Friday, June 29, 2012

The Health Care Decision

I think one can learn a lot by reading the decisions of Supreme Court cases. The Supreme Court is the most meritocratic branch of government, so reading the opinions of the Justices is like reading the best papers in the field of law on a particular, policy-relevant topic. The Affordable Care Act (ACA) case is certainly one of the most important in at least a decade, and the Court doesn't disappoint, issuing three opinions that outline three separate approaches to the Supreme Court and the role of the Court. The pdfs can be found here. If you read anything at all, be sure to read Chief Justice Roberts's explanation of his judicial philosophy, pages 7-12 in the pdf. It's the opinion of the Court that won, and among the three decisions, the most detailed judicial philosophy. (For the rest of the post, page numbers will refer to the pages of the opinions, not the page in the pdf).

The opinions can be divided into three separate categories, and I will outline those categories and what I feel the differences in judicial philosophy are. In future posts, I will talk more about differences in decisions and the specific economic implications of the ACA itself. This is an important point: just because a law is Constitutional or legal does not make it good policy. Roberts makes this point numerous times throughout his opinion. For instance:
We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions (Roberts, p. 2).
Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices (Ibid. 6).
A word of warning: My opinions are based on one reading of the opinions, and I may have missed some of the legal details in my reading (they are 200 pages long!) and the "score-keeping."


To me, the three philosophies break down as follows:
  • Scalia, Kennedy, Thomas, and Alito: The Constitution gives the federal government limited, well-defined, enumerated Powers.
  • Roberts:  The Constitution gives the federal government limited, enumerated Powers, but the Court has interpreted these powers broadly because of a "general reticence to invalidate the acts of the Nation's elected leaders" (Roberts, p. 6).
  • Ginsburg, Sotomayor, Breyer, and Kagan: The Constitution grants essentially unlimited powers to Congress as long as Congress is attempting to do good things and solve good problems. [Although, I am not confident about lumping Breyer and Kagan here; maybe they're actually somewhere between this extreme view and Roberts's?]
Legal Theory Blog has a very good post on this last philosophy (or gestalt, as they call it). The analogy is that since the New Deal, Congressional power has been viewed as a vast ocean, almost unlimited, except that is dotted by few little islands of State Sovereignty exceptions that the court has recently carved out. This is opposed to the interpretation that the New Deal cases are the high water mark for expansion of Congressional power.

My Executive Summary:
Part I: The Indiviadual Mandate
Court's ruling: The individual mandate provision is not a tax under the Anti-Injunction Act, so the Court does not have to wait until 2014 (when the first penalties would be paid) to rule on the case (9-0). The individual mandate is not constitutional under the commerce clause, it is not necessary and proper (5-4: Roberts, Scalia, Kennedy, Thomas, and Alito), but it is a valid exercise of the taxing power of Congress (5-4: Roberts, Ginsburg, Sotomayor, Breyer, and Kagan). Because there is a reasonable construction under which the mandate is Constitutional, the mandate stands (1-4-4: Roberts).
Part II: Medicaid Expansion
Court's ruling: The expansion is unconstitutional because it threatens existing Medicaid funding. This threat crosses the line into coercion. It does not offer the States a true choice and amounts to the federal government trying to (via the States) use regulatory authority it doesn't have (7-2: Roberts, Breyer, Kagan, Scalia, Kennedy, Thomas, and Alito). The solution is to treat the expansion as a new program which, if rejected, does not threaten existing Medicaid funds (5-4: Roberts, Ginsburg, Sotomayor, Breyer, and Kagan; Scalia, Kennedy, Thomas, and Alito voted to invalidate the whole law).

 All the Justices began at the same point in agreement: The ACA calls for a mandate with penalty for purposes of the Anti-Injunction Act (AIA). There were three big divisions in thinking after this.

1) Can Congress command an individual to purchase something under either the Commerce Clause or necessary and proper?
2) Is the individual mandate a penalty or a tax when looked at for its constitutionality?
3) Can an incentive become too strong as to eliminate actual choice and be unconstitutional coercion?

I defer questions 1 and 3 for now, and want to talk a little about question 2, because I think it gives some insight into why the decision came out the way it did. But keep in mind, the court was 5-4 against the mandate after considering point 1.

Roberts argues: since the AIA is a work of Congress, Congress gets to decide whether it applies by choosing to use or avoid the word "tax," but the Constitution is not Congress's making, so a change of label should not affect the analysis of what the law FUNCTIONALLY does. The liberal justices concurred. The conservative dissent notes this distinction has never been made before (it's a tax or a penalty; these are mutually exclusive). Further, they support their opinion by saying: "The issue is not whether Congress has the power to frame the minimum-coverage provision as a tax, but whether it did so. . . . [W]e cannot rewrite the statute to be what it is not. . . . Congress enacted: a mandate that individuals maintain minimum essential converge, enforced by a penalty" (Scalia, Kennedy, Thomas, and Alito, p. 17-18). "What counts is what the statute says" (Ibid. 22). They further note that the provision is not where taxes should be, Title IX, but in Title I, the operative core (Ibid. 24). "We have no doubt that Congress knew precisely what it was doing when it rejected an earlier version of this legislation that imposed a tax instead of a requirement-with-penalty" (Ibid. 25).

This seems to be the type of thing that would matter to lawyers, and the argument that Congress knew what it was doing is persuasive given the environment surrounding the bill's passage. I am wondering, if this was a regular piece of legislation that really didn't matter much politically, would the justices have agreed to send the bill back to Congress to have them make that change in wording and pass it again (thus, keeping the bill in line with all of Court precedent)? Then this new bill might be constitutional by at least 5-4 and possibly even 9-0 since the conservative Justices seem to allow for other schemes that were considered during the debate of the bill (e.g. Ibid. 10, 17). But this is no ordinary bill, and circumstances are unusual, and a even a simple rewriting would not pass. I think this is the singular reason that Roberts ruled for the functionality line of thinking, even if that decision is seen to be "writing law" to some: to avoid the whole bill going down on a technicality (wording and placement in text) and having the the whole of the judicial decision viewed as illegitimate when the Court was ready to answer the key constitutional questions that are on everyone's mind.

No matter what the supporters of the law think, based on the text cited in the opinions, the current bill is too weak for the Individual Mandate to be a true mandate no matter what it's called (e.g. there's no criminality, the penalties for not buying are smaller than the cost of buying), and the Individual Mandate may actually have perverse economic effects (I'll speak more about this in future posts). For this reason, I agree with this analysis of Roberts's decision.  This way, the Roberts decision cleverly outlaws actual mandates while letting this law go. (But again, this it not to say mandates or the ACA are good or bad policy, economically)

One other thing I found interesting is that Ginsburg rails against the "retrogressive" nature of the commerce clause ruling (Ginsburg, p.2), usually with arguments along the lines of citing a large number of tangentially related New Deal cases while pointing out Roberts and the conservatives cite only n cases, where n is small.  But she herself supported the interpretation of the individual mandate as a penalty under AIA but as a taxing power under the Constitution -- a position that has NO precedent. I would have liked Ginsburg to explicitly lay out her judicial philosophy (and I've already outlined what I suspect it to be above), but since she doesn't and seems to be internally inconsistent in her arguments against the court's majority decision in some aspects, I noticed the conservative Justices outlined it for her:
The dissent’s exposition of the wonderful things the Federal Government has achieved through exercise of its assigned powers . . . is quite beside the point. . . . The dissent treats the Constitution as though it is an enumeration of those problems that the Federal Government can address. . . . The Constitution is not that. It enumerates not federally soluble problems, but federally available powers (Scalia, Kennedy, Thomas, and Alito, p. 15)

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