Looking at National Federations of Independent Businesses, et al. v Seblius, Secretary of Health and Human Services, et al.

This began as an assignment in one of my politics classes and evolved into a general examination of the court briefing released last year. I know this is a bit late but if anyone has the interest, H highly suggest you read the document. 

http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf

Case

National Federations of Independent Businesses, et al. v Seblius, Secretary of Health and Human Services, et al. June 28^th, 2012.

Main Idea addressed is the “individual Mandate, which requires most Americans to maintain ‘minimum essential’ health insurance coverage”. Those who do not get subsidized insurance through the government must buy private insurance. The penalty of not having healthcare by 2014 must pay a “shared responsibility payment”. Also covered a Medicaid expansion to cover more states and people, paid for by the fed. Those state that did not meet the requirements were subject to lose additional funding as well as the entirety of their Medicaid funding.

Results

There is a lot of talk by Chief Justice Roberts on what the enumerated powers of the executive and legislative branch are. As quoted from Chief Justice Marshall, “the question respecting the extent of the powers actually granted” to the Federal Government “is perpetually arising, and will probably continue to arise, as long as our system shall exist.” It is interesting that such a broad argument has lasted so long, though it is clear from the general words in the constitution that these institutions were designed to be flexible with the times. The power of the federal government is detailed and limited in the constitution while the states aren’t and even expanded in the bill of rights. This leaves the states open to produce laws that the federal government cannot. (Marijuana laws?)

The constitution protects the state populations from fed interference in their affairs. It insures that the individual rules and policies will be more personalized due to proximity and size. Once this piece is said, it opens up what the government is able to do within the states: regulate interstate commerce and lay and collect taxes to promote the ‘general welfare of the US’. A piece of the law that, as Roberts puts it: “gives the Federal Government considerable influence even in areas where it cannot directly regulate”. This leads to a kind of disconnected power and a power of the purse when dealing with states and allocating funds to the states. The fed can attach incentives to both of these institutions thus coercing the states into action that the fed is not allowed to directly perform. It is a set up and a background to which the situation must be addressed. The court understands that although the federal government cannot impose too many demands on the states, they can offer large rewards or consequences that are well within the limitations of the constitution.

An important part of ruling the penalty as a tax is that it is both run by the IRS and paid through tax forms and channels. It also has the general feel of a tax as it is the amount of 2.5% of income by 2016 with a minimum amount added. Though it also has exceptions to the rules based on income or being a member of an Indian tribe. Lower courts ruled on the case that the plaintiffs could not sue the penalty until after it had been paid yet this was on the basis and in agreement with a tax-paying precedent, thus adding to the judgment that this was a tax and not a fee or fine. This resulted in the inclusion of the “shared responsibility payment” in the right and powers of congressional taxations laws.

On the federal government mandating that each individual person obtain some sort of health insurance, the defendants had a twofold argument. First, that the insurance agencies and resulting economic activity is very much within the sphere of interstate commerce under the powers of the US congress. Second, that even if the first argument is disregarded, that the persuasive techniques that impose a tax upon those who do not have the new insurance is part of the taxation system. Similarly, the tax benefits for having children, sending them to college, getting married and giving donations apply on the other end of the spectrum. It is using tax as an encouragement for the good of the country. If the citizen does not wish to be a part of the system, that is perfectly fine, however there is a new idea that this is one country and those in it are going to assist their fellow man in maintaining and sharing the cost of their brother’s wellbeing. Though a interesting analogy is brought up with the analysis of the rise in health care with multiple reasons. If people were healthier than there would be a lessening in the cost of premiums and by the stated government logic, it would be within congressional power to tax people for not buy vegetables. If the point is to decrees health care costs than lowering the amount of money spent by the companies would be just as affective as increasing the amount of money they work with i.e. increasing the number of people in their system.

But the court recognizes that it is not about the simple economic activity that causes costs to rise and fall. Roberts sees that “sickness and injury are unpredictable but unavoidable” and perhaps the more prudent solution is to have everyone be insured in the first place. Though this mandate is truly a set in the direction of universal coverage. A few big indicators are the name of the tax, ‘shared responsibility payment’ and the underlying element comparable to the way other countries use their healthcare system. Everyone pays into the system but at no point will everyone need to use the system so the pool of money continually gets replenished and stays at a proper level of use. The fed argues that the particular institution of healthcare is of special privy to the rules of ‘mandated economic activity’ because of its preventive nature. There is no pause when requiring car insurance, why should health insurance be different?

The back-up argument from the fed was what won the case for them. Classifying the penalty as a tax was a brilliant political maneuver. It was an interesting fact that they even included a back-up argument in the process. I am not sure if this is a common practice in the particular way that the fed worded it. That maneuvering ‘we have this argument and if that does not work then we have this one back here’. Although I agree that this is a good idea, I am surprised that Roberts sided with the liberal justices on this one, though he has been full of surprises on this circuit with the ruling on DOMA. I do think that this is an interesting and uniquely American first step to universal healthcare within the next 10 years. A hyper-capitalistic, interim solution to everyone beginning to be together in our trials and tribulations. It could also be a subtle motivator for people to start taking better care of themselves. Perhaps this could be a small push to an awareness that we are all in the same country and we are all in this race together. 

@FitzFile