Obamacare Round 4? Round 5?

The Patient Protection and Affordable Care Act has come before the Supreme Court on three occasions for full briefing and argument. As we begin the run-up to the October 2015 Term of the Supreme Court, it is worth noting and watching for the possibility that the Court may take on at least two additional categories of cases involving Obamacare. Based on petitions already filed, or that will likely be filed near the beginning of the Court's next Term, the Court may have to confront further arguments for religious exemptions from Obamacare's contraceptives mandate, and may have to decide how a clause of the Constitution that requires tax legislation to be offered first in the House of Representatives plays into the Capitol Hill hi-jinx that preceded enactment of the law.

In Round One, in the case called National Federation of Independent Businesses v. Sebellius, Chief Justice Roberts, writing for a 5-4 majority, held that the "Shared Responsibility Payment" imposed on individuals that chose not to comply with the Individual Mandate to purchase health insurance was a tax. The decision conflicted with the claims and arguments of the Democrats who enacted Obamacare. While Roberts and the majority found the Shared Responsibility Payment to be a tax permissibly imposed by Congress, rather than a penalty.

In Round Two, in the case called Burwell v. Hobby Lobby, Justice Samuel Alito, writing for a 5-4 majority, held that small corporations could claim an accommodation under Obamacare from requirements of Obamacare that would have resulted in the corporation providing abortifacient contraceptive coverage as part of employer-provided health insurance. The accommodation protecting the corporations was required by another federal statute, the Religious Freedom Restoration Act ("RFRA"). RFRA imposes on the federal government an obligation to use the most narrowly crafted means of serving even compelling government purposes when the government's regulation limit or interfere with the free exercise of religion. The corporations, including Hobby Lobby, satisfied the Supreme Court that the obligation to fund abortion-inducing contraceptives violated their religious faith.

In Round Three, in King v. Burwell, writing for a 6-3 majority, Chief Justice Roberts rejected the obvious and plain meaning of a provision of Obamacare that provided federal tax subsidies to cover the cost individuals subscribing to health insurance through health insurance exchanges "established by the State[s.]" The IRS and the Obama administration had enacted rules by which individuals buying insurance through federally operated exchanges in the 34 States that refused to establish exchanges would still qualify for the tax subsidies to cover the costs of premiums. Roberts rejected the actual meaning of the plain words of the statute, essentially on the ground that, had the Court held Congress and the administration to the text of the statute, the purpose of Congress in adopting Obamacare would be frustrated by the resulting failure of the entire program.

Perhaps, though, the Court has had enough of Obamacare.

Perhaps the Court needs a break from the rancorous debate and the heat. Justice Scalia certainly did not pull any punches when he remarked the statute had been rescued enough times by the Court that it should now be known as SCOTUS-care, a result he concluded was obtained by a tortured process of "interpretative jiggery-pokery."

We should know, perhaps sometime in early October, or shortly thereafter, whether the Court will again revisit the crown jewel of the Obama crown. By then, the Justices will have had the opportunity to look at petitions involving another round of disputes over the Obama administration's efforts to force employers to fund health insurance coverage for services against which they maintain a religiously based, conscientious scruple. In addition, shortly after the Court resumes its work, another constitutional challenge, a systemic attack on the entire Act, will be presented to it, in a petition filed by the Pacific Legal Foundation.

In a series of cases involving religiously affiliated colleges and universities, the Supreme Court may have the opportunity to further refine its thinking on whether the federal government violated rights of religious freedom when it imposes obligations on private parties, in this case, Catholic and Baptist affiliated schools and colleges, to provide coverage for contraceptive services against which they hold a religious scruple of conscience. The first Obamacare contraceptives case involved, as noted above, small, closely held corporations. These cases, if the Court takes one or more of them for decision, involved religiously affiliated institutions of higher education but not religious societies as such.

In another case, about which I posted a series of blog entries a year ago, the Court will be asked to consider whether the entire Obamacare statutory framework was enacted in violation of a provision of the Constitution known as the Origination Clause. Under the Origination Clause, all bills that raise revenue must originate in the House of Representatives, although the Senate is permitted to offer amendments to such bills.

As I explained in the previous post introducing the Sissel case:

Litigation raising the Origination Clause argument against Obamacare has been pending in the Nation’s Capitol for some time now.  Matt Sissel, the plaintiff, claimed that, because the penalty for failing to purchase health insurance is a tax, the Origination Clause required that the House of Representatives originate the legislation. Obamacare, however, was an invention of the Senate.

In fact, the Democrat-controlled Senate took a pending House bill – one regarding tax credits for home ownership by members of the military -- stripped out every jot and every tittle of it including its title, and inserted the Affordable Care Act in place of its original text and title.  This, on Capitol Hill, is called an amendment in the nature of a substitute.

A decision on the Sissel case out of the US Court of Appeals in Washington, DC, on Friday, August 7, may provide the set-up for the Origination Clause challenge to Obamacare to be considered at the Supreme Court.

In a strange twist, as the most recent development in Sissel case, Democrat appointed appellate judges all rejected Matt Sissel's claim that Obamacare was a tax and therefore unconstitutional because it originated in the Senate. Republican appointed judges on the same court rejected the majority's view that Obamacare was not a bill for raising revenue. Nonetheless, they agreed with the outcome of the case because, while, in their view Obamacare, which will raise some 490 billion dollars in revenue for the general fund of the United States, was clearly a bill for raising revenue, the bill that became Obamacare actually did originate in the House.

Of course, the original legislation that became Obamacare was a proposal to provide relief on home financing to veterans and service personnel. After that bill passed in the House, the Senate took the bill and gutted everything to do with assisting veterans and service members. In place of the veterans' assistance language, the Senate substituted the text that became the health care insurance overhaul legislation. F

The Supreme Court grants review in fewer than 100 cases most years. The number is substantially lower than under Chief Justices that preceded William Rehnquist. Still today, the likelihood that a case will be reviewed is substantially greater where the federal appeals courts are of a divided view on the legal question at issue in the case.

In the contraceptives cases, the division of the Circuit Courts of Appeal make the likelihood of a further decision from the Court substantial. At the same time, the Court has the power to decide cases only on the papers -- without full briefing and argument -- this is what the Court calls summary disposition. The contraception cases require the Court's attention to resolve the division among the Courts of Appeal. The Court could, however, summarily dispose of the cases by invoking its earlier decision in Burwell v. Hobby Lobby. (That summary disposition is not highly likely, but is at least possible.)

In the Origination Clause case, the chances of review are substantially lower. I say that, not because the argument is wrong, or the case unworthy of consideration. It just reflects the reality of a limited resource -- the Court's time and attention -- and the need to accomplish such ends as maintaining a uniform application and understanding of federal law. At this point, the appeals court in Washington, DC, is the only one to have ruled on the Origination Clause. [In Hotze v. Burwell, a case from Texas and decided by the federal appeals court there, a physician offered the same Origination Clause argument as did Sissel. In Hotze's case, however, the Fifth Circuit dismissed the appeal and directed the trial court to dismissed the lawsuit. The appeals court did not decide the Origination Clause argument because the court concluded that Hotze was not a proper party to bring the lawsuit.]

While court watchers may wonder whether the justices wince when requests for review in highly contentious cases keep returning to the Court, Abraham Lincoln explained once that it was the Court's unavoidable duty to decide cases properly before it:

At the same time, the candid citizen must confess that if the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal. Nor is there in this view any assault upon the court or the judges. It is a duty from which they may not shrink to decide cases properly brought before them, and it is no fault of theirs if others seek to turn their decisions to political purposes.

In like vein, though it might pain them to undertake the process so soon again, the duty of the justices is to decide these cases. It would be nice, however, if, from time to time, they would decide them correctly. Perhaps by next Spring we will have reason to congratulate the Court on doing so.

The Idiots We May Yet Prove to Be

Do you understand how you were duped?

Do you understand why it was convenient to get you to think that we could give everyone that didn't have health insurance that health insurance they didn't have, and that we could give you more extensive coverage than you had, without TAXING you?

You do see, don't you, that this is precisely what happened with the enactment of ReidPelosiObamacare?

They told you 40 million American were going without health insurance.  They talked about insurance issues at the margins. By this, I mean, the issues of pre-existing conditions exclusions and life-time caps on coverage. 

They omitted emphasizing to you that the 40 million included millions that CHOSE other approaches to health care than to have a health insurance policy. 

They omitted reminding you that many instances of "pre-existing conditions exclusions" were not LIFETIME DENIALS of coverage, but were, instead, limited periods of 90 days or 6 months, at the beginning of an insurance policy's coverage, for existing, diagnosed medical conditions. 

Instead, they relied on your willingness to believe the most horrible things about INSURANCE companies ... something you are willing to do because, GOD CURSE THOSE COMPANIES, they are for-profit companies, designed and intended to provide a return on investment to their shareholders.  And, as you might be willing to admit, you don't like the idea that someone creates a business, builds it up, sustains it, even in the face of close, scrupulous regulation (insurance companies are among the most closely regulated business), and make a profit from that business.  Why should they profit off of the misery of others? You may have even asked yourself that question.

So, when the idea of increased cost got hidden behind the idea of imposing additional layers of taxation of insurance companies, and further regulation of those companies, you kept quiet.  After all, you didn't have skin in the game.  You had Boyking's promise, "If you like your coverage, you can keep your coverage.  If you like your doctor, you can keep your doctor."  Obviously, with promises like that, you were smugly satisfied to know that the evil insurance companies were being brought to heel, reigned in, and forced, essentially to disgorge profits they were unjustly creating by their scheme of pre-exclusionary denials and lifetime coverage caps.

Of course, it was a scam. 

No provision of ReidPelosiObama compels PRICE CONTROL on insurance companies.  The laws of economics in a free economy authorize a producer of a product to include in the retail price of the product it sells the costs of producing the product.  For example, media coverage suggests that the McDonalds Corporation maintains a pricing structure that produces a profit margin of 15 %.  To clarify what that means, think about that dollar menu.  If you buy a McDouble, and it if is priced to support a 15 % profit margin, McDonalds all-in cost for the McDouble is about $ 0.85.  Selling the burger for a dollar would produce a $ 0.15 profit.

Now, imagine a bovine disease killing 1/10th of America's cattle herds.  The price of beef will increase due to reduced availability and unreduced demand.  Or, imagine a spike in fuel costs, fuel being necessary for transporting cattle to slaughterhouses and beef to market.  As a consequence, do you see how the all-in cost to produce a McDouble could easily increase to $ 0.95?  What will McDonalds do?  It can absorb the cost, of course, and businesses often make a business judgment that it is necessary to reduce their margin of profit.  In the long run, however, if McDonalds Corporation's earning expectations are going to be met, if its shareholders are going to be rewarded for investing their nickels and dimes, then the price of the McDouble will have to come up.  In fact, to maintain McDonald's profit margin, it will have to rise to $ 1.10.

Set aside the supposed MORAL question of whether health insurance companies should be in the business of making profits.  I know some of you will say that the obvious answer is that they should not, and I'm not writing this post to challenge that decidedly unbiblical notion.  This post simply reaffirms what, in the absence of driving notions of greed and jealousy, you would have seen as obvious when this whole debacle of ReidPelosiObamacare was pushed through the legislative process.

For now, we have an economic system that has not converted fully to a statist, command control mode.  To be sure, we are far closer to socialist control of the market than we are to free market principles; likewise, to be sure the teaching value of ReidPelosiObamacare -- for the Statist -- is that you have agreed with their wisdom, risen from your stupidity, and begun to accept as a certain truth a principle that just isn't so:  namely that producers of a product can be forced to absorb additional costs of production of a product or provision of a service, while not increasing the PRICE YOU PAY. 

Of course, to the dismay of Democrat Party faithful, like Senator Mary Landrieu, who supported ReidPelosiObamacare and soon to be former Senator Kay Hagan, the Making Health Care Unaffordable Act actually began to take effect.  When it did so, it operations immediately began to deform the market from the shape it had taken when operating on principles closer to free markets. 

Individual choices on health care funding were immediately restricted.  This reduction in liberty was accomplished by reducing your ability to reduce personal income tax liabilities by shifting some earnings from your paycheck to medical expense accounts.  In a previous job, I was able to set aside $ 7,000.00 a year for unplanned but predictable medical expenses.  Yes, you see, even with existing health coverage a family of ten will incur predictable but uncovered costs, including co-pays on office visits, prescriptions, and specialty diagnostic services such as MRIs.  By deferring that income into such an account, I did not pay income tax on it.  Of course, I also did not have access to that money to buy McDoubles, or to purchase a new car, or the like.  But I could meet the regular, dependable additional costs of health care that we faced as we raised our family. 

Why would there be a scheme that allowed you to earn money, not receive it in your paycheck, and spend it only on medical related expenses?  Well, obviously, it was a system that rewarded careful thought, consideration, and forward planning.  We knew, for example, with our brood, that broken arms, cavities, eyeglasses, sniffles and sneezes, would be a recurring part of life. We also knew that only an all encompassing and impossibly expensive health care insurance plan could meet every eventuality of life. The tax avoidance scheme didn't reward us with a Cadillac Escalade (or with the health insurance version of one).  It didn't reward us with a week vacation to Disney World.  Instead, it "rewarded" us with the ability to meet some of those marginal expenses of health care that insurance -- if it was to be priced reasonably -- simply could not cover.

But ReidPelosiObamacare ended that program.  Well, it reduced it so that the amount an individual could defer from taxation into such accounts was reduced to about $2000.00 a year.

What is the net effect of doing that?

The net effect of that is to reincorporate any amount exceeding $2000.00, amounts previously excluded from income back into one's income.  Do you follow?  In other words, it INCREASED THE TAXABLE INCOME of persons that had, previously, avoided taxation by directing some income into forward-thinking, sensible approaches to provide for health care uncertainties.  As a result, additional REVENUES were generated to the government.  By the way, doing this, FORCING EARNINGS back under taxation, did not reduce contingent medical expenses for us or for anyone else.  Eyeglasses still cost money ... until the next Boyking or Girlking takes the throne and tells optometrists and opticians that they have to give eyeglasses away.  MRIs still carry costs and co-pays.  So, to fund other activities of the federal government, ReidPelosiObamacare ended that program.

Marginal plans were identified as not meeting minimum requirements of ReidPelosiObamacare; those providing them were required to make changes.  A hard-working young man of my long acquaintance, my son, James Henderson, lost his health insurance coverage previously available to him through his employer.  In fact, millions did, and that is even before the "employer mandate" takes effect.  Companies like Home Depot, Walgreens and Trader Joes, that had provided health insurance coverage for its less-than-fulltime staff had to come to grips with the new Statist reality and dumped their employees out onto the market.

The reality immediately smacked Democrats in the face. THEY FOISTED THIS STATIST IGNORANCE on the Nation, and had already taken a beating in the 2010 Congressional elections, where Republicans were swept into control of the House.  The boyking immediately began a self-preservation program of changes, deferrals, delays, exclusions and limitations to the LEGAL REQUIREMENTS of ReidPelosiObamacare.  These actions were not taken because the Boyking realized the error of his way.  They were done only in a failing effort to "preserve future political viability" for himself and for no other reason whatever.

And all this happened because, in fact, Americans often do not closely tend the garden of our society.  In fact, over time, Americans have oddly begun to treat the vegetable plants in the garden -- businesses that produce goods and services -- as weeds, and the weeds in the garden -- government regulation that stifles growth and opportunity -- as prized petunias.  The "weeds" of government talk about how selfish the tomato plants are, and you begin pinching off the plant, thinking that somehow it will continue to grow the fruit you love -- blue ray players, low profile tires, hot and ready low calorie entrees, or the like.  And you manure the weeds of government, tolerating their encroachments in the garden, their noxious capacity to steal life from other plants, their demand, always increasing, for growing room.

The cure exists. 

It isn't easy, to be sure.  But the weeds have to go.  Government intrusions have to stop.  They have to be torn up out of the garden, root to tip.

For this reason, you have to rise from your slumbers.  You have to educate yourself to the present danger.  And you have to hold Republicans, now coming into command of the entire Congress, accountable.  They must undo ReidPelosiObamacare.  Not by dribs and drabs.  To do a piecemeal repair of the travesty is to admit the inadmissible, that such encroachments are wise or warranted.  They are not.  This is a ground upon which we can stand.  This is a ground on which the Congress can stand.  This is a ground on which we can judge our own collective wisdom in giving them this great responsibility.

Or we can prove Mr. Gruber correct and proceed like the idiots he thinks we are.