court that the law contains no requirement to buy insurance, and contains no "penalty" at all, but merely a tax hike on selected people.

And the subject of this thread is whether or not that "individual mandate" is a valid legally enacted law. The judge referred to ruled that it is not a valid law.

 

[mheslep]

This is probably an extremely silly question (and it comes without reading the ruling of the Fed Court, so it's also a lazy question): how is forcing someone to buy health insurance any more unconstitutional than forcing them to (for instance) purchase social security through a tax?

Your question is astute, not silly, and is discussed in the opinion. The government's argument in the case was two fold: i) the commerce clause gives the government the power to compel purchase of health insurance, and judge if you don't buy that, then ii) this requirement is really a tax, even though the government denied this in the discussion leading to the creation of the health care act, and the power then comes from the general welfare clause and the power to tax:

On a third front, the Secretary defends the Minimum Essential Coverage Provision as a valid exercise of Congress's independent authority to lay taxes and make expenditures for the general welfare. Contrary to earlier representations by the Legislative and Executive branches, the Secretary now states unequivocally that the Provision is a tax, published in the Internal Revenue Code, and enforced by the Internal Revenue Service

The judge answered both in the brief: no you don't have the authority under the commerce clause and no this is not tax.

 

[turbo]

And the subject of this thread is whether or not that "individual mandate" is a valid legally enacted law. The judge referred to ruled that it is not a valid law.

Thank you! And the minimum mandated coverage will have support from health-care businesses that the folks on FOX won't tell you about.

When that "unconstitutional" clause gets appealed to the Supreme Court (possibly before) I think you'll find that health insurance providers, and hospital groups will both file amicus briefs in support of the mandate. Hospitals will because they would like to provide fewer free services to indigent patients, who drive up ER costs with non-emergency complaints, for one. Also, hospitals would love to have everyone that walks in the door be able to provide a card proving some level of coverage from a payer that they can bill, even if that coverage won't pay for all the costs of treatment.

The one that will surprise conservatives who haven't been thinking this through is the health-insurance companies. I believe they will file amicus briefs for the mandate because the mandate will get them 10s of millions of new clients. Clients that would re-fuel the drive to create a real public option if there is no other reasonable way to get coverage for them. Also, the insurance companies are well-aware that if people are allowed to opt into Medicare, as a way to address this situation (a real possibility that has been suggested before) the experience level of the Medicare pool and the average treatment costs will fall, since younger, presumably healthier people would join up. Neither situation would be good for their profits.

Ultimately, how all this will turn out will rest on the opinions of a very few people in the court system.

 

[Mathnomalous]

The one that will surprise conservatives who haven't been thinking this through is the health-insurance companies. I believe they will file amicus briefs for the mandate because the mandate will get them 10s of millions of new clients.

Good lord, thank you for pointing this out.

 

[mheslep]

Thank you! And the minimum mandated coverage will have support from health-care businesses that the folks on FOX won't tell you about.

The topic of this thread is the legal issue turbo, not a political one. You were gracious enough to post the opinion of the judge, not Fox News, not some politician, not from Hospital lobbies.

Ultimately, how all this will turn out will rest on the opinions of a very few people in the court system.

A very few people being nine and only nine judges. As it should be. So with that acknowledgment hopefully we can dispense with discussion of how The Man is going to rig the outcomes, at least here.