Health Care Reform Debate
Articles,  Blog

Health Care Reform Debate

Hello, thank you for being here today, for
discussion slash debate on healthcare in America. We’ve got a couple great speakers today, leaders
in their field. But before we get started, I want to announce a couple other events that
we have coming up. On April 1st, Professor Patrick Geary will be here to discuss the
separation of church and state, and on April 20, former Solicitor General of Texas, the
Honorable James C. Ho will be here to discuss the pros and cons of birthright citizenship.
So I hope all of you can make it for that as well. I also like to thank Andy Albertson
and Michelle Pang for helping to put this event together, and the Federal Society National
Organization for their support, as well as the John Templeton Foundation for their special
funding for today’s event and for the lunch. I’d also like to thank Professor Tachikawa,
who’s traveled here from Japan, probably for the pizza, like most of you. But thank you
for being here, Professor. I guess before we get started, the way that this event will
happen, both speakers, or each speaker will take twelve minutes to present their side
of affordable care or Obamacare, and each will have six minutes to rebut the other’s
presumptions and premise. So to get started, let me introduce our speakers. We have Ilya
Shapiro with the Cato Institute in Washington, D.C., by way of Canada and Russia. Mr. Shapiro
is– Ilya Shapiro: And Mississippi. And Mississippi. Mr. Shapiro is a Senior Fellow
at the Cato Institute and editor-in-chief of the Cato Supreme Court Review. Before joining
Cato, Mr. Shapiro was a special assistant and advisor to the Multi-National force in
Iraq on rule of law issues and has practiced privately in international, political, commercial,
and antitrust litigation. He’s a regular contributor to a variety of media, including the Washington
Times, the LA Times, National Review online, The Daily Show, or excuse me, The Colbert
Report, Comedy Central, CNN, Fox News, et cetera. Mr. Shapiro will be arguing in favor
of the Constitution, liberty, freedom, and all things sacred. Not all things sacred. I only have 12 minutes. 12 minutes. 12 minutes’ worth of all things
constitutional. Professor Leflar, our very own Professor Leflar here, is a leader in
his field as well. Professor Leflar teaches an introductory torts class as well as health
policy, bioethics, products liability, and a variety of other topics. Professor Leflar’s
CV is also extensive, and we all know he is an institution here at Arkansas. So please,
help me welcome our speakers today, and at the conclusion of their presentations we’ll
open it up for questions to the audience. [ Applause ] Mr. Shapiro — I’m sorry, Professor Leflar,
you’ll go first. I’m gonna move over here so I can see his
slides. Well, thank you, Josh. Thanks to the Federalist
Society for putting on this event, and to our distinguished guest, Mr. Ilya Shapiro,
for coming to Fayetteville. He had to come through bad weather, a long delay in Chicago
last night, and he got here for this healthcare reform debate. We really appreciate your presence
here. Mr. Shapiro is clearly one of the nation’s foremost and well-known critics of the new
healthcare law. He speaks at law schools around the country. He’s written friend of the court
briefs attacking the law, and he’s also an advocate at the state level. In fact, this
January he submitted testimony in favor of some unsuccessful legislation right here in
Arkansas, to take Arkansas out of the individual mandate. That was a bill officially titled
the Arkansas Healthcare Freedom Act, but which might better have been labeled the Arkansas
Healthcare Freeloaders Protection Act. And I’m going to have more to say about healthcare
freeloaders in a few minutes. Healthcare reform is a pretty complicated subject to cover in
a single hour, much less 12 minutes, but here’s how I’m going to try to do it. I’m going to
— my first turn I’m going to speak to the merits of the new law, the Patient Protection
and Affordable Care Act, which I will call by its acronym, PPACA. And first, since its
content has been so widely misrepresented and misunderstood, I’m going to briefly set
out the facts about what the law does and what its impact on Arkansas are going to be.
Second, I’m going to address what everybody wants to hear about, the part of the law that
says, come 2014, people have to have health insurance or pay a penalty or a tax. And I’ll
explain why that makes sense in terms of both ethics and economics, and why people like
Mr. Shapiro, who want to repeal it or strike it down, are really lobbying and lawyering
on behalf of the irresponsible freeloaders who want to foist most of their healthcare
expenses on the rest of us. And then third, and this will probably come in my second turn
up, I’ll speak to the constitutional litigation over the law as to which Mr. Shapiro is much
more of an expert than I am. Now, here’s how the Federalist Society publicized this debate
around the law school at least, and I love this. I think it’s hilarious. And I see a
lot of law students here, so I guess it must have been a pretty effective marketing tactic
as well. But let’s get real. Here is what PPACA actually does. As most of you know,
it has no socialism whatever in it. We are not setting up a national health service where
most doctors work for the government, as they do in Britain. In fact, what we’ve got is
an imperfect but more or less intelligent set of middle-of-the-road policies, many of
which the Republicans themselves used to espouse before the Tea Party days. So the first thing
that this law does, is it goes most of the way toward addressing the worst disgrace of
American healthcare, the fact that about 50 million Americans don’t have health insurance.
The law doesn’t get us all the way there. It only reaches about two-thirds, or not quite
two-thirds of the uninsured. So we still won’t have caught up with western Europe or Japan
or Taiwan or Australia or Canada, which all have universal coverage. But it does get us
most of the way there. In expanding coverage, the emphasis is on primary care, preventive
care, family medicine, the kind of care that will save hospital bills in the long run.
PPACA outlaws the cruelest practices of the health insurance industry, practices like
yanking away your insurance if you develop a medical condition and need care, or saying,
sorry, you’ve reached your annual limit or your lifetime limit, and we’re not going to
cover the expensive surgery or the chemotherapy that you need, or hiking premiums to unconscionable
levels for people with medical needs. Every other country, every other advanced country,
bans those practices and now, finally, America does, too. PPACA sets up an organized marketplace
called the Exchange. So people who don’t get insurance through Medicare, Medicaid, or their
employer, can comparison shop for their insurance through private companies. The idea is like
going to Expedia or Travelocity to get your air tickets or your hotel. You go to the Exchange
for your health insurance, and it’s open both to individuals and to small businesses. This
is capitalism in action. It’s better organized and better regulated, so consumers and small
businesses don’t get screwed on individual and small group policies, like is so common
now. Now, expanding coverage to 32 million Americans who don’t have it, costs a lot of
money — roughly a trillion dollars over ten years at a time of serious concern about the
national deficit. But that cost is paid for. Who pays? Well, most of the revenue comes
from the wealthy people, couples that make over 252 thousand a year. They get a zero
point nine increase, nine percent increase in Medicare withholding, a two point nine
percent increase in unearned income tax; also, the companies that will benefit from all the
new customers; the drug companies, the medical device companies, the health insurance industry,
they have to pay in. The nonpartisan Congressional Budget Office estimated that in the long run,
this bill is better than revenue neutral. It reduces the deficit. According to the CBO,
scrapping the law would have the effect of piling on more red ink by far onto the federal
budget. This law is not perfect. It contains many a compromise, like any complex law. But,
I think it moves America in the right direction toward giving every American the right to
at least a fair basic level of healthcare. Now, the Arkansas impacts. The law’s nationwide
benefits are evident, but the law disproportionately helps states like Arkansas that have relatively
low income and lots of small employers. Most Arkansans in the private sector work in small
businesses or for themselves, and most of them don’t have health insurance as a job
benefit. Now, here’s how Arkansas compared with the rest of the country on health insurance
through employment in 2005, and the numbers are quite a bit lower now, in 2011. A lot
of people have lost their employment coverage. So, people have to go to the individual market,
where premiums are much higher. You get a worse deal for your money, if you can afford
it at all, and the insurance companies often yank the rug out from under you when you need
care the most. Mr. Shapiro, we’ve got more than half a million uninsured working-age
people here in Arkansas, and most of those uninsured people, two-thirds of them, are
not unemployed; they’re not welfare recipients. These are people in families with full-time
workers. So you might say, well, hey, they can always go to Medicaid’s, get their healthcare
that way. Well, if you think that, sir, you would be wrong. It’s true that three-fifths
of Arkansas children do get their healthcare through Medicaid, through our Our Kids program.
But, among adults, care for the blind and disabled, you only qualify for Medicaid in
Arkansas if you have income less than seventeen percent of the federal poverty level. And
for a family of four, that amounts to 3,750 dollars — not per month; per year. So in
Arkansas, if you’re an adult and you have an income, your family of four has an income
of 4,000 per year, Mr. Shapiro, you are too rich to qualify for Medicaid. Now, the health
reform law is going to change all that. Instead of qualifying for Medicaid at seventeen percent
of federal poverty, it’s going to be 133 percent nationwide, about 29,000 dollars for a family
of four. Now, there’ll be federal assistance with premiums for people with incomes above
29,000 dollars on a sliding scale. So basic preventive care, affordable care, is going
to be available to almost everyone. Right now, five out of eight bankruptcies in the
country are linked to medical bills. Under PPACA, that will largely be a thing of the
past. Now, we come to the most controversial part — the individual mandate. And first,
I’m going to explain exactly what that is; and second, I’m going to explain why it’s
there; third, I’ll point out why Mr. Shapiro’s solution, trash the mandate, would simply
protect healthcare freeloaders and would undercut the whole structure of the law because of
the operation of the vicious cycle of adverse selection. Now, here’s what the law actually
provides. First of all, U.S. citizens, legal residents, have to have healthcare coverage
starting in 2014 or else they have to pay — you can call it a tax, a penalty, whichever.
The amount of that is about 700 a year, up to a max of 2,100 per family or two and a
half percent of household income. Note that that’s a lot less than you got to pay for
healthcare insurance. That’s how you can have the choice to go and pay that penalty instead.
And the penalty phases in starting with 95 bucks in 2014, and then up to the rest of
it in 2016. Now, so what you see is that mandate is really the wrong word, because you can
choose to pay the penalty. Insurance is not compulsory. That’s a point that critics of
the law generally don’t point out. So what it is really is play or pay. It’s your choice.
But as an ethical matter, people ought to play even if paying the penalty saves them
money. And here’s why. For me, the point is personal responsibility. None of us can tell
when we’re going to be in a car crash or come down with cancer or some other expensive chronic
illness that we don’t have the personal resources to pay for, unless we’re Bill Gates or somebody
like that. Choosing not to buy health insurance that’ll cover the cost you can’t afford if
you fall ill is the ethical equivalent of choosing not to buy the vehicle liability
insurance that’ll cover the cost you can’t afford if you hit somebody. Simple as that.
Well, you might say even if I don’t buy health insurance, I can always go to the emergency
room; get care there. Well, that’s true, thanks to the federal anti-dumping law. And lots
of people do. More than half the acute doctor care visits made by patients without health
insurance were to emergency rooms. But that’s expensive, and that’s not as good as regular
primary care. You’re missing the preventive care that would have detected the cancer or
the heart disease, so you wind up with expensive hospital care and unnecessary illness and
preventable death. And who pays for that expensive hospital treatment that could have been avoided
by proper preventive care? Well, the uninsured do pay for some of it — about a third. And
the rest is paid by government, by charity, by cost-shifting to insured patients; in other
words, by the rest of us. We all pay for it through higher premiums and taxes. So the
people who don’t buy health insurance are foisting their bad luck or their failure to
take care of themselves on the rest of us. They’re freeloaders. It’s irresponsible. And
this is the point that Republicans in the 1990’s healthcare debate understood full well.
This is the point that Republican Governor Mitt Romney of Massachusetts fully understood
when he put through that state’s reform, including the individual mandate. It’s the point that
Senator Charles Grassley, ranking Republican member of the Finance Committee in the Senate,
fully understood in his negotiations over PPACA. Mr. Shapiro, I always believed that
Libertarians did for individual responsibility, but when you support the Arkansas Healthcare
Freedom Act, when you seek the repeal or overturning of the individual mandate, then what you’re
doing is you’re protecting the freeloader’s right to burden the rest of us with their
risks. As Governor Romney said when he signed the Massachusetts law, a free ride on the
government is not libertarian. So here’s the point. The ethical policy recognizes that
we all need healthcare; everybody should chip in. Those that have a hard time paying for
all the premiums, well, we’ll help them out to some extent. I think that’s the right thing
to do. And Mr. Shapiro, I respect your right to disagree, so have at it. I’ll talk about
the rest of these points on my second turn up. [ Applause ] Well, thanks very much for having me. I don’t
have any PowerPoint slides. In fact, I consider PowerPoint to be unconstitutional, and I hope
all of you are enjoying your pizza. I know that’s why at least the law students among
you are here, and I appreciate that. I remember being a law student. Enjoy it while it lasts,
because at some point in future you might have to have salads for seven days before
you’re allowed to purchase a pizza, or something like that. And also, it’s very interesting
having this debate at the University of Arkansas, where my debate opponents name is on the law
school, his father, but still, it’s a little intimidating, and of course, the place where
the Clintons were on the faculty. Now, I was in high school when HillaryCare was the issue.
A lot of you, I guess, were in elementary school. I barely remember what the issue was,
but I thought, I’m thinking about the Democratic primaries this last time around, and I thought
that the Democrats did not choose the candidate that wanted to have the trillion-dollar bailout
of insurers and pharmaceutical companies, impose all this complicated new regulation
and whatnot. Maybe Hillary was elected, after all. We kind of live in a bizarre universe.
But look, I’m a simple constitutional lawyer. I don’t have the healthcare policy expertise
or healthcare law expertise that Professor Leflar does. In fact, I’ll stipulate to every
policy argument and healthcare regulatory argument that he wants to make. You want to
debate alternatives, policy alternatives to ObamaCare, ask my colleague, Michael Cannon
or Mike Tanner or any number of people across the country who specialize in this sort of
thing. This debate is not about healthcare; it’s about the Constitution. It’s about the
first principles under which we live. It’s about whether our federal government is one
of delegated and enumerated and therefore limited powers, or one of a general police
power, like the states have. I’m sure one of the few things that Professor Leflar and
I will agree on here is that the status quo is not acceptable; the horror stories about
Arkansas children being covered and making 4,000 dollars a year — all of that, that’s
bad. We shouldn’t have a situation where that’s the case. The technical legal term for our
existing pre-Obama care system is that it sucks. That’s the term of art that I would
use. Now, that doesn’t mean that anything to replace it is either good policy or constitutional,
and of course, those are two separate questions. And it doesn’t mean that the only alternatives
are status quo, universal government single payer, or ObamaCare. There are plenty of different
policy proposals that have been on the table. You can read Cato. If you don’t like Cato,
you can read other people. There’s different ways of reaching the goals of accessibility
and coverage and cost control and all these different things. We have a very perverted
system. Nowhere in the world has your healthcare been tied to your employer. That’s dumb. It’s
an accident of history, because we had wage and price controls during World War II, and
employers to compete for workers, started offering perks because they couldn’t increase
salaries, and one of those perks was healthcare. And that’s where it was built; get rid of
that tax incentive for employers to do that and you’ll have a much more robust system
for people to buy health insurance, just like they buy car insurance. Your car insurance
isn’t tied to your employer; why should your health insurance be? Which raises the point
about the mandatory car insurance, just to get that off the table. Two things there.
First of all, it’s states that impose that requirement on you, not the federal government.
Again, states have police powers to legislate for the health, safety, and welfare and morals
of their populace; federal government doesn’t, gets its powers, the enumerated, 18 enumerated
powers in Article I Section 8 of the Constitution. This is Cato Constitution, by the way. It’s
a two-for; you buy the Constitution, you get the Declaration of Independence for free.
And secondly, if you don’t drive, or if you don’t drive on public roads, you don’t have
to buy car insurance, though. It’s uncontroversial that driving is a privilege, not a right,
and it’s a choice. Requiring, states requiring someone to buy health insurance because they
choose to drive is very different from the federal government requiring you to buy health
insurance because you’re alive. And I’m glad that all of you are here. I’m glad of the
— heartened by the continued sustained interest in this debate across the country and the
commentary and the e-mail exchanges that I have, because you’re clearly showing that
you’re wiser than Nancy Pelosi, who was asked what she thought about the constitutional
concerns, and the response of course, was, are you serious? Because the Constitution
is the last refuge of the scoundrel that doesn’t have any policy arguments to make. We’re in
a post-constitutional world, where Congress doesn’t have any limits, other than what it
judges is in the general welfare. As John Conyers called it, the good and welfare clause;
if Congress thinks it’s good, then it’s obviously constitutional, unless it makes the argument
that it infringes one of these so-called fundamental rights that take, five judges take a vote
on the Supreme Court and then it becomes fundamental, and so forth. And that’s why this debate is
about federal power rather than individual rights, because the Court’s jurisprudence
forecloses a lot of the type of freedom of contract and economic liberties and so forth,
arguments that could be made on the right side. Now, on the power side, I was heartened
to see if any of you have read, skimmed at least, Judge Vincent’s decision in the Florida
case last month, the 26-state lawsuit. There are now 28 states challenging ObamaCare. Those
26 down there are plus Virginia on its own, Oklahoma on its own. That’s unprecedented.
There’s a lot of things unprecedented about this case, but it’s unprecedented to have
a majority of states suing the federal government for something like this, on a fundamental
piece of domestic legislation. But you look at the beginning of Judge Vincent’s opinion.
Before you even get into the legal analysis, and he quotes from my favorite part of the
Federalist papers, or maybe any part of political theory. Federalist 51, right. If men were
angels, we’d live in Utopia; we don’t need a constitution; we don’t need anything; everybody’s
happy. If angels ruled over men, fine; we’d have perfect government, good. Again, don’t
need a constitution, everything, we’d go about our lives, but the angelic government would
do everything right. But in the real world, where it’s men governing men, we first have
to empower the government to govern in certain legitimate areas, and then check it. Right,
that’s our whole theory. That’s our whole basis on which this republic was founded;
checks and balances, separation of powers, federalism. All these different concepts stem
from the idea that we don’t trust the government. Yes, we need it, because the Articles of Confederation
wasn’t working; we need a central government to protect the national defense, to regulate
interstate commerce. Wait, what does that mean? To make commerce regular. It turns out
that states were putting up all sorts of protectionist barriers to trade among themselves under the
Articles of Confederation. So clearly, we need a federal government to strike down those
barriers. That’s the basis of the Commerce Clause. It wasn’t an authorization for Congress
to start regulating. That’s changed; that’s shifted, but the original conception of the
Constitution, one that survived even through modern doctrine, is that we are a government,
the Congress, the federal government has limited powers, and it can’t go beyond those. There
has to be some limiting principles that’s left. The other powers are retained by the
states and the people. If the individual mandate at least — there are other claims against
ObamaCare — but if the individual mandate is allowed to stand, ladies and gentlemen,
then there are no principled limits left on federal power. You throw out the Constitution,
and you leave it to Congress checking itself. You throw out checks and balances, courts
have no role because we have to defer to Congress, and it’s wise judgment of what its own powers
are. Because what is the government’s theory? That two courts have accepted, right, the
kind of score — this isn’t how we do law — but the score in the district courts are
that two went for the government; two went for the challengers, right, and those are
now up on appeal. But the government’s theory that these two courts have accepted was that
the decision not to purchase health insurance is an economic one, that in the aggregate
has a substantial effect on interstate commerce. Well, that’s not a limiting principle, because
anything — the decision to do or not do, buy or not buy, anything, is an economic decision
that in the aggregate has a substantial effect on interstate commerce. My decision to fly
here yesterday, my decision to not go to Starbucks today; your decision to go to law school.
What’s more related to interstate commerce than your decision to go to law, your choice
of a profession? We have a big immigration problem, right, so why don’t we with one fell
swoop solve that and solve the problem of us having a too litigious society by saying,
this half of the room, you no longer can go to law school; you have to be gardeners, and
this half has to be bus boys and then we deport all the immigrants, and all these problems
are solved, because Congress can regulate these economic decisions that you’re making.
These are affirmative economic decisions. This isn’t sometime in the future that you’ll
need healthcare. You’re already in law school affecting the interstate economy. This goes
beyond anything that Congress, the federal government, has ever tried to do. Never, I
repeat never — and the CBO in 1994, when it was evaluating HillaryCare, said this originally;
don’t take it from a Libertarian think tank or what have you — never has the federal
government required people to buy a good or service under the guise of regulating commerce.
It’s unprecedented. Think about the foundational commerce clause cases, right. Wickard versus
Filburn in 1942, the Agricultural Act setting quotas for farmers to meet, grow their crops
and they have to take them to market. And this one farmer wanted to consume his wheat
on his farm and not take it to market, and he was set upon by federal agricultural agents
and eventually fined. The Court okayed that, because if all the farmers who are engaging
in this sort of economic activity of farming did this and didn’t meet their quotas, didn’t
bring it to market, then that would have a substantial effect in the aggregate on interstate
commerce. But nobody had to buy wheat. You could see Congress wanted us to support the
wheat farmers or have wheat provision; everybody has to buy wheat. Well, nobody had to become
farmers. Fast forward to the ’60s, the Civil Rights Act, or the Civil Rights era, the Court
decisions that if you run a hotel, you run a restaurant, you have to serve people without
regard to race and other various protected classes. But nobody has to become a hotelier
or restaurateur. And individuals in and of themselves are not economic enterprises. Fast
forward again to 2005, the most recent Commerce Clause case. We move from wheat to weed, right,
medicinal marijuana, the Raich case. There, under the Controlled Substances Act, the national
regulation of drugs, Congress wanted to come in and shut down the personal growth and consumption
of marijuana for medicinal uses — legal under California law, under the state law. And the
Court okayed that, because they were engaged in economic activity, growth and consumption,
and if everybody did this, then that would foil the again, the national regulatory scheme.
But never under the guise of regulating Commerce, having a national scheme, has Congress required
people to engage in economic activity, to go into the private marketplace and buy a
particular product. This is very different from single payer; this is very different
from Medicare, which would be less problematic, and probably under modern doctrine not problematic
as a matter of constitutional law — as opposed to policy, which is a separate discussion,
and then you don’t want me here, because I’m not a healthcare expert. I’m a constitutional
lawyer. Whatever Congress does, whether it’s good policy or bad policy, it’s a separate
question of wherever it has — whether the Constitution grants it power to do that. Okay,
so the Commerce Clause, as I said, you can’t justify it that way. This goes beyond the
activity, inactivity, distinction. Just calling it an economic decision swallows the hole
that doesn’t leave any sort of limiting principle. Well, what about the necessary and proper
clause, right, because Congress not only gets to regulate commerce and establish post offices
and raise armies, but it also gets to do things that are necessary and proper for exercising
those other enumerated rights — enumerated powers; excuse me. Well, it turns out that
what we think of as the Commerce Clause doctrine, the substantial effects test, the outermost
bounds, under Raich, under Wickard, whatever the collected wisdom, as cabined by Lopez
and Morrison, the short-lived federalism revolution, as I call it, failed insurrection — that
already discounts for the necessary and proper clause. You can’t just, as Chief Justice John
Marshall said, you can’t just build inference upon inference and have this infinite causal
chain. This is necessary to execute this, which is necessary to execute this, which
is necessary to execute this. Going back to Wickard and the cases from the New Deal in
the ’40s, Darby and LRB, all these foundational cases, they cite McCulloch versus Maryland;
they don’t cite Gibbons versus Ogden. They weren’t a redefinition of Commerce. They were
a redefinition of what it means to be necessary and proper, that you can effect, regulate
local activity when it has a substantial effect. And so you don’t get a further necessary and
proper extension; that’s already included there. Moreover, Congress can’t create its
own necessity. It can’t rub Aladdin’s lamp and wish for infinite wishes, which is what
the argument here is, right, because you can imagine some sort of national regulation,
be it of healthcare, be it of the auto industry, be it of the housing industry, which would
only work if — insert your weird thing, the housing market collapses, so in future, everybody
has to buy a Fannie Mae approved certain type of mortgage; you can’t buy a house any other
way, to protect our national system of housing market. The next time the auto industry is
in jeopardy, we have a regulation that works only if people are required to buy a Chevy
— setting aside the issue of the government owning GM and whatnot. The same thing here.
There’s a fundamental difference between having the power to regulate an industry — here,
the healthcare industry, requiring coverage of this and that, having certain accounting
principles; in the auto industry, seatbelts requirements, fuel emission standards — and
requiring you to buy that industry’s product. That’s a qualitatively different thing. So
just because a 1944 case said for the first time — and nobody’s disputing this; nobody’s
challenging this, because who’s attacking ObamaCare — said for the first time that
Congress can regulate insurance, whereas before it couldn’t. Nobody’s attacking that, but
just because Congress can do that does not follow that then Congress can do anything
that has the word healthcare or health insurance in the bill. And finally, it’s been justified
— well, I’ll finish with the proper prong of necessary and proper. If you’re curious
or Professor Leflar raises the taxing power issue, I think that’s a red herring, because
this is a penalty. Obviously when I tell you to do something, I’m not taxing you; I’m mandating,
I’m commanding that there’s separate issues; but why this isn’t a tax, if it were a tax,
why it’s unconstitutional, et cetera, we can get into that if you’re interested. No court
has accepted this theory than the ones that ruled for the government. But on the proper
prong of necessary and proper, just like the federal government cannot commandeer state
officials to do their bidding — and for the first time in 1992 the Court held this; there
was never a state commandeering decision under the Commerce Clause or Tenth Amendment before
then — this violates the proper prong of necessary and proper, because again, there
would be no limiting principle on federal power, it destroys federalism, and Congress
can’t just go around commanding people to do things under the guise of regulating commerce.
It can in certain narrow contexts. We know what mandates we have from the federal government
— serving our federal juries, filing and paying your income taxes, registering for
selective service and being drafted. Of course, these are tied to selective, explicit exercises
of enumerations of power, not Congress exercising a power in some way to regulate commerce and
then tying it to that. So if this is allowed to stand, then we throw away the Constitution.
I guess I’m out of a job, because there’s nothing to argue about any limits or anything,
and it’s not the republic that I recognize even learning about even in my grade school
in Canada. So thank you. [ Applause ] So Mr. Shapiro’s passion carried him a little
bit longer. We’ll give you a few extra minutes. No, that’s fine. Thank you. I’m going to begin by confessing that I’m
no expert on constitutional law. I’m not a constitutional lawyer, and Mr. Shapiro is
far better grounded than I am in the arguments and the precedents. So what I’d like to do
here then as an amateur on that field, I’d like to share with you a general and admittedly
sketchy outline of what some of the country’s leading constitutional law scholars who favor
PPACA are writing. None of this is original on my part, but it does link to what I think
is at least a sensible and defensible view of our constitutional structure. Mr. Shapiro
said this debate is not about healthcare; it’s about the Constitution. Well, it’s about
both. It’s about whether the elected Congress has the power to, through the democratic process,
try to fix these difficult problems of the healthcare system’s serious deficiencies.
And my position is that the PPACA should be upheld as constitutional for two principled
reason, quite apart from the substantive merits or flaws of the law. First of all, the voters
of the United States elected Obama and the democratic Congress in November of 2008 to
get healthcare reform done. And the legislative process was a spectacularly intricate and
delicate one, but ultimately they did the job. This is how a republic works. No one
is saying that Congress passed that law by any kind of illegitimate procedure. They didn’t;
they followed the rules. And for unelected federal judges, to strike down this law, at
the least would be a profoundly disturbing invasion of the democratic process. But Mr.
Shapiro and his allies say Congress overstepped the constitutional bounds here. He suggested
that well, healthcare reform really does need to happen; coverage really does need to be
expanded. Well, so how are we going to accomplish that? Are we going to let the states do it?
Are we going to let the states finance it because Congress doesn’t have the power to
do what it did? My response is that this is a critical national problem, not one the individual
states can handle, especially states like Arkansas. And our constitution is explicitly
designed to give Congress the tools to address national problems. Now, let’s break it down
into the Constitution’s specific grants of Article 1 powers. As Mr. Shapiro pointed out,
there are some different relevant provisions in Article 1 Section 8. One is of course the
power to lay and collect taxes to provide for the general welfare of the United States.
One is the power to regulate Commerce among the several states, and then the power to
make all laws which shall be necessary and proper for carrying into execution the foregoing
powers. Now, regarding the taxing power, I’m not going to argue very much with Mr. Shapiro
over that. There’s little question that if Congress had enacted a law instituting for
example, a single payer system like Canada’s, and then paying for healthcare reform out
of general revenue, and then covering the cost by raising the income tax or the corporate
tax or whatever other tax, well, Congress would have had the power to do that under
Article 1 Section 8 Clause 1. But instead, instead of going to single payer, Congress
decided to keep the private insurers at the center of the system. And to pay for it, in
addition to the increased — under an income tax and so forth, then to help pay for it
through the play or pay individual mandate. Now, does that count as a tax under the taxing
power of Article 1? Congress didn’t call it a tax. I think probably they wanted to avoid
the political fallout of saying that they raised taxes. I don’t know what the courts
are going to decide on this, but as Mr. Shapiro said, they pretty much focused on the other
two, the Commerce Clause and the necessary and proper clause. So let’s go to the Commerce
Clause. And we’ll start right off with the sharpest attack. Can Congress regulate the
inaction of not buying health insurance? Can Congress say to us, play or pay? Well, the
first point to observe is — again, being no expert, but it seems to me this is an unplowed
juridical fields. We don’t have any direct authority one way or the other. The Supreme
Court has never suggested that inactivity that a play or pay mandate is somehow foreclosed
from general congressional authority over economic matters relating to interstate commerce.
Second, and Mr. Shapiro is candid enough to say this, there’s a strong argument that individual
consumer’s decisions not to buy health insurance now, but rather to wait until they get sick
of hurt and then try to pay the bills directly then, those are economic decisions that in
the aggregate, certainly do have a significant effect on interstate commerce. In fact, it
seems to me that that fact is indisputable. Now, Mr. Shapiro and his colleagues raised
the specter of government exercising unlimited power over individual choice. And some of
his colleagues suggest that the division between acting and inaction is one good place to draw
that line. But they would find a skeptic in none other than Justice Scalia, who in a different
healthcare context, had this to say: “It would not make much sense to say that one may not
kill one’s self by walking into the sea, but may sit on the beach until submerged by the
incoming tide; or that one may not intentionally lock oneself into a cold storage locker, but
may refrain from coming indoors when the temperature drops below freezing. Even as a legislative
matter,” Scalia says, “in other words, the intelligent line does not fall between action
and inaction.” So the point is, what affects Congress is a difficult line to draw, and
a deferential court would honor reasonable legislative judgments about when economic
activity is or is not present. Finally, the necessary and proper clause. Here, we go back
to the reasons for the play or pay mandate. Most importantly, besides the ethical reasons
against freeloading that I was talking about, are the economic reasons, and they’re easy
to understand. Requiring insurers to accept all applicants, regardless of health condition,
is a primary goal of the law. To put together a big enough pot of money to cover the newly
insured and the people that, under the present flawed system, are denied coverage or cut
off because of pre-existing conditions, well, you got to have everybody paying in. You’ve
got to include in the people that want to freeload. You’ve got to include in the healthy,
young people who think that they’re invincible and will never get sick or will never be in
a car crash. If you don’t include them all in; if only the relatively unhealthy are in
the insurance pool, then premiums go up, adverse selection takes over, more people drop out,
premiums go up more, and it’s the death spiral for cost control. That’s just how the insurance
industry, the insurance business works. So in other words, if moving the country closer
toward universal health insurance is a legitimate national goal, and if we’re going to keep
a private health insurance industry in this country, then a democracy’s legislative choice
to help finance achievement of that goal through a play or pay mandate is a necessary and proper
exercise of Congress’s Article 1 power. Thanks. [ Applause ] First of all, I should have touched on this
in my opening remarks, Professor Leflar said that buying insurance under the mandate or
the minimal coverage provision, isn’t mandatory. You have a choice. You can either buy it or
pay the penalty. Well, I’m curious whether you also have a choice when a mugger comes
up to you and says, your money or your life. We have a doctrine of unconstitutional conditions.
We understand that at some point there’s coercion. Here, there’s government coercion. What if
you don’t want to do either of those things? And just because the government could raise
income taxes or increase Medicare payroll taxes and fund all sorts of different programs
that way, does not mean that it can also force you to buy health insurance or do something
else. Each one of these is a different constitutional analysis. And it matters, because the text
of the Constitution, because without the government getting its authority from the Constitution,
then it gets it from the point of a gun, and we just have a majority rule. We have to address
Professor Leflor’s political point, a hugely unpopular bill from the very beginning, that
caused Ted Kennedy’s seat in Massachusetts to go to a Republican, that caused the rise
of the Tea Party movement. We’ve had such a weird couple of years politically, ninety
percent of which is tied to the unpopularity, which unpopularity is tied to people understanding
— they’re not just disagreeing with the policy, but asking the question, where do you get
the power to do this? There’s a video of former, thankfully, Congressman Phil Hare of Illinois,
who was asked this — one of these guerrilla YouTube people. And he said, well, I don’t
care about the Constitution. I’m trying to take care of my constituents’ interests, not
understanding the contradiction between those two statements. Now, look. The threat to democracy,
the threat to our system of government, and rule by consent of the governed, does not
come from courts striking down legislative action. They come from any part of government
not fulfilling its constitutional duties. This whole debate about judicial activism
just means a decision I disagree with. Conservatives say X, Y and Z are judicial activist cases;
liberals say A, B and C are. It doesn’t mean anything. For a judge to notice that Congress
is going beyond its constitutional power and do nothing about it, and do nothing, is judicial
abdication. And if that’s the position that Professor Leflar or any of the other advocates
for ObamaCare take, then I guess they’re against Marbury v. Madison and judicial review. What
we’re arguing is conflicting theories of the Constitution. I think we should all agree
that judges should strike down pieces of legislation that are constitutional, either as going beyond
the government’s powers or violating individual rights. And I think those two are two sides
of the same coin. Necessarily, when the government goes beyond its powers, it violates the retained
rights. Necessarily, when rights are being violated, government is doing something it
doesn’t have the power to do. On the death spiral, freeloading, cost-shifting, these
sorts of policy arguments. First of all, again, to the extent they’re valid policy concerns,
that’s a separate question from the constitutional angle. Yes, of course, you cannot require
insurers to cover people with pre-existing conditions and not have, force healthy people
to get into that same pool. I mean, by doing that, you of course, eliminate the insurance
industry. Our insurance industry with ObamaCare is no longer insurance; it’s publicly regulated
payment shifting and redistribution, and I don’t know what you want to call it. Even
before ObamaCare, our insurance industry was more or less a public utility, with guaranteed
rates of returns for insurers. Their lobbyists, the big companies, they win either way. Don’t
worry or celebrate insurers or pharma getting into the neck. They’re wining regardless of
what happens. But just because it’s essential to that particular scheme that Congress has
designed to have the individual mandate doesn’t make the individual mandate constitutional,
or necessary and proper, or any one of these things. You could have — this is where these
broccoli or asparagus examples come up, right, or the buying Chevy example that I gave. Let’s
say that — well, studies show that, scientific studies show, medical studies, that diet and
exercise have a much greater effect on both healthcare outcomes and on taxpayer spending
on healthcare than the ownership rate of insurance policies. So if anything, there’s greater
constitutional warrant to require people to buy, name your X healthy product, whether
it be broccoli, asparagus, some other vegetable or some other thing — or to join gyms. Now,
there’s a separate question about whether Congress can then actually physically take
that broccoli and shove it down your throat, or force you to work out on that elliptical,
chain you to it or something. That’s a slightly different question. But requiring to purchase
that, I don’t see a difference between, and as I said, there’s a greater warrant for that
than for buying the insurance. Scalia’s healthcare opinion, I thought Professor Leflar was going
to talk about his concurrence in the medicinal marijuana case, which turns on activity and
also turns on Scalia’s drug war exception of the Constitution. Based on what Scalia’s
done since, he is not a swing vote here. I think he’s firmly on the side of striking
this down. And moreover, in the Koran case, that particular individual euthanasia case
and whatnot, there’s no government coercion there. It’s a fundamental right case. It’s
analyzed completely differently. I guess I’ll clear up one other thing about necessary and
proper, because I got into a little bit too much legalese. When I was talking about those
early wheat cases, Wickard, the New Deal cases, why it’s important that they were all citing
Chief Justice Marshall’s McCulloch opinion rather than his Gibbons opinion is because
the former is about necessary and proper while the latter is about the Commerce Clause. So
if you look at how Chief Justice Marshall talks about for something to be necessary
and proper, you don’t evaluate whether something is more or less necessary. In that scion of
limited government, Alexander Hamilton agrees, there has to be a line of justiciability.
If you don’t evaluate, well, that’s necessary enough. That’s not what you do. You see whether
something comes within the letter and spirit of the Constitution, and precisely because
there is no authorization for Congress to mandate things under the guise of regulating
interstate commerce. McCulloch versus Maryland and all the necessary and proper cases going
back to our founding, militate against upholding the individual mandate. Again, I can’t emphasize
enough. This is not about healthcare. There’s lots of different markets that we can talk
about, the food market, the housing market; you need food and housing before you need
healthcare, that Congress can do. There’s lots of different things that Congress can
do in the national healthcare arena, but this goes beyond any existing power under modern
doctrine. And if this mandate is struck down, no other law, no other opinion — Wickard,
Raich, nothing, needs to be struck down with it, because this is so singularly beyond anything
that’s happened. This so singularly eviscerates what remaining limits on federal power there
are under modern constitutional law, that really, this is a turning point. And I think
people recognize this, the overwhelming unpopularity. I think the latest poll — just of the mandate,
not ObamaCare altogether, but just of the mandate, is seventy percent people against
it. That might help steal the spine of some judge or justice in the future. I can only
hope. [ Applause ] We’re going to go ahead and open it up for
questions for anyone that’s got a question for these guys. What you were talking about was very interesting,
but the fact that we’ve got a table out here that’s stacked heart attack high with pizza,
with white flour, bad fat, salt, processed meat, says more about this issue than I think
everything that you’ve said up here. Benjamin Franklin said, “An ounce of prevention is
worth a pound of cure,” and that “a stitch in time saves nine.” You add up the fact that
we can be healthy. Green tea is significant. Apples, blueberries — the simple things that
are available to us right here at Wal-Mart, everywhere, is significant. We don’t need
healthcare; we need to be healthy. Thank you. If anyone– And that’s why I listen to my doctor rather
than the government when I– You can get seconds when it’s over. So why doesn’t the state of Arkansas — I
was a resident of Massachusetts for eight years prior to moving here. Why doesn’t the
state of Arkansas just do what Massachusetts did on the state level instead of asking the
national government to mandate it, if you will? Well, it’s a reasonable question. The question
is, why doesn’t Arkansas, why don’t the different individual states do it on the state level
and fix their healthcare systems on the state level rather than leaving it to the federal
government to accomplish? And there are a couple of points that you got to make about
that, because it cuts to the heart, really, of Mr. Shapiro’s entire argument. This is
a federalism question, is this a matter for Congress to take care of, for Congress to
address as a national issue, or is it something that is properly and necessarily left to the
states? Good question. My answer to it would be that healthcare, the healthcare problems
that we have are irretrievably and inevitably national in scope, and that a single state
can’t fix the problems in and of itself, particularly states that have less resources, Arkansas
being among those. We are left in Arkansas, as I pointed out, with a terrible situation
of more than half a million people without basic health insurance. They cannot get it.
And that foists burdens on all the rest of us, the taxpayers and the people who are fortunate
enough to have it. And these are issues that single state-by-state solutions, although
they can serve as guideposts for other states — Massachusetts has done so; Utah, Hawaii
has done so — they won’t take care of the whole national problem. And so, I think that
part of what for example, the Commerce Clause is all about, is saying to Congress, if it’s
a national problem, then you may address it under interstate commerce, and you have the
means, and they’re generous means, through the necessary and proper clause, to accomplish
that in some kind of national light, in some kind of reasonable way. Now, as Mr. Shapiro
said, there are many possible approaches to addressing those problems. Congress has chosen
one among those approaches. As long as there’s a rational basis for proving that it’s democratic
choice of the people that we elected, then the courts should not strike it down. Well, this is why we’re against RomneyCare
and we don’t hesitate in tweaking our friends at the Heritage Foundation for inventing that,
and it’s probably why Mitt Romney’s going to have trouble in the Republican primaries
the longer that this stays a salient issue. But states — as Romney said, and continues
to say to try to kind of massage his points — states should have and do have flexibility
to resolve their own policy issues as they like. What’s more local — not even state,
but local, than somebody going into their doctor to have a check-up or somebody having
a heart attack. That’s very different than regulating an industry. Just like states are
the ones that criminalize murder and robbery and rape and these sorts of things; not the
federal government. Although the federal government has overfederalized a lot of different laws.
For example, the federal carjacking law. It wasn’t that carjacking was legal until Congress
passed a law against it. It was always illegal to use weapons to steal somebody’s car and
rough them — not like any state allowed that. But just like in the Morrison case in 2000,
which struck down the Violence Against Women Act, the theory there was that when women
are threatened or attacked, assaulted, that affects their productivity which affects interstate
commerce. And the Court said, well, no, that’s not too attenuated from economic activity.
So similarly here, this is properly under the purview of the states, and then you got
the issue of whether one of your individual rights is to refrain from having — that’s
a separate type of constitutional argument. But states, yeah, absolutely, should have
flexibility in this area as in many others that they enjoy about how to regulate different
aspects of policy. Just because they don’t doesn’t mean that Congress says, oh, well,
we see that these states are failing to do anything, and therefore we get that power.
It’s not the way the Constitution works. We’ve actually got the room for one minute,
so we’re going to have to wrap it up. But I encourage you all to read– Is somebody else coming into the room? We’ve got a class here in just about ten minutes.
But I encourage you all to read the recent Florida opinion, and let us know on our Facebook
page whether or not Professor Leflor’s interpretation of the Commerce Clause is true and correct.
I think that the Florida judge had his own theories on that, as did possibly the founders
of this great nation. So thank you, all. Thank you to the University of Arkansas School of
Law, and to our guests. [ Applause ]


  • k soger

    They are just passing the cost of health care coverage on the parents for an additional 8 years. Mind you I am grateful my daughter is on our coverage. She has more health issues at 25 than I do at 48. However, the expense is on us. This mandate does nothing to control costs. It may even increase costs since the policy will have to be written with an unlimited rider and the population is getting sicker and sicker.

  • macgeek2004

    Because one side, the Republicans, are paid to keep the status quo, and the other is paid to either fail to enact reform or to enact "reform" that at least locks in their profits. This reminds me of how Federal student loans were once "administered" by private banks.

    Hopefully enough people will get pissed off with it that it'll be amended…AFTER we wrestle our country back from the corporations who have stolen it from us.

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