ObamaCare vs Fundamental Liberty

Upon reading the 2,400 pages or so of the healthcare reform bill, a few things stuck out as significant. The bill barely, if at all, addresses healthcare. It addresses health insurance and multiple levels of what could be considered a “regulatory takeover.” There’s a government takeover of the college loan industry. The Feds will now determine who gets a loan (i.e. who goes to school) and how that loan will be paid back. “Underserved” communities I believe was the term used. However, no other feature of the bill is more concerning than the blatant contempt for the US Constitution. The legal challenges to ObamaCare will have widespread historical precedence for many generations to come. The very fundamentals of our Liberty will be questioned.

The “individual mandate” is the key issue. Essentially, this requires every US Citizen to buy government-approved health insurance. Failure to comply is punishable with an annual tax penalty of $750. This penalty will rise to 2% of income by 2016 (or which ever is greater). Thirteen states attorneys argue this is an unprecedented exercise of state power by the federal government. Congress has never made law requiring citizens to buy a private product in order to be considered a law-abiding citizen. The only law of equal power is conscription, where the Constitution gives Congress the explicit power to raise an army.

The argument has been made that Commerce Clause of the Constitution allows Congress to exercise such power. But recent Supreme Court cases would suggest otherwise. In Gonzales vs. Raich, (2005) the question of Congress’s ability to regulate economic activities across state lines was challenged. The court stated that the Commerce Clause can not justify any federal regulation Congress chooses. In US vs. Loez (1995) and Morrison (2000) the High Court turned over lower courts on similar grounds.

If Congress can constitutionally force a person to buy a product, what is left of the government’s limited and enumerated powers under Article I? The Bill of Rights will be the sole restraint on federal power. However, The Bill of Rights were designed by the Founders to affirm the rights inherent in the Constitution as a whole. They were never designed as a true restraint on government. Logically then, with this insurance mandate, what’s to say Congress can’t require citizens to purchase GM or Ford products; mandate smokers enroll in cessation programs; or require obese citizens attend Weight Watchers?

The State of Massachusetts has become a “fish bowl” on single payer plans this past year. Similar mandates in Massachusetts did not pose a constitutional problem for the state. Like most state governments, Massachusetts holds police powers and wider plenary authority under the state constitution than at the federal level. The Posse Comitatus Act and Insurection Act both make it illegal for the Federal Government to do the same. In Florida, the constitution spells out the ability to oppose Congresses healthcare mandates. The ObamaCare bill requires the states to spend-billions of dollars to rearrange their health-care markets and expands Medicaid enrollment, regardless of the state’s ability to pay. There are attempts by some states to block the regulations by passing laws which exempt their citizen’s form the mandates. However, federal laws that are constitutional usurp state’s laws under the 10th Amendment. Additionally under the 10th, states can’t nullify a Congressional action. Therefore, only a ruling that the mandate is not constitutional will provide financial relief to the states, and Liberty to their citizens.

The truth is ObamaCare is bad law and a threat to our Liberty. Not only has it proven unconstitutional in word, it also was unconstitutional in birth. Both the House and Senate were derelict in duty by not holding judiciary committee hearings on the constitutionality of the law. The Justice Department did not provide an opinion. Our judges and representatives have a responsibility to ensure our Liberty is protected. The courts are not for advisory opinions. They are for rule on the specific objective arguments of the case. Let’s pray they do their job.

Publius

Healthcare Delivery

February 7, 2010



For roughly the past 15 years, one of the responsibilities I have had in my job has been working with insurance brokers on negotiating healthcare plans. Naturally I’ve stayed in touch with the ObamaCare development. It’s not too hard to get caught up in the drama. Mostly I’ve found folks repeating the latest slogans and talking points from political propaganda: “death panels”; “socialized medicine”; “higher taxes”, etc. To be sure, some of that may well be true. But such a debate misses the fundamentals of the issue.

Recently, my physician and I discussed a procedure that we both agreed was time for me to do. We discussed various options, reasons, risks, etc. One key question I had was “where?” Should I go with the one local specialist? Should I travel an hour to a larger teaching hospital loaded with some of the top specialists in New England. Being a business person, I weighed the costs and benefits. I wonder how many people have such a discussion with their physician. Were similar discussions going on with ObamaCare?

The first group to jump on the ObamaCare bandwagon was the insurance industry. They came because they understand the true fundamental to healthcare costs...the delivery system. When you break the healthcare world down, it’s really a patchwork of cottage industries made up of small provider practices in non-competitive markets. Insurance companies and hospitals on average achieve about 2-3% margins. Yet, of every premium dollar, 85 cents goes to the cost of care, providers, suppliers, medical centers, prescriptions, etc. The 2% margin for 2009 of the entire healthcare insurance industry would cover the costs for two days of the nation’s healthcare expenses. When ObamaCare reached the beginning of its end with Scott Brown’s victory in Massachusetts, President Obama responded predictably by castigating the insurance industry by saying…”I mean, to be fair, the status quo is working for the insurance industry, but it’s not working for the American people.” Not a statement that is helpful to building a relationship with your first ally.

To be honest, its health insurance reform, not healthcare reform. ObamaCare focuses not on healthcare delivery, but standardizing benefits and eliminating the relationship between the amount an insurer is allowed to charge and the true cost of the care. Insurers would be required to offer “guaranteed issue” (accept everyone on the plan) with limited ability to adjust premiums based on actual business / utilization costs. So if actual care of a patient is where 85% of the cost sits, how will ObamaCare impact the overall cost of healthcare?

A number of congressmen (Republicans and Democrats) asked the same question. WellPoint, one of the largest healthcare insurance companies, provided a model based on its’ own actuarial data. They found ObamaCare would nearly triple premiums for most of their customers. The response from the Obama Administration? WellPoint is no better than those evil tobacco companies.

The U.S. healthcare system offers choice and the most advanced treatments and technology in the world. Yet, its’ business practices are outdated. Nearly every sector of the U.S. economy has evolved their managerial and delivery practices resulting in some of the highest productivity and quality available. To be competitive, consumer products, service industries, banking, etc. have to be mindful of costs. The healthcare industry is not structured so that providers have incentives to control costs. And no incentives for insurers, (medicare one of them), to reimburse costs realistically. There is a lack of competition where needed. And a lack of strategic provider-insurer partnerships as well. In this regard, the Obama Administration is missing an opportunity by not seeing that insurers add value if they are part of that delivery system. By having information from my insurer about the cost and quality of that procedure my physician and I agreed on, I was actually making an informed decision within the market.

Healthcare costs are negotiated between providers and health plans. But in a true market costs are driven by competition. But the cost-control provisions of ObamaCare exempt the doctors and hospital, (the 85 cents of every healthcare dollar), from being involved in managing cost. It appears Pennsylvania Avenue is having a hard time hearing this message.

Publius