[Guest post by Aaron Worthing; if you have tips, please send them here.]
Update: Legal Insurrection comes through with the opinion. You have to use that annoying scribd thing, but beggars can’t be choosers. No analysis yet, but you can read for yourself.
Update (III): Some analysis. See below. Update (IV): Now full analysis.
Literally just got a breaking news email from CNN: “Federal judge rules unconstitutional parts of Obama health care law. Justice Department expected to appeal.” This is almost certainly the Richmond Virginia case, and not the Liberty University case from a week or so ago.
But this is extremely prelimary and we should take it with a grain of salt. There was a significant issue as to whether any of the health care law could be severed from the main, and that is the kind of issue that reporters miss. I mean not just out of bias, but they innocently miss this kind of issue. Come back for updates when I get my meaty paws on the opinion, or at least more thorough reporting.
And of course this is the first victory after two district court defeats, so let’s not get too excited. It does increase the chances of a Supreme Court appeal, although I suspect it was already virtually certain to end up there anyway.
Update: Let me thank all the people who emailed me about this. I saw on my own, but I still appreciate it.
Update (III): I will go silent on the issue until I finish my lunch and finish reading all of it, but it looks like the mandate and anything referencing the mandate are severed out of the law. I have literally no idea how much that is. The relevant ‘graphs:
Finally, in evaluating severability, the Court must determine whether in the absence of the severed unconstitutional provision, Congress would have enacted the statute…. [This] element of the analysis is difficult to apply in this case given the haste with which the final version of the 2,700 page bill was rushed to the floor for a Christmas Eve vote. It would be virtually impossible within the present record to determine whether Congress would have passed this bill, encompassing a wide variety of topics related and unrelated to heath care, without Section 1501. Even then, the Court’s conclusions would be speculative at best. Moreover, without the benefit of extensive expert testimony and significant supplementation of the record, this Court cannot determine what, if any, portion of the bill would not be able to survive independently.
Therefore, this Court will hew closely to the time-honored rule to sever with circumspection, severing any “problematic portions while leaving the remainder intact.”… Accordingly, the Court will sever only Section 1501 and directly-dependent provisions which make specific reference to Section 1501.
Which I suspect means that many provisions that were financially dependant on the mandate will remain in place. So if this ruling stands, then the law will have to amended or repealed to avoid significant stress on the health insurance industry. As in, if they don’t do something, the industry might go bankrupt. I have said before that I don’t believe that this is the right approach to severability.
The concern, however, is that with a divided Congress and a President devoted to this law, will they be able to do anything to stop this in time?
And if nothing happens and the health insurance industry is bankrupted, would that be in the left’s eyes a bug, or a feature?
Update (IV): I read the opinion, and there is little that is surprising here. There is the familiar debate about whether the penalty is a tax or not, and the analysis is very similar to Judge Vinson’s analysis in the Florida case, which I discussed here. And then there is the usual question of whether inactivity can be characterized as economic activity. This time the court said, no, but the analysis was a little bit interesting. The court seemed to concede that under some strained definition of the terms, a refusal to buy health insurance was “economic activity,” but then brushed it aside with one word: “traditional.” In other words, sure you could come up with some slick argument that this is really activity, but traditionally this is not how the term has been understood. I think given the hash the Supreme Court has made out of the commerce clause, this is about as much as we could hope for a court doing without actually overturning Wickard v. Filburn (which held that growing crops for personal consumption was interstate commerce).
Also, I have long said (but I don’t think here at Patterico’s) that the courts are also concerned that Congress should not be allowed to do anything it wants under the commerce clause. There has to be a logical limit to their power. And that concern is echoed in the opinion in this line: “This broad definition of the economic activity subject to congressional regulation lacks logical limitation and is unsupported by Commerce Clause jurisprudence.”
But bluntly I am really not sure this decision is good news if it is upheld exactly as is. I have long said that without the mandate, health insurance companies will go bankrupt. For instance, consider the rule with pre-existing conditions. Health insurance, like all other forms of insurance, depends on cultivating a large number of policy holders whose costs are less than their payments. Yes, your insurance company might cover a few doctor’s visits and a few pills, but the real purpose in health insurance is to guard you against a serious illness that costs you far more than your premium. So its almost like as if me and 99 of my closest friends said this, “we know that in the next year one of us will get really seriously ill, and will not be able to afford to pay the bills. And if that happens, the rest of us will pay your bill.”
It’s the same concept as with fire insurance. Most of us will never have a fire in their house. But we buy fire insurance because we know it could happen to us, and if it does, we have this agreement that provides for compensation in that event.
But rules like telling insurance companies that they cannot exclude people for pre-existing conditions makes hash out of the entire concept. Why would any person rationally choose to pay a monthly fee for insurance if they can just pay nothing, and wait until they get sick and then buy health insurance? Its like asking to buy fire insurance after your house burned down and demanding that they cover the fire you just had. It makes no economic sense.
The mandate was vital to making sure that these kinds of provisions didn’t bankrupt the insurance companies. I mean, that is not just my opinion. That is what Sebelius argued to the court:
The core of the Secretary’s primary argument under the Commerce Clause is that the Minimum Essential Coverage Provision is a necessary measure to ensure the success of its larger reforms of the interstate health insurance market.s The Secretary emphasizes that the ACA is a vital step in transforming a currently dysfunctional interstate health insurance market. In the Secretary’s view, the key elements of health care reform are coverage of those with preexisting conditions and prevention of discriminatory premiums on the basis of medical history. These features, the Secretary maintains, will have a material effect on the health insurance underwriting process, and inevitably, the cost of insurance coverage. Therefore, without full market participation, the financial foundation supporting the health care system will fail, in effect causing the entire health care regime to “implode.” Unless everyone is required by law to purchase health insurance, or pay a penalty, the revenue base will be insufficient to underwrite the costs of insuring individuals presently considered as high risk or uninsurable.
So what happens if the mandate is gone? Well, then Congress must either repeal the law or come up with another way to balance the books, and Obama must go along. And what if they can’t get this done? Things are not exactly going well on the taxation front, are they? So what if they don’t pass it.
Oh, and what if the entire health insurance industry implodes? Will the Democrats hope to argue that this proves that we need a public option?
And could that have been the idea all along?
My tendency is to avoid the most paranoid answer to these kinds of questions. I have argued before that their conduct seems much more like inattention. I mean you do not pass the “_____ Act of _______” because you doing a careful job of doing things. So, I am more likely to think the Democrats were like Phil Hare and they didn’t care about the constitutionality of this law, and if they gave it any thought at all, they actually convinced themselves they could do it. But you have to wonder if they were really that clueless. Or were they, as Dustin once dubbed Elena Kagan, “stupid like a fox.”
And even if they didn’t intend for this situation to occur, will enough liberals in Congress seek to take advantage of it to destroy the health insurance industry?
Mind you, this impending doom is used by the Obama administration to argue that it is within their power. I, on the other hand, believe that we should presume that Congress does not intent to intentionally bankrupt an industry and therefore I believe it justifies striking down most, if not all, of Obamacare. But the court didn’t agree with either perspective, and picked a middle course that is in some ways actually worse than the two extremes.
I would further add that I have previously pointed out that this law also violates the right to boycott under the first amendment, another good reason to strike it down and for my money the real reason why Obamacare is doomed is because it would undermine Lawrence v. Texas.
So, in short, today I am not entirely happy. What we need is either for Congress or the Courts to knock down most if not all of this ugly thing and not just one part.
[Posted and authored by Aaron Worthing.]