Individual Mandate Upheld in Federal Court

A federal appeals court has ruled that Congress acted within its Constitutional authority when it passed the Patient Protection and Affordable Care Act into law, last year. Importantly, the three judge panel voted two to one, with one Republican nominee and former Scalia law clerk in the majority, that the individual mandate is in line with Congressional authority to regulate interstate commerce.

It is the first time a Republican judge has sided with the individual mandate, in the ongoing wave of legal challenges to the law, and many conservatives see the ruling as a setback. Others say the challenge to the individual mandate will continue until it reaches the Supreme Court. But critics of that view warn there may be unintended consequences of pushing the challenge too far, consequences which might require more, not less, government intervention.

The individual mandate, of course, like the “public option”, started out as a Republican idea meant to accomplish two main goals: to give the insurance industry a cushion against some of the more severe stresses of the marketplace, and to expand coverage without replacing private insurance with a new blanket government-run single-payer system.

In both instances, the intention was to contain government intervention in the private markets, and allow insurers to extract the better profits, at a volume and of a kind closer to what they prefer. If the individual mandate is successfully challenged as an unconstitutional mandate to purchase a commercial product, in an environment in which Congress has the authority to enact such regulatory measures, Congress would be forced to finance coverage for any consumers who might find themselves in the insurance affordability “doughnut hole”.

That would mean one of two things: a robust public option to complement low-cost private insurance policies on a coverage exchange, or a requirement that private insurers meet universal coverage cost requirements, at their own expense. That could mean the president will get the full, original blueprint for health insurance reform, including a public option on the low-cost exchanges, after all.

By far the more useful and meaningful aspect of the Patient Protection and Affordable Care Act is the ban on discrimination based on health conditions. Such discrimination not only costs tens of thousands of lives and billions in taxpayer dollars, each year, it distorts the insurance industry’s business model and props up unsustainable practices by biasing healthcare insurance companies against paying for healthcare.

The legal argument may come to that: the question of whether there is a commercial right, in the Constitution, to sell health insurance but be structurally organized to avoid providing it. That is an argument the industry does not want to have and could likely not win. In fact, it is unlikely the justices would even accept such an argument for hearings, unless they saw an overriding need to rule on that point to clarify related and pending disputes.

In any case, this latest bipartisan ruling on the legality of the individual mandate appears to be the middle ground that lines up with precedent and prevailing jurisprudence: the government can require economically favorable actions, so long as its requirement does not infringe on other rights. A public option that would help provide coverage to those for whom the mandate might prove prohibitively costly might become a requirement, so that all persons receive equal treatment before the law.

At present, the private healthcare sector is struggling to achieve anything like an economically favorable framework for providing universal care: one example is the experimental cancer drug Avastin, recently rejected by the FDA after several studies showed it had no proven benefit to patients but posed serious risk of side effects.

The drug cost as much as $88,000 per year per patient, and the drug maker offered a not very generous cost reduction plan, to just $57,000 annually for patients earning under $100,000 per year. After taxes, of course, that is almost the entire net income of someone earning that amount; nevermind the vast majority earning far less.

With so much upheaval in the still troubled US economy, and increasing talk among cost-conscious Tea Partiers that they bear no allegiance to the Republican party, the cost question in healthcare may soon become a right to life question, which is what so many reform-minded and patients’ rights groups have so long held it to be.

It now looks increasingly unlikely the partisan/industry challenge to the nation’s health insurance reform plan will succeed. And that means insurers have to plan more seriously for the coming changes, or they may face a deeper, more serious challenge: a challenge to their right to operate as insurers while actively investigating ways to avoid acting as insurers.

Adaptation is a wiser long-term strategy for insurance providers, than having an unwinnable fight over their strained and unsustainable profit-making model. To compete in the new marketplace will mean being the best at providing top-quality open access to genuine health treatment and preventive care, at rates everyone can afford.

5 responses to Individual Mandate Upheld in Federal Court

  1. This is exactly the slippery slope I speak about in my series or aticles on the Mandate and the commerce clause.

    There have been a number of rulings so far, some forthe mandate and some against. The problem is not the mandate in this case the problem is the guiding law and the intrepretation of it.

    in the past 20 years or so the guiding ruilings have become quite muddied. This will need to go to the Supreme Court for any clarity to be found. Even then it is possible any ruling from the supreme court could open up many other cans of worms due to the history of intrepretations surrounding the commerce clause.
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  2. J.E. Robertson

    Another way to read the various interpretations of the Commerce Clause would be that the Supreme Court has so expanded the meaning of the Commerce Clause, for so many different legal and jurisprudential purposes that it is not really feasible for the Court to find that something like this runs counter to it.

    The real question here is whether the opponents of the Patient Protection and Affordable Care Act will really seek to oppose it on these grounds, all the way to the Supreme Court, when it already appears the law is on solid footing, possibly only requiring the expansion of low-cost exchanges to include a public option, to meet equal protection requirements.

    • Dear J.E.,

      I agree that your intrepretation could be a correct one, but the basic question we need to ask as Americans is; how could the decisions over the years be so diverse and conflicting? Are we, as a people, comfortable with this expansion and role of the courts in the expansion of the federal governments control?

      Also, regardless of which way we, the people, decide, how do we correct the wording of the constitution to eliminate future conflict – as these constant litigations – both at the various state, territorial, indian nation and federal level – are costing us quite a bit in terms of expense and lost productivity.

      Finally, how can we, as a people be expected to support these decisions, if they fly in the face of a common sense intrepretation of this clause? In other words, if the court cannot explain it so it makes sense, how are we expected to support their definition?

      Unfortunatly, I think this is one of those fundamental issues that is currently dividing us as a nation. I also think we all agree that the continuation of this great divide could end up being a tolling of the bell.

      • J.E. Robertson

        Dear Thomas,

        You raise another interesting point here, which is what is motivating the need for such intervention. The further apart the powers that be and the engines of wealth creation get from the bulk of the American people, the more our economic landscape demands close scrutiny and government intervention: first, to insure that justice and the rule of law prevail in the marketplace, and second, to insure that our system remains democratic in practice as well as in law.

        I think the two major parties need to take a serious look at coming together around this issue of the widening wealth divide, and think about long-term economic policies that will heal this wound in our national economy, so that the middle class can do what it does better than any other lever of influence in our society: secure a genuinely democratic standard of living and civic society for more people, making our system more resilient against the corrosive effects of concentrated wealth and anti-democratic manipulations.

        To me, this means with the regulatory power now in place, there needs to be an incentivizing of more consumer-friendly behavior, so that little by little, real market power is turned back over to the consumers, and excess concentration of market influence is no longer seen as so highly valuable. (This may have a virtuous effect on the Court’s tendency to expand the Commerce Clause to compensate for market failures.)

  3. Dear J.E.,
    Again I agree with your comment. I find your logic well reasoned and your argument fair and compelling. I do not think we disagree on the issues. I think you are more convinced that having the government address the issue is perhaps a better solution. I am not yet sure which is the best method to address the problem.

    The issue I have at the moment overall is with the changing interpretations of what to me is fairly simple language. What I most troubled by at the moment is the continual use of parsing to expand the meanings of simple concepts in areas that either side wants it to go at the moment.

    As I have gotten older, the phrase the pendulum swings both ways has begun to haunt me as I feel the oscillations of this reat pendulum are getting faster in frequency and larger in amplitude.

    Like you I think the fractionalization of the country and the widening gulf between opinions, compounded by the trend for people to make up their mind based almost soley on party doctrine or affiliation is bringing us further into an abyss that may capture us like Uncle Remus’ Tar Baby of old.

    The kind of reasoned dialog that you, and I home I as well, are engaging in is what I think needs to be done on a national scale. In the end it is about solutions to the vexing problems we face with our economy, the cost of our increasing longevity and desire for quality of life, and the development of something better for our future generations that we all seek and I believe most agree.

    While much of the real divide is in the how, much if the reason that traction is not being gained is because the how has become the all encompassing of our ideals

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