Constitutional Law

Obama Administration Lawyer: Health Insurance Is Neither Shoes Nor Broccoli. Good to Know!

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According to an Obama administration lawyer, you don't have to worry about the precedent set by ObamaCare's individual mandate to purchase health insurance. The government isn't going to make you buy vegetables or new cars. After all, with the mandate, the government isn't really forcing you to buy a "product," because insurance is just a way of financing health care. 

Nope.

From Bloomberg's report on the hearing regarding the health care law the took place in Florida earlier today:

[U.S. District Judge Roger] Vinson asked [lawyer for the states David] Rivkin whether the government's theory would allow regulation of any behavior with an economic impact.

"They can decide how much broccoli everyone should eat each week?" Vinson asked.
"Certainly," replied Rivkin, an attorney in the Cleveland-based law firm Baker Hostetler LLP.

"We've always exercised the freedom whether we want to buy or not buy a product," Vinson told the Obama administration's lawyer.

[Obama lawyer Ian] Gershengorn said health insurance is "a financing mechanism," not a product. "It's not shoes," he said. "It's not cars. It's not broccoli."

I am glad to see that the government's fine lawyers can make these sometimes difficult distinctions. But the issue here is not whether insurance is a financing mechanism or a physical good like shoes or vegetables. The issue is whether under the Constitution the federal government can compel an individual to participate in a private market transaction—purchasing health insurance from a private company—in which the individual had not otherwise chosen to participate.

Still nope.

Moreover, if it's really just a revenue-raising mechanism, a way for the government to pay for health care, then aren't they saying that the insurance premiums paid to health insurance companies actually taxes? This is different from the administration's argument that the penalty for not complying with the mandate is a tax. Instead, they're effectively describing the premiums themselves as taxes—financing mechanisms that the government uses to pay for care.  

Not really getting it, are we?

But if that's the case, shouldn't the CBO have scored the total cost of these premiums—the cost involved for everyone to purchase insurance? That wouldn't be unprecedented. One of the things that  helped kill HillaryCare in 1994 was a decision by the Congressional Budget Office to score the cost of requiring private-sector employers and individuals to purchase insurance. Each and every one of those mandatory premiums was added to the cost, revealing just how expensive the scheme was. 

But thanks to updated scoring guidelines, CBO didn't score the cost of insurance purchases this time around. And, as Cato health policy analyst Michael Cannon explained last year, that helped hide more than a trillion dollars of the true total cost. But take heart: At least the federal government is not forcing anyone to eat broccoli. Yet. 

NEXT: "It would be a giant leap for the Supreme Court to say that a decision to buy or not to buy is tantamount to activity"

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  1. [Obama lawyer Ian] Gershengorn said health insurance is “a financing mechanism,” not a product.

    IOW, a tax.

    1. I would say it is a service, which is a type of product.

    2. Depends on whether he means it’s a financing mechanism for the government, or for the health consumer.

  2. I cannot wait for Obamacare to be struck down. Because then, all that political capital that the Dems and Obama spent on it were for naught, Obama is fucked in the next election, and his “legacy” will be that of a total failure.

    Enjoy, Mr. Hope and Change. HA HA HA HA

    1. Here too, and I can even deal with it making him figuratively correct with all the blather about turning tides, etc. The high water mark of statism, and the beginning of the dismantling of the progressive agenda.

      Hey, one can dream, eh?

    2. He’ll have one thing: When the private space industry takes off, he’ll be given probably too much credit for telling NASA to fuck off and get the private sector to do it. Because you know he didn’t do it because he believes in the free market.

      1. But shouldn’t he get credit for all the things he didn’t do? After all, inactivity is the same as activity.

        1. And that’s why George W. Bush wasn’t a bad president after all. Look at all the countries he could have invaded but didn’t.

          1. And this Congress has actually been very fiscally restrained. Just think of all the spending bills they could have passed but chose not to!

            1. ^^^^ All of this.

              I award you a prime number of Internets: 17. The three of you may distribute them as you see fit.

        2. This is 21st century theory of government.

          Not raising taxes=Tax cuts.
          Not writing new regulations=Deregulation.
          Giving tax money to donors and cronies=Investment/saving and creating jobs.
          Inactivity=Activity under the Commerce Clause.

          Our public servants (Masters) are just busy tilling your brain so its nice and fertile to plant the seeds of Doublethink.

          1. You left out:
            “up” = “down”

          2. You forgot….

            Tax cuts = Spending

            1. Deficit reduction = New entitlements

              1. Political corruption = Democracy in action.

        3. That was pretty much the reasoning of the Nobel Committee last year, wasn’t it?

      2. “When the private space industry takes off, he’ll be given probably too much credit for telling NASA to fuck off and get the private sector to do it”

        Well NASA really doesn’t have time to do space travel anymore anyway. All their time is taken up with their new mission of making Muslims feel good about themselves.

  3. The issue is whether under the Constitution the federal government can compel an individual to participate in a private market transaction?purchasing health insurance from a private company?in which the individual had not otherwise chosen to participate.

    Emphasis added. If the SCOTUS rules “yes”, we’re screwed as noted repeatedly. If “no”, congress will find a way to abolish private health insurance.

  4. We need to get on that pile of lawyers at the bottom of the ocean thing.

    1. I wonder if BP could help us with that?

      1. If we can throw all the environmental wackos down their with the lawyers, I’m sure they’d play ball.

  5. It’s great that the judge asked that, and that judges in general are questioning the government, but I’ll leave you all this.

    “Justice Scalia: I just want to take property from people who are paying less taxes and give it to people who are paying more taxes. That would be a public use, wouldn’t it?

    Justice O’Connor: For example, Motel 6 and the city thinks, well, if we had a Ritz-Carlton, we would have higher taxes. Now, is that okay?

    Mr. Horton: Yes, Your Honor. That would be okay. I… because otherwise you’re in the position of drawing the line.I mean, there is, there is a limit. I mean–”

    Whoops. Here you go. Get your blood good and boiling tonight.

    http://www.oyez.org/cases/2000…..8/argument

  6. Isn’t it just kinda mean to “help” the uninsured by siccing the IRS on them?

    Does that ever come up in arguments?

    Why are the progressives fighting so hard to be so mean to the people they say they’re trying to help?

    1. Half the time is ‘those poor 30 million souls without healthcare‘, but the other half of the time its ‘those deadbeats not taking responsibility and making us pay for their healthcare”.

  7. George H.W. Bush just breathed a BIG sigh of relief.

  8. The upside to the mandate is that Republicans can force the Democrats to funds wars, space exploration, and whatever suits their needs once they gain control. It will be nice to see the liberals face their own handiwork for once.

    1. They had to face their handiwork in all the stuff they hated about George W. Bush. Most of them are just too clueless to make the connection.

      1. Beat me to it.

        The regulations that the progressives love are exactly what enables the petty corruption in local politics that they are always blaming on “greed”.

    2. I’ll be sure to cheer as I watch the national debt continue to skyrocket. That’ll sure teach ’em who’s boss.

  9. If Michelle backs it, can an ‘Eat Broccoli’ mandate be far away?

    1. It’s for the kids, you know. We can’t afford to run out of kids. That’s why we need all of them Latinos here, so we will always have kids to do something for…

    2. It’s for the kids, you know. We can’t afford to run out of kids. That’s why we need all of them Latinos here, so we will always have kids to do something for…

  10. [Obama lawyer Ian] Gershengorn said health insurance is “a financing mechanism,” not a product. “It’s not shoes,” he said. “It’s not cars. It’s not broccoli.”

    If someone smarter than me can explain it better, I would greatly appreciate it, but I was under the impression that an insurance company primarily made its money thanks to selling policies (one could call it a PRODUCT) and ratemaking based on actuarial science. “Financing mechanisms” on the other hand, as they apply to government are either bonds or taxes.

    1. Yes, it simply means the health insurance plan is welfare, only organized by private companies. There is a lot of short-term gain for the insurance companies (and their CEOs) because of all of the healthy people that have now have to pay premiums but don’t get sick (immediately). So the current CEOs can get their performance bonus, and then retire in a few years before performance will go down again.

    2. In fact people in the industry are in the habit of calling them “products”.

      But that’s not the point is it. Think Newspeak or the Flag of the Dutchy of Grand Fenwick.

    3. “…insurance company primarily made its money thanks to selling policies (one could call it a PRODUCT)…”

      Pretty sure Obama’s lawyers really don’t care; they’re pitching a bit of sophistry. Insurance policies are economic goods like any other.
      And education isn’t a “product” by their definition, nor is a haircut, but if they sneak it through, the sophistry wins.

      1. And education isn’t a “product” by their definition, nor is a haircut, but if they sneak it through, the sophistry wins.

        If education isn’t a product, why are state universities so determined about getting their money in advance and paid in full?

        I thought it was all about the children.

    4. Okay, here’s the “financing mechanism” argument in a nutshell:

      (1) Everyone consumes health care resources at some point.

      (2) Someone pays for those resources. Sometimes it’s the patient directly, sometimes its his insurance company, sometimes it’s the state, sometimes it’s Uncle Sam, sometimes it’s given charitably and the costs of providing it are written off.

      (3) Since you’re going to incur these services, which cost money, Congress is going to tell you how to pay for them: you have to prepay.

      That’s the argument at its most basic: we’re not telling you that you have to buy anything. We KNOW you’re going to buy health care. We’re just forcing you to prepay for the health care that you’re going to buy.

      1. This is indeed the argument, but it neglects that they do not know how much I will use.

        They don’t, if the truth be told, even know in an actuarial sense how much my cohort will use, though they do have a pretty good idea how much will be spent next year.

        So not only must I prepay but I must also buy a pig-in-a-poke.

        All of which is immaterial to the basics fact that if this is regulable under the interstate commerce clause there is nothing that is not; and that contradicts the principle that we have a government of limited and enumerated powers. Ergo, the whole idea is bollocks to use the correct technical language.

      2. So do I get a rebate for unused services based on how much I spent for this prepaid “financing mechanism”, or is it going into a trust, an account, lockbox, or some other structure penetrable only by government IOUs?

  11. “It’s not shoes. It’s not cars. It’s not broccoli.”

    Until it becomes politically expedient/necessary, then it will be.

  12. “But thanks to updated scoring guidelines, CBO didn’t score the cost of insurance purchases this time around”

    Gee, I wonder who intiated the “updating” of those scoring guidelines?

  13. We’re all snickering at this “it’s a financing decision” defense of the individual mandate, but let’s unpack this a little bit.

    Obamacare has finally forced liberals to do something that they have refused to do since Lopez, and really since Wickard and the rest of the New Deal: describe something outside the reach of the Commerce Clause power. The government doesn’t think that it has the power to compel you to buy a product or service. It may only force you to do things that may be categorized as a “financing decision.” That means that the Obama administration is not taking the position that refusal to purchase a product or service is an “economic decision” that is subject to prohibition by the government. So any liberal that you come across who tries to make that argument can now be told that Barack Obama disagrees with him. Of course, stating that Congress does not have the power to do something with its Commerce Clause power does not necessarily get us close to articulating a limiting principle for that power. But at least we now know that Obama doesn’t think that Congress has the power to make you buy a product or service unless it can be characterized as a “financing decision.”

  14. At least the federal government is not forcing anyone to eat broccoli. Yet.

    They’re not going to force you to eat broccoli, they’re just going to force you to buy it.

  15. If this isn’t struck down, prepare for lobbying at an unprecedented scale. Citizens should be forced to buy from us! No, not them, from us!

  16. Wait a minute. If insurance is not a “product”,i.e. a good or a service, then how can the gubmint regulate it as commerce?

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