Posts Tagged ‘Jonathan Cohn’

Skeptical Federal Appellate Court Hears Arguments on the ACA

Wednesday, August 3rd, 2011

Attorneys representing 26 states – with Florida taking the lead – locked horns with the Obama administration in the U.S. Court of Appeals for the 11th Circuit over the constitutionality of the Patient Protection and Affordable Care Act (ACA).Florida, 25 other states and the National Federation of Independent Business claim that the “individual mandate” violates the Constitution’s Commerce Clause by requiring that Americans buy healthcare insurance or pay a penalty.

Arguing for the Obama administration was acting Solicitor General, Neal Katyal, who said “People are seeking this good already in untold numbers.  The good of healthcare.  It’s purely financing.  It’s about failure to pay.  Not about failure to buy.”  Katyal pointed out that the 50 million Americans who currently lack healthcare insurance too often end up in emergency rooms for medical treatment, driving up costs.  Defending the law, Katyal emphasized the special nature of healthcare and the insurance market today.  He said billions of dollars incurred by people without insurance are passed on to people who carry insurance.  Arguing for the states, attorney Paul Clement conceded that the government can enact laws that people acquire healthcare insurance, but not until they need medical care.  Prior to that, “they’re not engaged in commerce.  They’re sitting in their living rooms,” Clement said.

The three-judge panel seemed to be skeptical about the government’s position. “I can’t find any case like this,” Chief Judge Joel Dubina said.  “If we uphold this, are there any limits” to the federal government’s power?  Judge Stanley Marcus said “I can’t find any case” in the past where the courts upheld “telling a private person they are compelled to purchase a product in the open market…Is there anything that suggests Congress can do this?”

So far, three federal district judges have upheld the ACA while two have ruled it is unconstitutional.  Three cases were heard by appeals courts, with a fourth appellate panel planning to hold a hearing in September.  The current case has attracted the most attention because it involves 26 state attorneys general who jointly challenged the law.  Additionally the Atlanta-based 11th Circuit is considered one of the nation’s most conservative federal appellate courts.

If any appeals courts declare the law unconstitutional, the case likely would be heard by the Supreme Court — perhaps during the election year.  Legal experts believe the 11th Circuit is more likely to rule against the administration.

The hearing was a government appeal of a decision by Florida-based U.S. District Judge Roger Vinson that ruled against the insurance mandate and voided the healthcare law.  According to Vinson, the mandate exceeded Congress’ power to regulate commerce because, instead of involving the usual “economic activity,” it targeted “inactivity,” in other words, someone’s decision not to purchase insurance.  This case is high profile because it was brought by more than half of the states; additionally, it tests an unprecedented lower-court ruling that invalidated the entire law.

One of the appellate judges asked Katyal if there are there any limits on Congress’s power to compel people to act. “Absolutely,” Katyal replied.  “We are not saying that Congress can force somebody to buy something and that failure to do so is economic activity.  People are seeking that good already,” he said.  Katyal said $43 billion is spent annually on care for the uninsured.  “That’s quintessentially economic,” he said.  Clement argued that the crux of the issue is whether the federal government can regulate individuals.  “For 220 years, Congress never saw fit to exercise that power,” he said.  “The whole reason we do this is to protect individual liberty.”  According to Clement, the Commerce Clause regulates people engaged in commercial activity and does not force them to engage.

Writing in The New Republic, Jonathan Cohn is reluctant to say how he thinks the court will rule.  “I didn’t hear the entire oral argument, which C-Span helpfully broadcast.  (Note to the federal judiciary: There’s this thing called the internet and it can transmit audio files.)  But I, too, came away genuinely uncertain how the court will rule.  The judges seemed a lot more ornery during the questioning of Katyal than they did during the questioning of Paul Clement, the former solicitor general arguing on behalf of the states filing the lawsuit.  But the actual substance of those questions – and some side comments that the judges made – suggested they were ready to reject essential pieces of the legal challenge.  Particularly striking were a series of comments from Frank Hull, in which she (yes, Frank is a ‘she’) stated repeatedly that she did not agree with the ‘activity-inactivity’ distinction opponents of the law have made.  As those of you following this case know, that’s really the heart of their argument:  They say the decision not to buy insurance is a form of ‘inactivity,’ which means the government may not regulate it.  Supporters of the law, including the government, disagree.  And Hull seemed to side with them, saying (roughly, given my sketchy notes):  ‘When I decide I would rather spend my money differently…that I would rather buy this product than pay for health insurance…that’s an economic decision…How can that be anything other than an economic decision?’”

High-Deductible Health Plans Equal Less Healthcare

Tuesday, May 3rd, 2011

Americans who have high-deductible health plans tend to not get necessary medical treatments whether they are low-income people with chronic health problems or healthier or higher-income people, according to a study by RAND, a non-profit research group, and Towers Watson, a consulting firm.  The researchers analyzed healthcare claims data from 59 large companies, examining first-year experiences with high-deductible plans comprised of more than 800,000 families nationally between 2003 and 2007.

Medical spending declined among all families with high-deductible and consumer-driven health plans, compared with those in traditional plans, according to the study published by the journal Forum for Health Economics & Policy. Families who live where the median income is 200 percent less than the federal poverty level, and those with one of the five most costly chronic conditions — cancer, diabetes and heart disease — spent approximately the same on healthcare than families with high-deductible plans.  The families all had at least one member working full time in a job that included health benefits, the researchers noted.

“One important issue is whether high-deductible health plans will leave low-income and chronically ill patients with inadequate access to healthcare,” Amelia Haviland, the study’s lead author and a RAND statistician, said.  “The evidence suggests that non-vulnerable families, low-income families and high-risk families are equally affected under high-deductible plans.  We discovered that costs go down dramatically during the first year people are enrolled in high-deductible health plans, as long as the deductible is at least $1,000 per person.  “But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care.”

The researchers determined that deductibles of at least $1,000 per person led to an average of a 14 percent decrease in spending when compared with families who had lower deductibles.  The RAND study notes that “The drop in preventive care happened even though the high-deductible plans in the study waived a need to pay a deductible when receiving such care.  This suggests that enrollees in high-deductible plans either did not understand this part of their policy or some other factor discouraged them from getting preventive care.”

According to the RAND study, “High-deductible and consumer-directed health plans have been gaining favor as one way to help control health care costs.  By 2009, about 20 percent of Americans with employer-sponsored health coverage were enrolled in such plans.  A 2010 survey found that more than 54 percent of large employers offered at least one high-deductible health plan to their employees.  Healthcare reform is expected to further encourage enrollment in high-deductible health plans as such plans are expected to be a key offering in the insurance exchanges being set up in many states to help the uninsured find health coverage.”

As families cut their medical spending, they eliminated some forms beneficial care, the researchers found.  Although childhood vaccination rates rose in families who had traditional health plans, they fell among families in high-deductible health plans.  Mammograms, cervical cancer screening and colorectal cancer screening also declined among those with high-deductible health plans.

Writing on Kaiser Health News, Jonathan Cohn, Senior Editor of The New Republic, says “Conservatives think traditional health insurance provides too much financial protection from medical expenses.  They also think that the Affordable Care Act will make this situation worse.  That’s one reason they want to repeal it.  The problem, according to the conservatives, is that insurance dulls the average person’s consumer instincts.  When medical care is cheap or free, people don’t bother to shop around for the best prices — and they don’t think twice before seeing the doctor.  In other words, they end up with too much care at too high a price.  Insurance and government programs spread that cost around, so that eventually all of us end up paying more in the form of higher premiums or taxes over which we have little individual control.  The solution, as this argument goes, is to redesign insurance so that it forces people to pay more out-of-pocket expenses.  And, within reason, it’s not a bad idea.  Most economists, even those on the left, would agree that excessive coverage leads to higher health care spending.”