Supreme Court addressing ObamaCare

I understand all that; the problems with Obamacare are many, because it has not addressed cost savings through efficiency and other procedures and processes.

No.8 March 2012

The Medicaid Mess: How Obamacare Makes It Worse

Avik Roy, Senior Fellow, Manhattan Institute

The Patient Protection and Affordable Care Act (PPACA) is designed to extend health-insurance coverage to tens of millions of uninsured Americans. Rarely is it mentioned, however, that Medicaid, the government-run health-insurance program for the poor, will provide more than half of that new coverage under the law. The PPACA assigns Medicaid this central role, despite long-standing concerns about Medicaid’s costs and the quality of its care.

Under the PPACA, individuals and families with incomes between 138 percent and 400 percent of the Federal Poverty Level (FPL) will be eligible for generous premium subsidies and cost-sharing credits, which they can use to offset the cost of purchasing private insurance on state or federal insurance exchanges created under the law. Uninsured individuals and families with incomes below that level, but who seek coverage on the exchanges, will be automatically enrolled in existing—but significantly expanded—insurance coverage programs for low-income Americans, namely, Medicaid and the Children’s Health Insurance Program (CHIP).

The Congressional Budget Office estimates that the PPACA will reduce the nation’s uninsured population by 30 million. Seventeen million Americans are expected to be added to the Medicaid rolls, at a ten-year cost of $795 billion.[1] This core feature of the PPACA is one of the law’s most significant flaws.

Medicaid has been plagued by concerns about its quality, access, and financing virtually since its inception. The federal government matches state Medicaid funding at a rate adjusted by state income. Policy experts have long recognized that the program’s dual state-federal structure creates perverse incentives for states to rapidly expand Medicaid coverage and services, while shortchanging efforts to control waste, fraud, and abuse.[2]

Today, Medicaid poses a severe fiscal threat to many state budgets. Due to federal restrictions on Medicaid program management, state tools for managing Medicaid budgets are largely limited to adjusting payment rates for providers. Over time, this has resulted in severe underpayment of doctors and hospitals, preventing many Medicaid recipients from gaining access to basic and specialist health care. This access problem, in turn, leads to significantly worse health outcomes and higher mortality rates for Medicaid recipients when compared with private insurance and even Medicare.

This brief describes the inadequate health outcomes of Medicaid patients and how those outcomes are tied to the program’s penurious payments to health-care providers. It calls into question the wisdom of expanding this flawed program before enacting sustainable reforms that improve access and quality while responsibly controlling costs for state and federal taxpayers.

Feds charge 107 people in $452 mln Medicare fraud

SAN FRANCISCO (MarketWatch) -- Federal officials have charged 107 individuals with defrauding Medicare for $452 million in false billing, the Department of Justice said Wednesday. In Miami alone, 59 individuals were charged with making $137 million in false billings, according to the Justice Dept.

Personal Information

 Name:  
 Address:  

Enforcement of Directive
Patient Advocate:  Lucy
 Second Choice: Mike

Life Sustaining Treatment

 Terminal condition:  I DO NOT want life sustaining treatment.
 Permanently Unconscious:  I DO NOT want life sustaining treatment.
 Tube Feeding: I  DO NOT want to receive artificially provided food or water.
Pain and Euthanasia

 Pain:  If in a terminal condition or permanently unconscious and in pain, I DO NOT  want to receive pain medication that could permanently harm or hasten the time to death.

 Euthanasia:  If legal, would want to utilize it.

Organ Donation: Donate organs for both transplant and research.

The overall goal that Congress had in mind in passing the ACA was to lead the nation toward nearly universal health care, and the methods chosen were designed in the main to achieve a reduction of the total number of Americans who do not have health insurance. Congress estimated that 50 million Americans are uninsured. In the Medicaid expansion, Congress estimated that it would assure coverage for 9 million of those 50 million by the year 2014, 16 million by 2016, and 17 million by 2021. States have argued that the numbers may actually grow larger that those estimates, because many individuals who previously had been eligible for Medicaid benefits did not choose to seek them, but will now do so under the ACA’s mandate that all Americans must have health insurance by 2014, or pay a financial penalty.

Beginning in 2014, the ACA will require each state taking part in Medicaid (all 50 do now) to provide in their plans for health care services for adults under age 65, if their income is no higher than 133 percent of the federal poverty level. Previously, the states did not have to observe a baseline income level for eligibility, and many states chose not to provide Medicaid to adults who had no children, while providing coverage for adults who do have children at lower income levels.

In addition, a state plan must provide Medicaid to all children whose families’ earnings are no higher than 133 percent of the federal poverty level, even if the children are already covered by another federal health care program (CHIP, or Children’s Health Insurance Program). Before this change, states were required to provide Medicaid to children under age 6 if the family income was no higher than 133 percent of the poverty level, and children ages 6 through 18 if the family income was no higher than 100 percent of the poverty level.

Further, states may not alter existing Medicaid eligibility levels for adults and children in effect as of March 23, 2010, until a state has put into operation a new “health exchange” — a kind of marketplace in which families can shop for health insurance at affordable rates. Previously, states had the option of lowering or raising eligibility levels. If the state previously had allowed eligibility to expand, as a voluntary matter, that eligibility is now to be locked in.

Another provision gives new coverage to children who are 25 years old or younger and who had been receiving Medicaid but would have lost it under age limits on foster care. They will become newly eligible to go on receiving Medicaid, come 2014.

Finally, family doctors (“primary care” doctors) are to get an increase in Medicaid reimbursements.

The federal government must pay 100 percent of the added cost of these expanded coverage provisions for the years 2014, 2015, and 2016. After 2016, the federal share will drop to 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and to 90 percent in 2020, leaving it at 90 percent thereafter, with the states thus obliged by then to pick up 10 percent of the added cost. The federal share will not drop at any point below 90 percent (compared to a range at present between 50 and 83 percent). The states also will have to pick up the tab for any administrative expenses they incur in carrying out the expanded eligibility.

The new law, reinforced by existing Medicaid law, seeks to induce the states to accept the new conditions. For years, Medicaid law has had a provision threatening a cutoff of all federal payments to a state that fails to meet the new requirements, and the fund cutoff would last until the federal government became satisfied that a state would start complying in full. Federal law, however, does give the U.S. Department of Health & Human Services some discretion about whether it will actually impose a total cutoff of funding to a state whose plan falls short.

The Health-Care Mandate Is Clearly a Tax—and Therefore Constitutional
(By Jack M. Balkin, The Atlantic, May 4, 2012)

Throughout the constitutional debate over the Affordable Care Act, most observers have assumed that the key question would be whether the individual mandate is a proper exercise of Congress's powers to regulate interstate commerce. But there has always been a second argument, largely neglected -- Congress has the power to pass the individual mandate as a tax. And that argument offers an easy way to uphold the Affordable Care Act without delving into the metaphysics of broccoli.

In fact, the individual mandate is a tax. The mandate is an amendment to the Internal Revenue Code, and it is calculated based on a percentage of adjusted gross income or a fixed amount, whichever is larger. Starting in 2014, it will be collected on your form 1040 just like your other taxes.

Opponents of the ACA have tried to argue that Congress's declaration of responsibility to purchase health insurance is somehow separate from the tax that enforces it. But "the idea that the mandate is something separate," Chief Justice John Roberts remarked on the first day of oral arguments, "from whether you want to call it a penalty or tax just doesn't seem to make much sense. . . . what happens if you don't file the mandate [on your tax return]? And the answer is nothing."

From the very beginning of the litigation over the ACA, the Justice Department has made the tax power argument. It is the argument favored by many legal academics, including yours truly. (I joined an amicus brief devoted solely to the tax issues). But it has gotten no love from the federal courts. Only one judge on the Fourth Circuit Court of Appeals spoke in favor of the argument, and even that court actually dismissed the case on a different ground based on the Tax Anti-Injunction Act (about which more later).

And yet the tax argument is remarkably simple. Start with the Constitution's text. Congress's enumerated powers in Article I, section 8 begin with the General Welfare Clause, which gives the federal government the power "[t]o lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States."

Note that Congress doesn't have to call something a tax for it to fall within this power. The Constitution itself uses no less than five different words for taxes: taxes, duties, imposts, excises, and -- in Article I, section 7 -- "revenue."

Revenue, it turns out, is the key idea. To fall within the tax power, a law must raise revenue. And the mandate certainly does. The Congressional Budget Office estimated that the mandate will have raised $17 billion by 2019, and that starting in 2017 it will raise approximately $4 billion a year. In fact, it doesn't take very much revenue to make a tax constitutional. In 1937 the Supreme Court upheld a tax designed to regulate firearms dealers that raised $5,400 in 1934, only about $88,000 in today's dollars. That's a lot less than 4 billion a year.

At oral argument Justice Ruth Bader Ginsburg worried that eventually the mandate wouldn't raise any revenue if everybody bought health insurance. But the mandate isn't actually designed to achieve 100 percent compliance. The amount of the tax is set at roughly the average annual premium for health insurance in the United States, meaning that a fair number of people will decide it is cheaper just to pay the tax.

It also doesn't matter that the real purpose of the tax is to regulate behavior. Lots of taxes are designed to do just that -- think about taxes on polluters as an example -- and federal taxes on drugs are designed to keep people from buying or selling them. In 1950, the Court upheld a tax on marijuana, explaining that "a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. The principle applies even though the revenue obtained is obviously negligible . . . or the revenue purpose of the tax may be secondary." "Nor does a tax statute necessarily fall," the Court added, "because it touches on activities which Congress might not otherwise regulate" under its other enumerated powers. So even if the mandate is beyond the commerce power, it can still be a constitutional exercise of the power to tax and spend for the general welfare.

The second big idea in the Constitution's text is that a tax must "provide for the common defence and general welfare" of the nation. The doctrinal question is whether Congress could reasonably conclude that the tax promotes the general welfare. The answer to that question is easy. Better health coverage for more Americans promotes the general welfare. Congress wanted to prevent insurers from denying coverage to people with preexisting conditions and from imposing lifetime caps on coverage. Congress decided that the best way to fund these new requirements was to increase the national risk pool by bringing in new participants. And those who don't buy insurance but pay the tax instead will help pay for new federal health insurance subsidies in the Act.

There are two other limits to the taxing power. First, a tax can't violate individual rights. In 1994 the Court struck down a Montana tax that was a thinly veiled attempt to get around the Fifth Amendment's Double Jeopardy Clause. Second, a valid tax cannot be a criminal penalty in disguise. In 1922 the Court struck down a tax that assessed 10 percent of a year's profits on any company that employed a single underage worker for a single day. The Court held that this was a criminal penalty in disguise because it was completely disproportionate. That can't be said of the mandate. The tax is pegged to the average annual insurance premium. And Congress also made sure that the mandate can't be enforced by criminal penalties or tax liens. In fact, the only way the IRS can enforce the mandate is by reducing a taxpayer's refund.

At oral argument, Paul Clement suggested that the tax might be unconstitutional under Article 1 Section 9, which states that "direct" taxes must be apportioned to state population. If a tax is a "direct tax," the total amount of revenue collected each year from each state must be proportional to each state's population. Few taxes can meet this standard, but most federal taxes are not direct. Direct taxes are limited to taxes on the ownership of real or personal property, or "head" taxes, which are taxes that are assessed on people no matter what they do. The mandate is not a tax on ownership of property. And it is not a head tax, because it is very easy to get out of paying it. All you have to do is buy health insurance or take a job in which your employer provides health benefits.

In sum, the constitutional argument for the mandate as a tax is pretty straightforward: The mandate raises revenue, it serves the general welfare, it does not violate fundamental rights, it is not a direct tax, and it is not a criminal penalty in disguise. In some ways the argument is much simpler than the commerce clause analysis. Many legal academics -- including my Yale colleagues Akhil Amar and Bruce Ackerman -- think that it is the easiest way to resolve the case. And if the Court used the tax power theory, it would not have to decide whether Congress's commerce power extends to mandates -- for cars, for broccoli, or for anything else. Even mandate opponents like Georgetown University Law Professor Randy Barnett have long conceded that whether or not Congress can make you engage in commerce, it can surely make you pay your taxes.