Understanding the New Obamacare Decision, Texas v. United States: Part II

[Part of a continuing series of guest posts by Prof. Josh Blackman (South Texas College of Law). -EV]


Part I of this series placed Texas v. U.S. in the broader context of the eight years of Obamacare litigation. This second installment will analyze the technical aspects of Judge O'Connor's opinion concerning the individual mandate by responding to five common criticisms about the case.

[1.] How can the district court declare the individual mandate unconstitutional? Congress already repealed the mandate through the Tax Cuts and Jobs Act of 2017 (TCJA).

In December 2017, following the enactment of the TCJA, President Trump and congressional Republicans boasted that they repealed Obamacare's individual mandate. They didn't. Rather, the law reduced the ACA's "shared responsibility payment" to $0. Section 5000A(a) of the ACA provides that "[a]n applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month." Starting in 2019, individuals qualified individuals who fail to maintain a certain level of health insurance—known as "minimum essential coverage"—will no longer be assessed a penalty. This first point is not controversial.

[2.] The individual mandate, with a $0 penalty, is not a mandate at all. What is there left to challenge?

This criticism is intuitive: how can a mandate continue to exist if there are no legal consequences for disobeying? This argument fails as a matter of law and policy.

First, the federal government has long taken the position that a mandate, in the absence of a penalty, will still compel some people to purchase insurance. For example, a 2008 Congressional Budget Report—before the ACA was enacted—considered how "[p]ersonal [v]alues and [s]ocial [n]orms," apart from a monetary penalty, also enforce compliance with a requirement to purchase insurance. CBO recognized that "compliance [with the mandate] is generally observed, even when there is little or no enforcement of mandates." Why would a person comply with a legal mandate that is not enforced? CBO observed that "[c]ompliance, then, is probably affected by an individual's personal values and by social norms." For example, "[m]any individuals and employers would comply with a mandate, even in the absence of penalties, because they believe in abiding by the nation's laws."

In Texas, Judge O'Connor observed:

Law therefore has an enormous influence on social norms and individual conduct in society…. But the fact that many individuals will no longer feel bound by the Individual Mandate does not change either that some individuals will feel so bound—such as the Individual Plaintiffs here—or that the Individual Mandate is still law.

Indeed, the two Plaintiffs in this case have taken this exact position. John Nantz declared, "I value compliance with my legal obligations … [t]he repeal of the associated health insurance tax penalty did not relieve me of the requirement to purchase health insurance." Neill Hurley added, "I continue to maintain minimum essential health coverage because I am obligated to comply with the [ACA's] individual mandate."

Second, enrollment numbers support Judge O'Connor's conclusion. In November 2017, CBO and the Joint Committee on Taxation observed "with no penalty at all, only a small number of people who enroll in insurance because of the mandate under current law would continue to do so solely because of a willingness to comply with the law." The number is no doubt "small," but it is not zero. No matter how small this class is, such virtuous individuals do exist. Therefore, a certain number of individuals are still affected by a penalty-less mandate.

The mandate still has legal force, even if no penalty accompanies it. (This inquiry is separate from the standing question, which will be addressed in Part #5 below).

[3.] It's true that in 2019, the penalty will be reduced to $0. But not everyone pays their taxes right away. As a result, the penalty will continue to generate revenue for the foreseeable future. Therefore, the saving construction still holds.

Many Americans do not pay their tax bills on time, if ever. It is possible, indeed probable, that some taxpayers will defer the payment of shared responsibility payments assessed in 2018 until 2019, 2020, or even later. Moreover, the IRS can collect unpaid penalties on those late payments for years to come. And this theory is not limited to penalties assessed in 2018. Any penalty assessed from 2014 through 2018 could remain outstanding in perpetuity. Under this theory, every repealed tax—not just the ACA—could produce at least some revenue for the government indefinitely.

Initially, I found this argument persuasive, but ultimately, could not reconcile it with Chief Justice Roberts's saving construction. In NFIB, he explained that "[t]he exaction the Affordable Care Act imposes on those without health insurance"—that is, the penalty that was not actually a tax—"looks like a tax in many respects." The Chief Justice then listed three guardrails in which the "exaction"—that is, the shared responsibility payment—can be construed as a tax. First, "[t]he '[s]hared responsibility payment,' as the statute entitles it, is paid into the Treasury by 'taxpayer[s]' when they file their tax returns." Second, "[f]or taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status." Third, "[t]his process" of making the payments, "yields the essential feature of any tax: It produces at least some revenue for the Government… . Indeed, the payment is expected to raise about $4 billion per year by 2017."

Each of the three guardrails relies an import presumption: the relevant timeframe is the year in which the penalty is assessed, and more likely than not, paid. Next year, the ACA will no longer satisfy the three guardrails. (1) Starting in 2019, 0% of Americans have to pay a penalty; (2) therefore, taxpayers will not owe any penalty when they file their tax returns in 2019; and (3) as a result, the penalty will no longer produce any revenue for the government.

The first guardrail considered whether the "shared responsibility" is "paid into the Treasury by 'taxpayer[s]' when they file their tax returns." The opinion presumed that the payment is made at the same time as the filing of the tax return. It is a fair reading of Chief Justice Roberts's opinion that he did not have in mind a situation where the payments are made at a different time than the filing of the tax return—perhaps even years later.

The second guardrail referenced the complicated formula used to calculate the penalty. That provision turns on whether a taxpayer lacks qualified insurance "for any month" in a "taxable year." Once again, the controlling opinion focuses on the timeframe when the tax is assessed. In 2019, and beyond, this inquiry becomes irrelevant.

The third guardrail likewise supports NFIB's rule against perpetual payments. Chief Justice Roberts wrote that the collection "process yields the essential feature of any tax: It produces at least some revenue for the Government." And that "process" is premised on how the payment is "assess[ed] and collect[ed]," not when (if ever) it is ultimately paid. No tax has perfect enforcement rates.

In Texas, Judge O'Connor reached a similar conclusion: "It is a well-accepted practice that tax revenue is attributable to the tax year in which it is assessed, not the one in which it is paid." He added, "When individuals file tax returns in April 2019, for example, the taxes they pay and the returns they receive will affect the government's 2018 tax-year revenue." Any "future monies that come in" after 2019 "in will be because the provision once produced revenue for the Government" before 2019.

Chief Justice Roberts's saving construction was not a mere accounting exercise. Rather, it was a constitutional framework based on certain reasonable assumptions and not an intricate balance sheet. Even with delayed payments, the saving construction no longer holds.

[4.] Didn't Chief Justice Roberts conclude that the ACA merely offers people a choice: go uninsured, or pay a tax? If the penalty is now $0, people can simply go uninsured, without any consequence.

In NFIB, Solicitor General Verrilli argued that Section 5000A(a) does not contain a mandate to purchase insurance. Rather the law imposes a tax on those who choose to go uninsured. Marty Lederman articulated this position in a recent Balkinization post.

Chief Justice Robert's rejected Verrilli's argument in Part III.B of NFIB. He observed that "[t]he most straightforward reading of the mandate is that it commands individuals to purchase insurance. After all, it states that individuals 'shall' maintain health insurance." In other words, no such choice exists.

However, in Part III.C, Chief Justice Roberts was willing to accept Verrilli's argument for purposes of the saving construction:

While the individual mandate clearly aims to induce the purchase of health insurance, it need not be read to declare that failing to do so is unlawful. Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health insurance, they have fully complied with the law. Brief for United States 60–61; Tr. of Oral Arg. 49–50 (Mar. 26, 2012).

The ACA never imposed "negative legal consequences" for the uninsured; not in 2010, when the law was enacted, and not in 2019 after the TCJA goes into effect. Chief Justice Roberts found this fact essential to support his saving construction. (I discuss the importance of the Solicitor General's representation on pp. 179-181 of Unprecedented.)

However, the predicate of the saving construction no longer holds because each of the three guardrails are violated. It is still true, but no longer material, that the law fails to impose "negative legal consequences" for the uninsured. (This question is separate from the standing inquiry which will be discussed in Part #5.) That fact was important to the extent it enabled the Chief Justice to justify the alternative reading of the statute. Now, that reading can no longer be justified, and we are left with an individual mandate that "clearly aims to induce the purchase of health insurance." Such a mandate cannot be supported by Congress's powers under the Commerce and Necessary and Proper Clauses.

[5.] How does anyone have standing to challenge a mandate without a penalty?

The second question—whether the mandate has legal force—is often conflated with this fifth question concerning standing. These interrelated inquiries are doctrinally distinct.

In NFIB v. Sebelius and King v. Burwell, the Plaintiffs claimed an injury because the ACA forced them to pay some additional amount of money they did not otherwise wish to pay. However, Plaintiffs Nantz and Hurley will suffer no financial penalty for going uninsured. Indeed, even before the TCJA, the ACA imposed no legal consequence—criminal of civil—for going uninsured, beyond the assessment of the penalty. (Solicitor General Verrilli made this important representation in NFIB; see Part #4.)

The so-called pocket-book injury provides the quintessential case for standing under Article III. But it is not the only way. Consider the Establishment Clause. Arizona Christian School Tuition Organization v. Winn recognized that standing "may be shown in various ways," even when no financial cost is incurred is assessed. For example, what was the basis for standing in Van Orden v. Perry? The Plaintiff, according to the District Court, asserted that frequent visits to the law library at the Texas State Capitol brought him in "unwelcome, contact with the Ten Commandments monument." Van Orden found that "the existence of the Ten Commandments monument on the grounds of the State Capitol symbolizes a state policy to favor the Jewish and Christian religions over other religions and over non-believers." This basis for standing was so noncontroversial that neither the Fifth Circuit, nor the Supreme Court bothered to discuss it.

In the Equal Protection Clause context, "the stigmatizing injury often caused by racial discrimination" can give rise to standing, even where there is a "noneconomic injury," so long as that injury is personally suffered by the individual. For example, a Plaintiff cannot challenge a club's racially discriminatory admission policy unless he applied.

These lines of cases bolster the standing argument in Texas. Section 5000A(a) imposes a legal obligation on Nantz and Hurley by virtue of their income: they "shall" maintain insurance. Moreover, they are not subject to any exemptions under the law. That injury is just, if not more concrete than the sort of injury claimed in Van Orden and in the Equal Protection Context.

In Texas, an Amicus argued that any injury is self-inflicted: it is their fault they feel compelled by an unenforceable mandate. The same argument could have been made about Van Orden: he could have simply avoided the state Capitol, or averted his eyes when he passed the monument, or perhaps not taken umbrage at the monument. Nantz and Hurley insist that they are still bound by the mandate, and are directly affected by it. That pleading is enough to cross the standing threshold.

Admittedly, I was unable to find any cases where a non-economic injury was asserted in cases concerning the Commerce and Necessary and Proper Clauses. In the normal case, a federal regulation will impose a financial cost which would give rise to pocketbook standing. But, once again, the legal challenge to the ACA is without precedent. This absence doesn't trouble me. The restrictions of Article III constrain all exercises of the judicial power, whether a given case involves a challenge based on the doctrine of enumerated powers, rather than the First or Fourteenth Amendment. Indeed, this distinction ought to be without a difference: NFIB recognized that the structural protections of the constitutional are essential to the protection of individual liberty.

Critics will counter that Nantz and Hurley are wrong—no matter what they think—because there is no actual mandate. Such an argument conflates the standing inquiry with the merits analysis. In Meese v. Keene, the Supreme Court recognized that whether a given law violates the Constitution is "irrelevant to the standing inquiry." Moreover, the lower courts have been "careful not to decide the questions on the merits for or against the plaintiff, and must therefore assume that on the merits the plaintiffs would be successful in their claims." Whether Nantz and Hurley ultimately succeed on the merits is separate from whether they have articulated enough facts at this juncture to identify an injury.

In any event, there may be an additional injury that Judge O'Connor did not mention. The current iteration of IRS Form 1040 asks an individual if he had minimum essential coverage for all twelve months of the year. If the taxpayer checks "no," he is then required to perform several other calculations. There is no indication yet whether these forms will be amended for 2019. Though, there is reason to suspect that the IRS may still request information about individual coverage, even if there is no penalty associated with it. Such information is essential to calculate penalties under the employer mandate. The time and resourced need to complete these forms may be adequate to articulate an injury for Article III.

[* * *]

The third installment will focus on the severability issues in Texas v. U.S.

NEXT: Concurring Opinions Signs Off

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  1. Since the beginning, I have loved the hypocrisy of ignoring all the “it is not a tax” statements of Obama while using only Trump statements, often out of context, to make immigration restrictions racist and therefore unconstitutional.
    Some things never change.

    1. That piece of crap also criticized the judge today. I guess it’s only wrong to criticize a judge when he’s a black, hispanic, or homosexual ruling in favor of his tribal loyalty.

      1. He criticized them to their faces at his SOTU, but the media is all, Obama is a saint and Trump done destroyed our democracy.

        1. Neither Trump nor his band of disaffected goobers is near strong enough to destroy American democracy. They’re pimples.

    2. I’ve always just assumed there are some things under the taxing power that are not the magic word tax.

      1. In the original NFA litigation, the Court took the position that, if Congress chose to call something a “tax”, then who were they to dispute that, so long as there was any possibility that some revenue would result? (This in the context of a 2000% “tax” that was clearly intended to discourage a purchase, not bring in revenue.)

        Roberts did that one better, declaring that something Congress explicitly declared was a penalty was really a tax, even though fines typically do yield at least some revenue. You really have to ask why he was so obsessed with finding a “saving construction” that he adopted one Congress had rejected. Apparently not saving the ACA just wasn’t an admissible outcome, for some reason he didn’t care to state.

        Well, at this point it may be too late, the ACA being just a disguised entitlement program Congress forced insurance companies to run for them. Entitlement programs are, famously, the closest thing to eternal life; Diffused costs and concentrated benefits make them politically untouchable.

        Yet another entitlement program that will be eternal. Yet another market distorted beyond all sanity. Yay.

        1. Pretty much. Once people are given free shit and allowed to keep the franchise, they will use their vote to ensure that this free shit is provided in perpetuity. None of the entitlements will ever be reformed until the dollar becomes worthless.

        2. But I see your story of the awful saving construction mostly obviated if one allows that the taxing power encompasses some things that might not be formally called a tax.

          I also want to talk a bit about your ashes and sackcloth routine about entitlements, because it’s a good differential between our two philosophies. Entitlements usually rise up in areas where the market isn’t functioning well, either because it can’t or because it’s been lobotimized.

          We can discuss which it was below, but mostly I want to talk about how badly the pre-ACA system functioned. Despite stories on the right of the globalists rubbing their hands in glee, in reality no one left or right loves the ACA, but there sure was demand for something. And demand not by the working class, but even by the middle class (which is IMO why you saw any motion at all)

          The health care status quo ante was not a terribly efficient use of resources, effectively rationing care to those able to pay for the best insurance and leaving insurance companies to be effectively badly incentivized death panels. And also leaving many completely without insurance, receiving a level of care no one specified, just one cobbled together over the years.

          1. The pre-ACA system was bad in part because of government intervention and also in part because society refuses to let people sink. Our health care system would work very well if we let those who can’t support themselves die off. But we don’t, so it doesn’t.

          2. “how badly the pre-ACA system functioned”

            Much better than the post ACA system.

            Premiums have increased, deductibles have skyrocketed, and there is no evidence whatsoever that health care has gotten better.

            The post ACA system is so bad that after less than 6 years of it, its proponents have abandoned it and want something else.

            1. ACA was intended to fail so that its proponents could then say “See? We tried a market approach and it doesn’t work. Time for single payer!”

            2. Oh, the GOP has been trying to get premiums and deductibles to be as bad as they say, but it ain’t working.

              Health care may or may not be improving in quality, but it sure is improving in how many people are covered. Which is an important metric to me, at least.

              The fact that the pro-ACA people now want medicare for all is not a reflection on the ACA, it’s a reflection on how policy advocates work.

              1. How exactly is the number of people covered relevant when many of them are “covered” in the sense that they pay $15,000 a year in premiums for a garbage plan with a $10,000 deductible?

                In any case, how is it a “reflection on how policy advocates work?” Are you saying that we should expect (and excuse) their lying about their ultimate intentions?

                1. You do know that the ACA specifically targeted garbage plans, right? And that Republicans have been complaining ever since that young, healthy people can’t skate by with “plans” that only nominally qualify as health insurance?

                  1. “young, healthy people” don’t need any health insurance at all other than a disaster type policy [if they get in a car wreck etc.] with a very high deductible

                    Its a complete waste of their money to require them to pay for full coverage.

                    1. Bob – it’s almost as though insurance isn’t the same as a directly used commodity, and that risk pooling is a feature, not a bug.

                    2. “it’s almost as though insurance isn’t the same as a directly used commodity, and that risk pooling is a feature”

                      If young healthy people want to waste their money on it, so be it.

                      The government forcing them to so is immoral and tyrannical.

              2. A Mother Jones article? The Daily Worker not available?

                “Health care may or may not be improving in quality, but it sure is improving in how many people are covered. ”

                Health care ? covered by insurance

                1. Anyone could personally provide health insurance to every single American! All you need to do is have a $1 billion deductible per person, and your “insurance plan” would be universal.

                2. Read the article and respond to the numbers, or I’ll take your ad-hom as the admission of ideology over facts it sounds like.

                  Coverage is necessary but not sufficient for care under America’s current system.

                  1. Now all you have to do is define “coverage” in a way that doesn’t make a person of average intelligence chortle; and compare that definition with Obamacare, and, while you are at it, a rational health plan for a healthy single 27 year old male.

                    1. Isn’t the whole reason insurance is a thing is to make it rational for healthy youth to buy into the risk pool?

                      You can quibble that the coverage isn’t good enough, (you socialist you), but for the newly covered, it’s sure better than the previous ‘no preventative care and constant use of badly optimized urgent care’ regime.

                    2. You can quibble that the coverage isn’t good enough

                      Oddly enough, that was the argument of Obamacare supporters about high-deductible plans (they lied, of course).

                    3. Now do “rational”.
                      And explain why we needed Obama to tell us why a “rational” healthy 27 yr old male would want to be a part of Obamacare.
                      You aren’t (for the 4 billionth time) talking about “insurance”.
                      You are talking about “social insurance”–like Social Security retirement. The healthy people have to be compelled to subsidize the sick, the same way that young workers have to be compelled to subsidize people too old to work.

                    4. sarcastro : Isn’t the whole reason insurance is a thing is to make it rational for healthy youth to buy into the risk pool?

                      No, not even slightly.

                      What makes it rational for anyone to buy insurance is that the premium is worth less to the insured than the expected value of the cost to him should the insured event occur. Since different customers face different risks, based on their age and health, the premium for different customers, if set by the market, will differ widely. It would be completely irrational for a healthy 25 year old to pay the same premium as a 62 year old with type 2 diabetes. The risks covered have completely different expected values. (There’s nothing special about health insrance here either. It would be deranged to pay the same for fire insurance for your little $80,000 house on the prairie, and your $10 million Manhattan condo.)

                    5. None of ths has anything whatever to do with “risk pooling.” An insurer could write a single premium with a single customer to cover a very unlikely risk, and so long as the premium reflected expected value, it would be a pefectly rational transaction for both parties.

                      “Risk pooling” has to do with the insurance company’s management of its own risks – ie the statistical reality that if you write policies for lots of risks that are not highly correlated with each other, only some of them will need to be paid out. Consequently you can get by with a lot less capital than if you wanted to guarantee that you had the capital to pay out if all the policies you had written had to be paid out. The idea that you should write a lot of policies with different expected claim values at the same premium is not called “risk pooling.” It’s called the short route to bankruptcy.

                      Obviously there is a secondary connecton between risk pooling and the rationality of an individual taking out a policy. It’s not rational to take out a policy with an insurer whose ability to pay claims you doubt. But that has nothing to do with the rational price that you are willing to pay to have your risk covered, That’s simply a matter of the expected value of the risk you want insured. Which is a lot lower for young healthy people than old sick people.

                    6. Come on now, I remember the pre-ACA days, and there was not a separate plan for each individualized actuarial risk cohort, as you imply the market would demand.

                      Markets are a means to an end. If you are arguing for market-based solutions for the sake of being able to have a market, you’re putting ideology ahead of good policy. Which is why HSA’s suck.

                    7. Obviously you do not present the same risk as everyone else of the same age and medical history. But, under current technology, it’s too expensive to discriminate, ie it would cost the insurer more to reliably split your premium category into two by subjecting you to a health check, than they would save on expected claims by doing so. Hence since, as you say, “markets are a means to an end” you can be put in the same premium category as shadow sarcastro.

                      But if an insurer could work out how to discriminate between you and shadow sarcastro, at a cost that would be repaid in lower expected claims, rest assured, that – in a market – is exactly what they would do.

                      Which is why – in a market – they want to know your age and your medical history.

                      This is an utterly banal point of microeconomics which is not limited to insurance. If the cost of testing repays you with higher profits, you test. If not, you take your chances with the statistics. What you never do (unless the government compels you) is ignore data that costs you less to gather than it will save you.

          3. Entitlements usually rise up in areas where the market isn’t functioning well, either because it can’t or because it’s been lobotimized.

            “well” is cracking under an unbearable weight in that sentence. The market “fails” because people – and their political representatives – would prefer to acquire the relevant goods and services at below the market price. But that is a universal feature of all markets, indeed of all life. Who doesn’t want more and better, for less than the current asking price, or preferably for nothing ?

            I should very much like a fancy apartment in each of New York, London, Paris and Hong Kong. What’s more I am willing to pay up to $150,000 times 4 to acquire these things. But sadly the market price is more like $3 million times 4.

            This is not a case of market failure, or even a case of the market failing to work well. But it is a problem that could be solved with a carefully targetted entitlement program 🙂

            1. Markets aren’t great for things where there is a universal risk-based need. That means you cannot avoid some sort of rationing, and markets ration mostly to the rich.

              Your very analogy damns you – the ways health care is distinguishable from housing show why one has well-functioning markets (absent some recent financial shenanigans), and the other does not.

              How is it not market failure with how many were not covered by insurance, but wanted to be? Are you arguing health care is a luxury like having a fancy apartment?

              1. No, they didn’t “want to be” covered by insurance. They “wanted” to pay premiums that were actuarially not sufficient to cover their risk profile. I’m sure the 19 year old driver with 4 accidents and 2 DUIs “wants” to pay the same $100 a month that I pay for my two cars, but the numbers just don’t work. The only way for him to be able to pay $100 would be for everyone else to pay MORE than their risk profiles.

              2. Markets aren’t great for things where there is a universal risk-based need. That means you cannot avoid some sort of rationing, and markets ration mostly to the rich.

                What’s a “universal risk-based need” ? Something that everybody is at some (low) risk of needing ? That’s what the insurance markets are for, and they work pretty well most of the time. (I can’t see what “universal” has to do with it, btw. Why wouldn’t non-universal risk-based needs face exactly the same issues as universal ones ? To take an obvious example, well over half the population faces no risk whatever of getting pregnant. But those that do face such a risk may wish to take action to manage the risk, either of pregnancy itself, or of the consequences thereof.)

                Sure insurance has some particular problems that don’t arise in more straightforward transactions – policing asymmetric information, and deceit, about the pre-contractual level of risk; the “agency problem” ie a conflict of interest between insurer and insurer about the costs and benefits of claim satisfaction. But those difficulties are part of the structure of reality.

                1. Providing a non market – ie government – solution to these problems doesn’t magically solve them. As regards the conflict of interest, it remains the same. The “insured” still wants lots spent on him, the government not so much. And eliminating the pre-contractual risk assessment eliminates the market pricing of the risk. This has two effects – the provider, now the government, can no longer compute what it is worth spending to face the risk; and the “insured” loses his financial incentive to manage his own risk.

                  1. Market solutions are superior to government solutions but there are problems that markets can’t solve, like national defense. If the problem is having uninsured human beings, we know markets won’t solve this problem, because we’ve already observed markets throughout human history that don’t result in universal coverage. That may mean we’re chasing our tails, but it should be uncontroversial that markets will not produce the ACA’s intended result of coverage for all.

              3. I’m not completely sure what you mean by “a universal risk-based need” but there are lots of things that are universal needs. Food, shelter and clothing all come to mind. And it’s pretty darned risky to try to do without any of them. Yet markets seem to do just fine for those things.

                But I again think that you’re confusing the issue by conflating insurance with care. Literally nobody “wants” insurance. We want health care. We want someone ready to make us well when we are sick.

                Insurance is nothing more than some shifting of when (and to a lesser degree, how) we pay for it. I’m trading small, regular payments over my entire life in exchange for a few large payouts when I have an emergency.

                Everyone claiming that markets inevitably fail in this situation should consider that before WW2, employer-provided health insurance was virtually unheard of. Yet somehow, people still got in to see their doctors. Even the very poor had access to health care. (And by comparison to today’s standards, the difference in care available to the very richest and the very poorest was minor indeed.)

                1. Literally nobody “wants” insurance. We want health care. We want someone ready to make us well when we are sick.

                  I don’t think this is entirely true. We do like to be made well when we’re sick, but we also get direct and immediate psychological benefit from knowing that we have got that risk covered (to some extent.) Virtually everybody is risk averse, and the reduction of risk is of itself an economic good we are willing to pay for.

                  Insurance is nothing more than some shifting of when (and to a lesser degree, how) we pay for it. I’m trading small, regular payments over my entire life in exchange for a few large payouts when I have an emergency.

                  No, it’s more than that. Very few householders collect on their fire insurance. Those who do collect, collect way more than the premiums they have paid. You are paying a small premium because the expected value of lots of small premiums is roughly the same as the expected value of a few large payouts. When you buy (fire) insurance you are essentially placing a bet that your house will burn down. You get long odds because it’s an unlikely event.
                  This is most crashingly obvious in the derivatives market. Lots of participants are managing risks a la fire insurance. But other players are just placing bets as if they were at the racetrack.

            2. Actually, it is a case of a market failure. A failure of a market that uses its power over local politicians to prevent increased competition.

              One major reason for inflated home prices is the difficulty of getting approvals from local government to build. Undoubtedly, prices in these locations would be high even without consideration of that factor, due to increased demand. But that supply is constrained because current incumbents don’t like competition that drive down their property values is a market failure. At least as that market exists alongside government institutions and politicians with the power and will to restrict development.

          4. “The health care status quo ante was not a terribly efficient use of resources”
            This is true. It is also true that healthcare insurance was heavily regulated during that time. I will pick “lobotomized”.

            1. My issue with this is the same as my issue with the general argument that true free markets have never been tried – the regulations on insurance were at least intended to avoid the problems a purer market might bring. In this case, to maximize coverage and minimize market-based rationing towards the well-to-do.

              The counterfactual on how awesome an unregulated marked would needs more evidence than markets good, or else we’re just doing magical thinking rather than proof.

              1. It appears that the market for a college educations suffers from the same treatment the healthcare insurance market gets. The presence of a guaranteed 3rd party payor applies upward pressure on prices.
                It would be nice to have as many plan options as possible. It would be nice if insurance plans weren’t tied to an employer. It would be nice if women didn’t have to subsidize the cost of Viagra and in the same regard men didn’t subsidize the cost of birth control pills.
                Sooner or later, the cost of your healthcare has to reflect who you are and where you are in life. Let’s get to that number and then figure out the subsidies.

                1. Yeah, our evolved system of employer-based insurance-based care suuuucks. And the ACA locks that in, which is part of why it sucks.

                  College is an interesting one. It’s certainly less vital than health care, but it is increasingly seen as vital if you want a prayer of class mobility. Which is arguably a public benefit – opening up the meritocracy to more people – but which isn’t nearly the same as senior citizens eating cat food or veterans being neglected after their service or poor people not being able to feed their kids.
                  There’s traction on the left to turn it into an entitlement, I will be interested to see how that plays with the wider polity. (Personally, I’m down, for the public benefit purpose mentioned above)

                  Risk pooling for stuff like viagra and birth control pills just seems like pretty straightforward risk pooling if-your-going-to-use-insurance line drawing. I see no reason why that’s an obviously bad place to draw the line, actually. Large populations of both genders benefit from the other genders’ sex-drug technology.

                  1. I never made the case the employer based healthcare insurance sucks. You wanted to discuss markets. Employers got into this business due to government policy. My only point was to suggest that policies should be as mobile as the people that own them. People change jobs.
                    We can have the “who owns education and who is authorized to pay for it” discussion some other time.

                    1. So you don’t like governments making policy in this arena, but you don’t mind employer based healthcare insurance even though it’s existence is due to government policy.

                      I’m not tracking?

                      Anyhow, if you want insurance to travel with the person, tying it to employers is pretty restrictive, isn’t it?

                      Fair enough on the college bit. I haven’t thought about it too much, but I’ll bet I’ll need to soon.

                    2. You are good at making assumptions about what I like and don’t like. Again, you wanted to discuss markets and the degree of freedom they have. It’s entirely possible that companies would have provided healthcare insurance even if the federal government hadn’t implemented wage controls during WWII. But then, maybe not. Can we agree that what we got was not a result of the “free market”?
                      I only suggest that it’s a good thing when consumers have the maximum number of choices on products and service providers. I don’t think the ACA pointed us in that direction. I have also admitted that there will be a place for subsidies in this equation. I just prefer it to be after the freedom of choice options have been exhausted.

                    3. I’m not being purposefully obtuse, but sometimes it happens.

                      If you want a free market for health care, I don’t see how that goes with supporting governmental policies that support employer-tied health care.

                      I think we may be talking past one another. To reset, your argument is that true free markets have never been tried for health care, but that alone isn’t really much of an argument (and echoes what I hear from Tankies elsewhere on the web).

                      The ACA’s purpose wasn’t maximizing consumer choice, it was increasing consumer coverage. Because those two are in tension, and it’s not much of a choice if you’re priced out of the market.

                    4. Why would I care if employers want to offer healthcare insurance as part of a compensation package? It’s the mandate that I oppose. A while back, I had a conversation with a customer about his business. He had to make a choice about growing to a point where he would have 50 employees. Why was that part of the decision making process? ACA. The wisdom of government!

                      “The ACA’s purpose wasn’t maximizing consumer choice,” That is the most important comment in this thread. I would prefer that we talk about why that is the case.

                    5. 1. I don’t see how you can think the mandate is more of an imposition on the free market than the previous regime. And I continue to see no proof that the free market would result in any better outcomes other than ipse dixit.

                      2. Consumer choice isn’t the be all and end all, especially in this arena of life-and-death resource allocations. It’s not nothing, and shouldn’t be neglected, but there are other things that must be addressed as well.

                      3. Similarly, we make a lot of policy decisions that are about things other than maximizing employment. We remember the Lochner era when we let management have carte blanche, and there were a lot of jobs, but they were basically wage slavery. Your anecdote is just highlighting one metric among many and essentializing it.

                      4. I love markets – they concentrate information, they harness a human vice for an indefatigable engine of efficiency and innovation. But since Teddy Roosevelt we’ve known free markets do not create good outcomes. And since well before then we’ve known there are some areas where efficiency isn’t the main outcome we want. That’s where we are. And why I keep asking for more than ‘return to markets, they will solve all.’ Because I don’t trust government, but when it comes to moral questions like life and death I trust markets even less.

                    6. It’s nice that you have taken the time to be so detailed and polite in your responses. Thank you for that.
                      Is the mandate more of an imposition than the previous regime? Yes. Were there impositions before the mandate? Yes.
                      Since anecdotes are out of bounds I will just restate what I think are your most important points.
                      1. Consumer choice isn’t the be all and end all.
                      2, Free markets do not create good outcomes.
                      3. Efficiency isn’t the main outcome we want.
                      I see no way to convince you that loosening the reins on consumers and service providers can be a good thing.
                      Be well.

                    7. I didn’t mean to imply anecdotes are out of bounds. Especially since there are legit stats that your particular anecdote is generalizable. But as I noted above, my response is not that the disincentive doesn’t exist, but that it’s a cost outweighed by the benefit.

                      I don’t know that the mandate more of an imposition than the janky market from before, even looking at consumer choice.

                      To put a bit more clarity on what I wrote early this morning:
                      1. Consumer choice isn’t the sole metric of policy success, particularly in the health care regime.
                      2. Purely free markets cause insider trading and monopolies and whatnot. You need at least some guardrails.
                      3. Efficiency is great, but only in service of a larger goal. Efficiency for efficiency’s sake is process-oriented myopia.

          5. re: “Entitlements usually rise up in areas where the market isn’t functioning well”

            Objection – assumes facts not in evidence.

            In my observation, entitlements rise up in areas where a couple of influential demagogues figure out how to use the issue for personal gain (either political or financial). While I would agree that the pre-ACA system was pretty horrible, the ACA didn’t actually solve any of those problems. Remember that the ACA was first raised as a health care reform bill. But when the politicians realized that there was little to be gained from demonizing doctors and nurses, the bill was quickly watered down to a health insurance reform bill – and as ARWP notes above, the US health insurance problems were so bad largely because of prior government distortions of the market.

            1. See, this is the fun policy discussion I was hoping for!

              The ACA sure did ameliorate a lot of the uncovered people problem.

              How might on distinguish actual demand from demogogic created demand? Because to my eye, there was a legit issue that Social Security addressed. Same with the VA.
              And the Great Society similarly dealt with some pretty neglected people.

              I don’t recall any shift in the ACA from care to insurance. Are you talking about the public option? I also don’t recall much demonization of doctors – that was Hillarycare’s mistake. The AMA even signed on, IIRC.

              1. re: the shift from care to insurance:

                Go back to the earliest discussions about the ACA’s goals. Pres Obama’s speeches were about “bending the cost curve” of healthcare and reducing the ever-growing fraction of GDP committed to the health industry. All of those goals were abandoned within the first year and the discussion shifted to “reducing the number of uninsured”.

                Note in particular that the AMA did not sign on until after that first year – that is, after the goals shifted away from the high cost of care and to the health insurance changes.

                1. So it was the public option. I don’t think it’s a fair reading that the shift once the public option died was not policy but demagoguery having to have it’s pound of policy.

                  The ACA started at a compromise – learning from Clinton’s mistake, they kept the insurance companies in as the middle men, thus buying the silence of those powerful interests. Which I agree points to how screwed up and full of rent-seeking the policy playing field (and thus the market) was.
                  But I don’t think that implies that deregulated insurance companies would be a better solution.

                  1. re: “So it was the public option.”

                    Huh? I don’t recall the public option ever being on the table as a realistic solution. It certainly was not in any of the earliest discussions. The first I remember hearing about single-payor was as the boogeyman after resistance to Obamacare surfaced in the second year. A kind of “if you think this is bad, wait till you see what I’ll do instead.”

                    The ACA turned into a compromise – and, as you say, inserted lots and lots of opportunities for rent-seeking and waste in the process. I don’t know that fully-deregulated insurance companies would be better but it’s hard to see how they would be worse than the mess we ended up with.

                    1. Oh, the left was very into single payer, and very unhappy at Obama. Still are, really.

                      The narrative I could not stop hearing from my more doctrinaire liberal friends was that by not starting at single payer, Obama conceded the ballgame before the game even started. Dunno if that’s true, but certainly he didn’t come in with socialist policy guns blazing.

                      The ‘the shift from care to insurance’ was brought about when Lieberman killed the public option.

                      I don’t know that fully-deregulated insurance companies would be better but it’s hard to see how they would be worse than the mess we ended up with.

                      See, here I very much disagree. I see a fully-deregulated industry ending up with extremely stratified tiers of care, and with the 50% poorest just getting jobbed.
                      Am I more right than you? We will never know. But markets do not optimize morality, that’s for sure. And morality is not absent from what we want in our health care policy.

              2. Now, let’s return to what the ACA actually did. On the books, it reduced the number of uncovered people. In practice, I’m a lot less confident about the claims of success. While the number of uninsured have gone down, the number of underinsured (measured by people who say they’d buy something different if they were allowed) has gone up. Premiums have definitely gone up and it’s natural to assume that some people on the edges of society will have to make choices between those higher health insurance premiums and other priorities such as rent or food.

                Finally, I think it’s really important to tease out the components of ACA. Extending parental eligibility to age 25 probably had the single biggest impact on uninsured count – but those are the people least in need (statistically) and that change had relatively little cost (and no bureaucracy). Eliminating the preexisting conditions rule was probably the second most important change – and also required essentially no bureaucracy. The real waste of the ACA is the massive bureaucracy and regulatory burden for a very tiny remainder of people who signed up for all the new plans. The ACA was passed as a bundle (and might have to be treated legally as a bundle) but we ought not to think about it that way when evaluating it as policy.

                1. Premiums would have gone up anyhow, though. We will never know the counterfactual of how it would have gone without the ACA, but you are not free to pretend it would have been flat premiums.

                  So, too, with ‘underinsured.’ There was a lot of dissatisfaction with insurance before the ACA. Add in that the GOP made it partisan, and I’d like a better number of people who wish they could buy something different.
                  Especially since under the ACA you can always buy more insurance, so I presume ‘underinsured’ ironically means they wish they could have a less robust plan.

                  If the numbers were just the extension of the parental elegibility, you would see a big step function and then just tracking the population. And yet the coverage rate continues to rise (or did through the summer, the last time I checked). And this is despite the new administration killing any ad spends or anything else.

                  This entire imbroglio is about the idea that ACA must be taken a bundle. Indeed, the various moving parts you highlight do depend on one another, which is why red states monkeying with Medicaid has been such a problem in the larger implementation.

                  1. Premiums would have gone up anyhow, though. We will never know the counterfactual of how it would have gone without the ACA, but you are not free to pretend it would have been flat premiums.

                    And you are not free to pretend that the ACA wasn’t promoted as a cost-cutting law.

                    1. First, it has cut costs, if you count the governmental burden of people getting their care through emergency rooms.

                      Second, that assumed states would embrace the medicaid expansion, and not be spiteful partisans.

                      Third, we do not know the counterfactual, so we do not know what costs would have been. Health care inflation was out of control, and the statistics are not being gathered by the government…for some reason.

                      You are so sure, but you have no proof. Which is IMO by design of the current Admin.

          6. “But I see your story of the awful saving construction mostly obviated if one allows that the taxing power encompasses some things that might not be formally called a tax.”

            But why SHOULD one do that? This is “How many legs does a dog have if you call his tail a leg?” territory.

            No, it’s worse than that, because Congress actually called the tail a tail, and Roberts called it a leg to get to five.

            The pre-ACA system didn’t work very well because it was already lousy with interventions, and stupid ones at that. Post ACA works even worse for most people, (Who already had insurance!) because it wasn’t even a reasonably well designed entitlement program. It was an entitlement program shoehorned into regulation of an industry in order to keep it off budget.

            Look, people have to eat. Some people can’t afford to. Do we respond to this knowledge by ordering grocery stores to hand out free food to the poor, and then make gardening illegal so the stores can overcharge everyone else without their walking away?

            No, we have a free market in food, (Or at least much closer to a free market than health care has been since WWII.) and directly and on budget subsidize those who can’t afford it. ‘

            We could have done the same with health care. Gone back to the free market that got ditched during WWII rationing, and just had a “health care stamps” program to help out those who couldn’t afford a minimal level of care.

            But that would have been too transparent, I guess.

            1. Exactly. Welfare spending is politically unpalatable, so it’s dressed up as “insurance” or an “investment.” Social Security is a great example. If it was truly an insurance program, the benefits would be linear (meaning someone who paid the taxes of an $80k earner would get double the $40k earner). But it doesn’t work that way.

            2. I don’t buy your magic words understanding of Constitutionally enumerated powers. You’re the one with the ‘you didn’t call it a dog – gotcha!’ not me.

              It’s not like we can’t know a function of the taxing power when we see it – functional creep of those contours would be pretty difficult to see, and more difficult to get by the Court, given public opinion about that particular power.

              Post ACA works even worse for most people that’s a right-wing assumption that is seeming to hold increasingly less well, if public opinion has any say on it (and I’m not saying it disposes the question, only that you didn’t).

              We have a LOT of programs making sure people have enough to eat, Brett, maybe that’s not the best example?

              Your vision of dialing things back to the Great Depression-era entitlements is not workable. Do you think that’s because people love them some insurance? Or is it maybe because even employed people don’t much like living in a society where if you can’t work, you die?

              1. Your vision of dialing things back to the Great Depression-era entitlements is not workable.,

                Why not? Healthcare back then was actually cheaper.

            3. “But why SHOULD one do that?”

              Separation of powers, respect for coordinate branches, judicial humility? The least dangerous branch, and all that. Keep in mind this case involves repeal of a Republican-backed change in the law.

        3. You really have to ask why he was so obsessed with finding a “saving construction”

          Leaving aside the particular context, it’s not obvious that it’s ignoble for a judge to give Congress the benefit of the doubt as to whether a law is constututional, reserving his awful judicial powers to strike down laws for those that seem clearly unconstitutional to him. Perhaps a libertarian minded judge might take the opposite view (which wouldn’t be ignoble either) but unless the Contitution specifies a particular prejudice, I don’t see a problem with either.

          I suppose a Constitution with enumerated powers might lead me to prefer the libertarian view, but the contrary view is not exactly evil.

          In particular it seems odd to strike down a law that would have been constitutional enacted under heading X, merely because it was enacted under heading Y. On the other hand if Congress insists it’s doing a Y and not an X, maybe it should be helfd to that.

          1. Except that Roberts had no issue striking down life without parole for minors, which is not CLEARLY unconstitutional to anyone. The problem isn’t his philosophy. It’s that it’s inconsistent.

          2. Holding Congress to their political promises is a ship that sailed long, long ago.

          3. Personally? I don’t think the ACA could have been constitutionally enacted under any heading, if we were still taking, yeah, enumerated powers seriously.

            But, yeah, if Congress insists on doing something the unconstitutional way, they shouldn’t be permitted to just because a constitutional way of doing it might have been available.

            1. “…if we were still taking, yeah, enumerated powers seriously.”

              Is taxation for general welfare not an enumerated power? What if it was enacted under the Raise and Support Armies provision to keep the populace healthy enough to fight?

              1. An implication of the “necessary and proper” clause is that Congress isn’t allowed to engage in sophistry to enact legislation.

                1. That’s a strange reading of a clause inserted to correct a problem with the Articles of Confederacy, namely that its limitation that the federal government’s powers were limited to those expressly mentioned. The Constitution was drafted to give the federal government incidental powers that were not expressly enumerated.

        4. “You really have to ask why he was so obsessed with finding a “saving construction”…”

          Because that’s what the Constitution requires. Savings constructions are a natural byproduct of the original intent behind Article III judicial review.

    3. “…I have loved the hypocrisy…”

      You only think it’s hypocrisy because you don’t understand constitutional law. Animus may be something that courts can consider in 1A establishment clause violations, while still being irrelevant to determining Congressional intent under enumerated powers. In the former case, the animus is part of what makes the law unconstitutional, and so a savings interpretation would be illogical. (I actually don’t think animus is relevant, and agree with Scalia’s concurrence in Church of Lukumi; but that isn’t current law.) However, if Congress passes law Z under X that it was authorized to enact under Y but not X, judicial deference through a savings interpretation effects a constitutional harm on no one. If Congress could do Z through Y, no one can complain about being subject to Z on constitutional grounds.

      Another thing you don’t get is that President Obama didn’t enact the ACA, and so his statements about it not being a tax would be irrelevant to Congressional intent. Whereas President Trump’s statements about it being a Muslim ban are directly relevant, since the governmental action was his own Executive Order.

      1. Well done.

        The entire conversation about the Constitution question needs to be:
        “Can Congress pass a law (Law A) that causes another law (Law B), to which it is unrelated, to become unconstitutional?”
        “If Law A causes Law B to become unconstitutional, shouldn’t the offending law (Law A) be the one ruled unconstitutional?”
        and also
        “If Law X needed to overcome a filibuster to be passed, should Law Y, which nullifies Law X, also need to pass the same legislative threshold?”

        Congress had JUST TRIED to repeal Obamacare legislatively, and was unsuccessful. Furthermore, they explicitly changed the tax to $0, instead of removing it completely. How, then, can a judge rule that they, as the same branch of government which enacted the initial legislation, purposefully (yes, perhaps they did privately, but certainly not publicly) removed the clause that was its constitutional saving grace?

        I think the bigger concern–far bigger than any of the micro-issues that either side wants us to think should be the concerns–is that the Congress is now given a roadmap to magically make standing, Constitutional laws unconstitutional when they try but cannot just repeal the law legislatively. Remember–it can be done from either side–let’s change this law in a wacky way so that it is now unconstitutional!

        1. “If Law A causes Law B to become unconstitutional, shouldn’t the offending law (Law A) be the one ruled unconstitutional?”

          Obviously not. If Law A (the later law) causes Law B (the earlier law) to become unconstitutional then the later law represents Congress’s most recently expressed will as to both laws. So if the courts are forced to choose between allowing the later law or the earlier law to have effect, the courts would have to choose the later.

          But I don’t think that’s the choice the courts are facing. They are being asked to decide whether the current, obviously constitutional, law, made under the taxing power, does or does not have the effect of making a prior law unconstitutional. Judge O’Connor seems to think it does, but I’m quietly confident that another judge will come along shortly and disagree with him.

          As to giving priority to laws that have leapt over the Senate filbuster, over laws that have only cleared a bare majority, that needs a lot of polishing and a really good advocate to get it up to “hopeless.”

  2. Lederman argues that a consequence of Blackman’s position is that the five groups of people who have always been subject to the mandate with a $0 penalty were in violation of the law from the get go. I think another consequence is the mandate as applied to these five groups has been unconstitutional from the get go.

    How does Blackman respond to these observations?

    1. As to the first consequence: yes, anyone subject to the mandate who didn’t follow it were technically in violation. It’s not such much a “consequence” as it is simply Blackman’s position.

      People might flout a law if there’s no penalty, but that doesn’t mean the law is actually a nullity. Could the government bring civil action against someone engaged in the unlawful and otherwise non-penalized behavior? I think so, subject to due process and other concerns. Maybe a private cause of action could be predicated on such a law.

      As to the second consequence: at least since the Supreme Court decision in NFIB, I think that’s true. Yet that is also the genesis of my question below. You suggest such a result to be a possible consequence of Blackman’s analysis. But isn’t that exactly the issue addressed by the Supreme Court? Whether a mandate qua mandate is constitutional? Or did the Court not really do that? As I said below, this is something of a conundrum or paradox.

      1. As I understand Blackman’s argument, Robert’s saving construction meant that anyone who paid the required non-zero penalty rather than carry insurance was not in violation of the law, but you are in violation of the law if you don’t carry insurance when the required penalty is $0.

        1. Looks that way.

          This guy is a teacher?

        2. Sort of. The implication of Blackman’s argument as it relates to Roberts’ saving construction is that a person is not violating the tax law but is running afoul of the command to buy insurance – ie they are two different things. If you owe $0 capital gains taxes, for example, we wouldn’t say you’re not in violation of the law. You just don’t owe the tax. If another section of law said you must have capital gains (but with no specified penalty), then yeah you’d be technically in violation if you didn’t have any.

          Blackman is proceeding (as did Judge O’Connor) as if the mandate – a legal dictate – is still law and what Roberts did was separate the penalty as distinct. However, if the Court actually struck down the mandate, as Judge O’Connor writes early in his opinion, then shouldn’t the plaintiffs lose because the law they purport to follow was already ruled invalid? Yet there clearly is/has been confusion about the meaning of Roberts’ opinion. Does the conditional nature of Roberts opinion make it not so definitive on whether the mandate is still law? The implication is that, through the saving construction, Roberts actually did hide an elephant in a mousehole.

          1. The implication of Blackman’s argument as it relates to Roberts’ saving construction is that a person is not violating the tax law but is running afoul of the command to buy insurance

            That’s not how I read Blackman’s argument. In particular, Blackman acknowledges that with the savings construction (my emphasis), “if someone chooses to pay rather than obtain health insurance, they have fully complied with the law.” Blackman argues the law for not carrying insurance is only violated when the savings construction does not apply; when the penalty is $0.

          2. Blackman is proceeding (as did Judge O’Connor) as if the mandate – a legal dictate – is still law and what Roberts did was separate the penalty as distinct.

            I think that also misrepresents Blackman’s argument. Backman is proceeding as if Roberts held that Section 5000(a) is not a mandate under the savings construction. Instead, the law “merely offers people a choice: go uninsured, or pay a tax.” Blackman argues Section 5000(a) should be read as a mandate only when the penalty is $0, and the Court has yet to weigh in on whether 5000(a) when interpreted as a mandate is unconstitutional.

            1. the Court has yet to weigh in on whether 5000(a) when interpreted as a mandate is unconstitutional.

              I need to correct my interpretation of Blackman’s argument. He is saying that the Court in NFIB held 5000(a) unconstitutional when it is interpreted as a mandate. The question for which the Court has yet to weigh in is whether 5000(a) should be interpreted as a mandate when the penalty is $0 (noting the Court held it is not a mandate when the penalty is non-zero).

  3. Appreciated if you can address the conundrum of whether the mandate was already held unconstitutional in NFIB. There has been uncertainty on the effect of the Court’s holding in NFIB on the mandate among scholars and politicians. But if the mandate was already held unconstitutional – as O’Connor writes that it was – then aren’t the plaintiffs proceeding on a mistaken belief that the mandate (qua mandate) is still law? Or if that might be excused, how do we view Congress’s intent if the mandate was already eliminated by the Supreme Court? Especially if Congress may not have been cognizant of that fact? Do we impute knowledge of court holdings to subsequent acts of Congress on the same law? This is something of a paradox in O’Connor’s opinion.

    Or, despite O’Connor observing that the Supreme Court held it unconstitutional, can we say it was in some way unclear or even non-definitive?


  4. “Therefore, a certain number of individuals are still affected by a penalty-less mandate.”

    It started with compulsion, and now it’s just “affected”. I didn’t understand Article III standing to rest on being “affected”. Anyway, if the compulsion is through social norms rather than government-imposed penalty, the harm is not imminent. You can tell the lower court does not want to address this, which is why they avoid the imminent harm analysis and jump right to constitutional rights analysis, although it then confuses the Commerce Clause limitation on federal power as creating an individual right. Duarte is a case involving assertions of a constitutional right.

  5. “…I found this argument persuasive, but ultimately, could not reconcile it with Chief Justice Roberts’s saving construction.”

    Well the now-settled law is that Justice Roberts is going to apply a savings analysis to this amendment too, and he’s going to save it. If y’all all thought he bent over backwards to save the previous law, what makes you think he won’t do so again?

  6. “Next year, the ACA will no longer satisfy the three guardrails.”

    Then why is it getting declared unconstitutional in 2018?

  7. “These lines of cases bolster the standing argument in Texas. Section 5000A(a) imposes a legal obligation on Nantz and Hurley by virtue of their income…”

    Yes, and if the first amendment guaranteed rights relating to income, this would be an interesting point. But it doesn’t, so why are you comparing it to Van Orden?

  8. “The same argument could have been made about Van Orden: he could have simply avoided the state Capitol…”

    Insisting that a plaintiff avoid the public property where one might, you know, petition the government for redress of grievances, is not the same thing as all as avoiding purchasing insurance from a private seller. There are no constitutional rights at issue here. But for Van Orden, you might as well say he could have avoided Fourth Amendment searches by never leaving his house.

  9. “Whether Nantz and Hurley ultimately succeed on the merits is separate from whether they have articulated enough facts at this juncture to identify an injury.”

    The problem is the result is the same whether they win or lose. They will not have to purchase insurance (but might still do so because of social norms). That’s true even with a Supreme Court order; the law doesn’t disappear, it remains on the books, and these morons feel compelled to follow laws on the books.

  10. We know how fucked up this is since the people who enacted the current law are celebrating its reversal on constitutional grounds, which means they knowingly and intentionally enacted a law that violated the Constitution, and consequently their oaths of office.

    1. I think this is a very interesting and amusing point, though on this occasion I think it fails to hit the target.

      The thesis is that members of Congress swear an oath that ” I will support the Constitution of the United States.” Consequently deliberately to enact an unconstitutional law is a violation of their oaths of office. (Strictly, legislating to eliminate a tax is not unconstituitonal per se, but we could certainly argue that legislating to eliminate a tax which has the (known) effect of making an existing constitutional statute unconstitutional is a violation.)

      The key point of principle, though, is that congressmen swear to support the Constitution of the United States, but this has to be understood as supporting the Constitution as they understand it not, if different, as somebody else (eg SCOTUS) understands it. Thus if a member of Congress honestly believes the Supreme Court wrongly ruled the ACA to be constitutional, ie if the member honestly believes that the ACA is already unconstitutional, voting for an amendment that removes the peg on which SCOTUS hung its erromeous argument for constutionality is not a violation of the member’s oath. It simply helps SCOTUS to correct its prior constitutional error.

      But good point.

  11. These lines of cases bolster the standing argument in Texas. Section 5000A(a) imposes a legal obligation on Nantz and Hurley by virtue of their income: they “shall” maintain insurance. Moreover, they are not subject to any exemptions under the law. That injury is just, if not more concrete than the sort of injury claimed in Van Orden and in the Equal Protection Context.

    I don’t understand what the injury is in the first place. Is it like the Van Orden injury? “Much like the plaintiff in Van Orden was offended by the state installing a Ten Commandments monument, we are offended by the federal government requiring us to purchase insurance”? If that’s the nature of the injury, it seems to me it’s much more likely the Roberts Court would resolve the case by overruling Van Orden‘s holding on standing and narrowing who’s allowed to sue.

    1. It’s much more likely that the Roberts Court will just reject the analogy. The plaintiff in that case was challenging a state action prohibited by the Constitution. It was an affirmative rights case.

      Recall also that Van Orden lost because he “apparently walked by the monument for a number of years before bringing this lawsuit.”

      1. Leans into the microphone: wrong.

        Van Orden lost because the monument was deemed a passive expression that is not wholly religious as “the Ten Commandments have an undeniable historical meaning…Simply having religious content or promoting a message consistent with a religious doctrine does not run afoul of the Establishment Clause.”

        In the last paragraph was the throwaway line about even the plaintiff seeming to treat it as a passive expression.

        1. “Van Orden lost because the monument was deemed a passive expression…”

          …because it did not confront elementary school students every day. The Court emphasized this distinction by pointing out that Van Orden was basically going to the nuisance. In Stone, attendance was mandatory.

          These are additional reasons why the analogy to Van Orden is stupid. A mandate with no penalty is at least as passive as the Ten Commandments on a statehouse lawn. (And the mandate isn’t really a mandate, since it only applies to people with income.)

    2. The injury in the present case is the demand that a person do something, purchase insurance, that they don’t want to do. It’s an infringement of liberty.

      As Blackman writes, the Supreme Court didn’t actually discuss standing in Van Orden. Blackman’s point is that there are other examples where a definite economic injury is incurred. We might consider the cost of insurance to be such an injury, which gets us to the “self-inflicted” part of the argument. Also, note that the Supreme Court held the monument constitutional in Van Orden.

      Imagine if Congress raises the mandate penalty from $0 to “shall be eaten alive by a Tyrannosaurus rex.” Should anyone have standing? Does the (current) impossibility of punishment mean a court can ignore it for the purpose of determining standing? I think not for the reason provided by Judge O’Connor and as written by Blackman above, “such an argument conflates the standing inquiry with the merits analysis.”

      1. “It’s an infringement of liberty.”

        In this case, a liberty that exists nowhere in the Constitution. SCOTUS has already said that Congress is constitutionally entitled to mandate that you purchase insurance and tax people who don’t do so. So there’s really no point talking about a liberty interest that is not recognized by the Constitution.

        “We might consider the cost of insurance…”

        If we are discussing costs that the plaintiff is not obligated to expend, why not include the cost of counseling for the emotional damage they suffer from violating the law?

        1. “In this case, a liberty that exists nowhere in the Constitution.”

          Have you read neither the Constitution nor the Supreme Court opinions in NFIB?

          The Constitution assigns powers to, and limitations on, government. The 9th and 10th Amendments make that extraordinarily clear: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” // “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

          In NFIB, SCOTUS held that the government can impose a tax related to possession of health insurance, insofar as it is not coercive, but the mandate was a nonstarter. Roberts addresses the liberty interest, limitation of the Commerce Clause. Ginsburg didn’t have the votes for the position you enunciate so I don’t know why you pretend that was the holding of the Court.

          Your insistence that the Court upheld the mandate bolsters O’Connor’s opinion. If the mandate were already held unconstitutional (but the tax okay) then the plaintiffs have no law to complain about. If, as you say, the mandate is still good law even though Roberts wrote all kinds of things about it being unconstitutional, then striking it down now is required under the terms of NFIB, as there is no tax.

          1. “Roberts addresses the liberty interest, limitation of the Commerce Clause.”

            You don’t have a constitutionally recognized liberty interest in not being taxed. The mandate was upheld by a majority of the Court.

            “…then striking it down now is required under the terms of NFIB, as there is no tax.”

            No it isn’t. Even if you assume it is no longer a tax, the very thing that made it unconstitutional under the commerce clause (the penalty) has also been removed. There’s no longer any constitutional objection to the non-mandate. The liberty interest you’re claiming no longer applies; if there is no requirement that you eat broccoli, why is anyone talking about your liberty interest in not eating broccoli?

      2. “Imagine if Congress raises the mandate penalty from $0 to “shall be eaten alive by a Tyrannosaurus rex.” Should anyone have standing?”

        Yes. That doesn’t have anything to do with what we’re talking about. The saving construction made it a tax. If the penalty is death, or eaten by a T-Rex, the Court would still be required to issue a saving construction reducing enforcement to a tax, and we get the same result. The problem here is that the court accepts that it is a tax, accepts that it has no teeth, and then invents a harm sufficient to pass Article III standing.

        1. Should the court determine the fair market value of being eaten alive by a Tyrannosaurus rex in order to determine the tax? Don’t be silly!

          Here, the court doesn’t accept the mandate is a tax, but rather that it isn’t! It is a standalone dictate that carries a moral force, as laws tend to do.

          1. “It is a standalone dictate that carries a moral force, as laws tend to do.”

            Ok, so let’s wager on what you think CJ Roberts will do with the argument that a non-mandate (1) inflicts an injury sufficient for Article III standing; and (2) violates the commerce clause?

        2. “…, the Court would still be required to issue a saving construction reducing enforcement to a tax…”

          That’s not true. Roberts explicitly said that if the penalty was so onerous that no reasonable person would choose to pay it rather than conform to whatever command the penalty was attached too, then the payment cannot any longer be construed as a tax. He cited “Bailey v Drexel” in support of that view.
          Bailey v. Drexel Furniture Co.

  12. I don’t see the argument, that making people feel subjectively uncomfortable that they haven’t fulfilled their social obligations is enough to create standing, carries any weight.

    What prevents people so inclined from simply mailing a check for $0 to the IRS? If they do that, I don’t see any argument that they haven’t done so concrete action in fulfillment of their obligation. And if the law permits them to do that, I don’t see that the first premise of the argument – that the law imposes a “mandate” with no way to fulfill it – is factually accurate even on its own terms, without even getting to whether this actually makes them feel bad, let alone whether this mood “injury” is sufficient to confer standing.

    But more fundamentally, courts have routinely tossed out all manner of unenforceable laws for lack of standing. This argument goes completely contrary to long-standing precedent.

    What next? The Jews sue the City of Rome over the destruction of the Temple because not having one around makes them feel really bad, they’d really like to fulfill their obligations and they can’t, so they have to go around fasting and stuff? Where does this end?

  13. Note: If Rome raises any statute of limitations defense, under this argument the Jews could claim they have a current, ongoing injury, not a past one. Creative lawyering could convert any past injury into a present one. (“We feel obligated to wish him Happy Birthday in person and now we can’t, so we feel bad and have a current injury.”) No statute of repose could survive if this argument holds water.

  14. And THIS is the sort of reasoning that is supposed to be a substitute for democracy??

    Democracy is to be overturned because certain “virtuous” individuals are “bothered” by “mandates” that have absolutely no effect on their lives?


    1. We’re not supposed to be a democracy. The founders never intended for the takers to vote. If only land owning men had voted, Obamacare would not have been passed.

      1. Your attempt at trolling is a failure.

  15. The problem with standing is not with the plaintiffs, but with the defendant. If “United States” means the legislative branch of the United States, then doesn’t it have legislative immunity? And if it means the “executive branch” (as, I think, Section 702 of the APA is understood), how has the executive branch caused an injury to the plaintiffs, and what will a declaratory judgment require the *defendant* to do that will remedy that injury? Why wouldn’t the Fifth Circuit follow its decision in Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) (en banc), holding that the plaintiffs could not sue the Governor and Attorney General of Louisiana over an abortion law because those defendants did not enforce the law. Here, *no one* is enforcing the law. And you can’t sue “social norms.”

    And for those who think that the decision will be stayed pending appeal, what rule exactly provides for a stay of a declaratory judgment? See Yankton Sioux Tribe v. Southern Missouri Waste Management Dist., 926 F. Supp. 888, 890 (D.S.D. 1996) (neither Rule 62(c) nor Rule 62(d) authorizes a stay of a non-monetary declaratory judgment). What does the “United States” have to do in response to this order that a “stay” would be necessary to defer it from doing that act?

    1. “If “United States” means the legislative branch of the United States, then doesn’t it have legislative immunity?”

      No. Why would it? The argument (even though it’s wrong) is that the legislature has enacted a law it can’t legislate. If it was immune on the basis of legislative immunity, how would it ever lose?

      “…holding that the plaintiffs could not sue the Governor and Attorney General of Louisiana…”

      I suspect it is because since the 11A only permits dec actions against individual governmental agents, there’s no ultra vires allegations to make against people who aren’t enforcing unconstitutional laws. But in suits against the US, you don’t need to allege ultra vires acts, because the 11A doesn’t apply to the feds. Just a guess. Article III Section 2 contemplates lawsuits “to which the United States shall be a party”.

      1. If plaintiffs sue the legislature instead of the units enforcing the law, they do lose. EEOC v. Illinois, 69 F.3d 167, 170 (7th Cir. 1995) (quoting Quinones v. City of Evanston, 58 F.3d 275, 277 (7th Cir. 1995)) (persons aggrieved by a legal rule do not sue the rule maker, like Congress or the state, but those whose acts hurt them).

        Okpalobi held that the plaintiffs did not have standing because they could not trace their injury to any executive actions (or threatened actions) of the Governor and Attorney General. You are correct that the 11th Amendment also applied there, but that standing rule applies to any defendant. Art. III sect. 2 still requires that the lawsuit be a “case or controversy” (the phrase in which standing is incorporated) regardless of whether it meets the other requirements therein (diversity, federal question, U.S. party).

  16. I should add that Judge O’Connor is exactly the type of judge we need on the right’s side. A counterpart to a Jack Weinstein type.

    1. Soon we will all be under the Constitution according to Bob, right or wrong!

      1. It would be a vast improvement for liberty but alas.

        1. Just wait until you get the Sarcastitution. Operational liberty whether you like it or not!

  17. I have seen few things as utterly ludicrous as the arguments in defense of O’Connor’s decision. I suppose that law professors like Blackman find it an amusing game to try to explain why a “mandate” with no penalty for non-compliance is somehow a burden on anyone, and why precisely the absence of a penalty makes the rest of the statute unconstitutional.

    But it’s all from Fantasyland, and makes not an iota of sense.

    1. Well, we’ve got this law that’s grossly unconstitutional for a host of reasons the Court no longer cares about; Lack of any relevant enumerated power, a revenue bill that originated in the Senate, stuff like that. So you really want it gone, and if an excuse to be rid of it comes along, you might not care that the excuse is BS.

      Kind of like making your peace with “substantive due process” to get rid of Jim Crow, because you know the Court is never going to revive the P&I clause. Even though you know substantive due process is a steaming heap.

      And, besides, if you can just get the Court to look at it again, maybe lightning will strike, and they’ll decide for once that the legitimate reasons it’s unconstitutional matter again.

      1. FYI, you are straight up arguing the ends justify the means, here. I mean, usually you guys prefer something more of a fig leaf, but here you’re just out in the breeze.

        Reminds me of that quote about giving the Devil the benefit of the law.
        Roper: So now you’d give the Devil benefit of law!
        More: Yes. What would you do? Cut a great road through the law to get after the Devil?
        Roper: I’d cut down every law in England to do that!
        More: Oh? And when the last law was down, and the Devil turned round on you ? where would you hide, Roper, the laws all being flat? This country’s planted thick with laws from coast to coast ? man’s laws, not God’s ? and if you cut them down ? and you’re just the man to do it ? d’you really think you could stand upright in the winds that would blow then? Yes, I’d give the Devil benefit of law, for my own safety’s sake.

        1. you are straight up arguing the ends justify the means

          I think he is arguing that the laws are already flat. More has no advice for us in that situation, other than that it was a mistake to flatten them.

          1. For the laws being already flat, he sure seems enthusiastic about ignoring whatever remains to get his preferred outcome.

        2. I don’t see why, in a world where arguments that are steaming heaps expand the power of government, and you’ve even got a whole school of constitutional “interpretation” dedicated to steaming heaps, those of us who want it reduced again are somehow obliged to stick to good arguments.

          It’s like demanding that somebody observe the Marquess of Queensberry rules after you’ve kicked them in the balls.

          Do I like it? No, I’d rather that everybody be playing by the rules.

          1. What you want, Brett, is for everybody to play by the rules as you interpret them.

            I know it strikes you as impossible, but not everyone agrees with your interpretations, Further, those who disagree do so in good faith, not because they are part of some conspiracy to undermine the country.

            If you refuse to understand that then there is no point to anyone discussing any of this with you.

            1. I think the problem here is something that YOU don’t understand.

              Once somebody, for what they view as good reasons, arrives at an understanding of an issue, they can only proceed on the assumption that they are right, and that people who disagree with them are wrong. Because that’s what the evidence and arguments they’ve encountered have brought them to believe.

              Does this mean they ARE right? No, of course not, people are fallible, subject to error, and even as you believe yourself to be right, you should retain an awareness that you may, nonetheless, be wrong.

              But the only alternative to proceeding on the basis of what you believe to be right, is to proceed on the basis of what you believe to be wrong. And why in hell would you do that?

              When I say I want everybody to play by the rules, OF COURSE I mean as I interpret them. What would I mean, as somebody who disagrees with me interprets them?

              What a nonsensical complaint you’re making!

              1. Brett, there is another alternative.

                Article III of the very same document you claim to be interpreting grants the judicial power to judges who sit on one Supreme Court and such lower courts as Congress has seen fit to create.

                So those judges get to make these calls, and the rest of us should obey their rulings and use them as authoritative guidance as to the meaning of the Constitution, unless and until we can get them overturned according to established rules.

                The problem, fundamentally, is a lot of people don’t accept that the courts get to decide these things and we generally don’t. But that flows directly from the text of the Constitution.

                1. I don’t think this is right at all. The judicial power is confined to deciding cases and controversies. That means that once the judiciary decides a case which sets a clear precedent, the executive power (and the States) are bound to follow that precedent.

                  But members of the legislative power – whose members swear to “support the Constitution” would be forsworn if they supported the Constitution as pronounced by the Supreme Court, against the Constitution understood by each member himself. Consequently a member of Congress who votes for laws that the Supreme Court says are unconstitutional, so long as he honestly believes they are consttutional, neither breaks his oath, nor interferes with the judicial power to decide cases and controversies.

                  1. Wrong wrong wrong.

                    For instance, the Supreme Court has held flag burning is constitutionally protected. That’s settled law. If a member of Congress brings up a ban of flag burning to the House floor and votes for it, she is violating her Oath. She doesn’t have any “concurrent power” to interpret the Constitution–her view of what the Constitution “really” protects is no more valid than mine.

                    Indeed, I actually go father than that. There is no such thing as what the Constitution “really” protects. There are only opinions. And one type of opinion- the opinion of an Article III judge on a matter within his jurisdiction–counts more than any other. The opinion of Supreme Court justices count most of all, of course.

                    Where there are not controlling precedents, then there are a few other voices– OLC opinions, administrative agency interpretations, etc.– that also count.

                    But someone’s opinion of what the text “means”? That’s irrelevant. I mean completely irrelevant. Under Article III, the Constitution “means” what authority figures say it means.

                    And that’s the problem of especially folks like Brett on the right (though the left does this too sometimes). Article III says the courts determine the meaning, the courts have determined it, and that’s that. His opinions on the matter are worthless. They literally have nothing to do about constitutional interpretation. What lawyers and judges do is start with the controlling court precedents and go from there. That’s all that matters.

                    1. For instance, the Supreme Court has held flag burning is constitutionally protected. That’s settled law. If a member of Congress brings up a ban of flag burning to the House floor and votes for it, she is violating her Oath

                      We’ll have to agree to differ. The courts simply determine the results of cases and controversies, they do not determine the meaning of an oath. An oath is a matter for each person’s conscience, it’s not a case or controversy.

                      Also at a purely practical level, your argument is nuts. Congress passes a law to, say, intern Mexican civilians during a war with Mexico, SCOTUS determines that that is unconstitutional. Fifty years go by and everyone, incuding all the current members of the Supreme Court, privately believes that the Mexican internment case was wrongy decided and that actually the constitution allows the internment of enemy aliens in time of war. Even on the Volokh Conspiracy, Brett and Bob from Ohio agree with sarcastro and bernard.

                      But no one can introduce a bill to that effect, allowing the current SCOTUS to reconsider what SCOTUS said 50 years ago. We have to go full constittuional amendment. Nutso.

                    2. I’m gonna go halvsies on this one. There is no oath violation if there is a good faith belief the bill will move the Court (or that the Court has already moved).

                      If the bill exists just to gain political plaudits and then be struck down by the Court, or if the Member argues the Executive should move despite the Court, those are Oath-breakin’.

              2. people are fallible, subject to error, and even as you believe yourself to be right, you should retain an awareness that you may, nonetheless, be wrong.

                Well, I see no such awareness in your comments. Your standard response to judicial decisions you disagree with is to allege giant conspiracies to subvert the country. You are not willing to acknowledge that, “Gee, maybe I’m missing something.” You are not even willing to acknowledge the possibility of honest error. It’s all “march through the institutions” and raving conspiracy theories and whatnot.

                These are your excuses for saying that it’s OK that a judge made a decision that is, by your own admission, BS, because you like it. This sort of thing is a constant refrain from you. It’s what got you barred from Kleiman’s site.

                1. “Your standard response to judicial decisions you disagree with is to allege giant conspiracies to subvert the country.”

                  That’s because I read law blogs. Living constitutionalism IS a giant conspiracy to subvert the country, it barely even bothers pretending otherwise.

  18. Obama will never be able to force me to go on a date with another man! I thought liberals believed people were “born” with their sexuality…I was born a heterosexual! And how does an individual go on a date with another man anyway?? The whole thing makes no sense and O’Connor is a red blooded American heterosexual hero!

  19. If you can not purchase insurance and still be in full compliance with the ACA, as CJ Roberts ruled in NFIB, then there is no mandate. Professor Blackman’s weak argument on this point is entirely unconvincing. He claims CJ Roberts rejected this argument, and then quotes the part of the decision where Roberts explicitly states that not buying insurance need not be read as being unlawful.

  20. To me, if the TCJA causes another (unrelated) law to become unconstitutional due to the way it change it, then the TCJA should be ruled unconstitutional. The TCJA was also passed under budget reconciliation. How can a law with a 51-vote threshold change a law passed by a 60-vote threshold (with no rules changes)? (I’ll leave the fact that it was passed under budget reconciliation despite not meeting the requirements, and therefore the TCJA should be thrown out anyway for another day.) I just don’t understand how you can say, “Law A caused Law B to be unconstitutional. Therefore Law B is unconstitutional.” and not “Therefore, Law A is unconstitutional.” Congress had tried and failed to “repeal and replace” Obamacare just prior to (barely) passed the TCJA. This is a weaponizing of the courts (judicial activism, legislating from the bench) to do what the legislature was unable to do, due to both incompetence and the lack of a mandate. I thought that conservatives were opposed to this very thing!

    1. I thought that conservatives were opposed to this very thing!

      If liberals want to unapologetically practice it, why can’t conservatives?

      1. Because it supposedly is like the worst thing ever, and they convinced people to vote for them based on the fact that they will not participate in such shenanigans!

        Of course, the Supreme Court has been Republican-nominee-majority since 1969, and the “liberal activists” were Republican appointees, and really only were activists on the Roe and Casey decisions (of which Republican appointees made up the majority of the majority).

    2. Not even close to analogous. The Constitution only requires a majority. A majority approved the law, after reconciliation. To the extent that the Senate imposes an additional hurdle, it doesn’t change the fact that a majority approved the law, as reconciled.

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