Constitutional questions regarding the Senate health care reform bill

Look, I'm as progressive as they come. I want national health insurance as much as anyone. But it seems to me that the Senate health care reform bill, as it currently stands, may be unconstitutional.

As I understand it:

The Constitution gives Congress the power to tax.

The Constitution gives Congress the power to provide services with said tax money.

But the Constitution does NOT give Congress the power to require that I purchase a product or service from a private corporation as a condition of citizenship.

Let me give an example that might illustrate what I'm talking about:

Suppose that the best scientific research had shown that running makes people healthier (it does).

And suppose that New Balance Shoes was the last American shoemaker remaining and that it had fallen on hard times (it is and it has).

Now suppose that in order to save New Balance Shoe Corporation, Congress passed a law saying that all American citizens must purchase a pair of New Balance Shoes every year or face a penalty. That would clearly be unconstitutional, correct?

Isn't that what the Senate health care reform bill actually does? Absent a public option or Medicare for All, the Senate health care bill doesn't provide services. Rather it mandates that every American must buy a service from a private corporation as a condition of citizenship. I don't see how that passes Constitutional muster.

Now of course the obvious reply is to point to car insurance. Every state requires that those who own a car have valid car insurance from a private corporation. And it seems to work out fine for everyone (with some grumbling and subsequent reforms in the system from time to time). But the important difference between health insurance and car insurance is that car insurance is a condition of owning a car -- not citizenship. I can always opt out of car insurance by taking the bus or walking or riding my bike or staying home.

I imagine the other potential variation of disagreement might be to argue that Congress subcontracts with private corporations to provide services all the time -- so what's so different about providing health insurance through a private subcontractor? The difference as I see it is that in the case of using a private corporation to build a road for example -- the private corporation is always the SUBcontractor. Even in that case, the ultimate responsibility for the work still resides with the government who is paying for the product or service. But that's not how the Senate health care bill works, does it? The Senate health care bill says I must purchase a service from a private corporation (which is then free to pocket 30% of that money as profit). Government may provide a subsidy to me to help me to buy that private service, but the contractual relationship is between me and the private insurer, not me and the government.

The rules for citizenship are pretty clearly laid out in the Constitution. And if Congress wants to amend the rules for citizenship to require private health insurance as a condition of citizenship, that's fine, but they would have to amend the Constitution in order to do it.

If Congress provided a universal public option or Medicare for All, then all of these Constitutional questions go away. But in the absence of a universal public option or Medicare for All, I don't see how the Senate health care bill is Constitutional.

(Hat tip to emptywheel at FDL for providing the inspiration for this post.)

Update #1: Well knock me over with a feather! Senator Orrin Hatch (R-UT) has an editorial in the Wall Street Journal that argues that the individual mandate is unconstitutional. Of course Senator Hatch is making the argument in the attempt to block any expansion of coverage. By contrast, I'm saying that the individual (private health insurance) mandate is unconstitutional and THEREFORE the only way to constitutionally expand coverage is through a universal government run plan like Medicare for All (see the comment below from "Bob the Health and Health Care Advocate" along these lines). I gotta admit, I'm extremely uncomfortable making a argument that is similar to the one made by Orrin Hatch -- because that dude is wrong about almost everything.

mcjoan over at DailyKos cites Jack Balkin who slaps down the unconstitutionality argument. He writes:

The individual mandate is structured as a tax. And the tax is perfectly constitutional under Congress's powers to tax and spend for the general welfare.

That doesn't seem very reassuring to me. If indeed the individual mandate is structured as a tax then it would seem that Congress is authorizing the IRS to collect taxes from citizens on behalf of a private corporation -- which raises even more constitutional questions. On the other hand, it really is the perfect metaphor for the sorry state of the U.S. Congress at this point -- a public body working on behalf of the interests of its corporate bosses.

Said differently, Congress could create a mandate whereby all citizens are required to buy Miley Cyrus CDs. And presumably Congress could "structure that as a tax." But I don't see how that would be constitutional. Same problem with private health insurance. Congress doesn't decide what is or is not constitutional, the courts decide that.

Update #2: Many commentators have credited President Obama with practicing "the art of the possible." The notion is that President Obama figures out the limits of what Congress can hope to pass and never asks for anything beyond those limits. Never mind that "the art of the possible" is the exact opposite of what candidate Obama ran on. What "the art of the possible" argument overlooks is that what is possible to get through Congress may not be possible on the ground as policy.

Here's the thing:

Lots of people hate the U.S. Postal Service -- and yet the U.S. Postal Service is amazing! The U.S. Postal Service will deliver a letter door-to-door anywhere in the U.S. in about three days for less than the cost of a tip at Starbucks or chump change thrown in the case of a street musician. And yet many people rail against the USPS, incensed by the high cost of a 43 cent stamp!!!

Now imagine if instead of a 43 CENT stamp and wonderful service, if the Congress sends the IRS to collect THOUSANDS OF DOLLARS from citizens on behalf of Aetna -- even though Aetna is still allowed to deny claims and cap lifetime payments.

Good luck with that.

Many commentators (and policymakers too) have been so busy trying to read the mind of Joe Lieberman to figure out what he would tolerate, that it seems that they never bothered to ask what the average citizen would be willing to tolerate.

Getting thrown under the bus by a really nice guy

Okay I really want to break this down because I think it's an important case study in how our political system really works.

1. By all accounts Barack Obama is a decent guy. Smart, caring, compassionate, well-organized, able to hold a range of opposing views. Obama is exactly the kind of guy one would want as President.

2. The evidence suggests that Barack Obama is about to completely throw the American people under the bus by abandoning the public option in the health care bill (if he hasn't bargained it away already). To abandon the public option is a violation of everything he stands for. It would break a campaign pledge. It would abandon the most cherished Democratic Party goal of the last 50 years at precisely the time when it has the best chance of being enacted. And it's completely irrational -- it is impossible to hold down health care costs without a Medicare for All type public option. Most importantly perhaps, it represents a moral failing to protect the most vulnerable in our country from needless suffering and death (as Peter Singer argues, 'If it is within your power to save a life, you also have a moral obligation to do so.')

It would be easy then to collapse this situation down into one pole or the other. Either:

1. 'Obama really is a great guy and we just don't understand the complexities of passing a bill'; OR
   
2. 'Obama is a liar who always intended to sell us out.'

But let's walk through the implications of the health care bill for a second.

One of the fascinating things about the health care bill is how often members of Congress admit openly that if a real public option was attached to the bill, that it would lower costs too much and be the end of private insurance in this country. And they say that like it's a bad thing. At first the notion that private insurers would go out of business seems silly. As Obama argued in his last press conference:

Why would it drive private insurance out of business? If private insurers say that the marketplace provides the best quality health care; if they tell us that they're offering a good deal, then why is it that the government, which they say can't run anything, suddenly is going to drive them out of business? That's not logical ....

But then, you start to look at the numbers as I did in my last post. Private health insurers make about 30% profit for holding your money in reserve until it is needed to pay for medical bills. As David Waldman pointed out: "Insurers don't provide care. They just finance it. Why are we supposed to be happy paying 30 points on that deal (to private insurers) when Medicare takes just 4?"

And then it all makes sense.

If there were a real public option, private insurers, over time, indeed would go out of business.

I happen to think that's a good thing, a really good thing.

Private insurers provide nothing of value. They don't have the leverage or negotiating power that a Medicare for All government type program would have. And their accountants don't actually look for efficiencies, they just look for technicalities to fuck you so that they can profit from your pain. And for all of that, they pocket 30 cents on the dollar versus the 4 cents on the dollar that Medicare charges for administrative overhead. Private insurance then is a pure mafia-style racket to take money from people in return for "protection services" that are never really provided (or rather the financial services that they provide are marked up an exorbitant 30% over their actual costs).

So if there were real competition, people would naturally chose the fairer program with the larger negotiating power and 4% overhead over the more expensive, less efficient, private plan. Medicare For All would in fact become Medicare for all, a de facto universal health plan just on the basis of the fact that it is A BETTER PRODUCT AT A LOWER COST than the private plans.

Which brings us back to Obama. As Obama himself has argued, the only way to insure competition and lower cost is through a public option. So if it's logical, if it is indeed in the public interest, then why is Obama about to walk away from it?

Because private health insurance is a trillion dollar a year industry (that's trillion with a T). And Obama doesn't have the stomach to take out a trillion dollar a year industry. He just doesn't have it in him. Mr. Consensus is no Huey Long.

So it is true, logical, and rational to argue that a public option was the best way to control costs (which is what Obama did during the campaign). But it is also true that a trillion dollar a year mafia racket can hire a lot of lobbyists and buy a lot of TV time during elections (and everybody in D.C. knows it). Indeed private insurers will spend every last penny they have stolen from us to protect their profitable scheme.

Obama the post modernist wants to have it both ways -- a public option for the American people while preserving the jobs (and profits) of private insurers. The problem is, health care is largely a zero sum game -- what's good for the American people is bad for private insurers and vice-versa. And in trying to have it both ways, Obama's message comes out as convoluted, confused, and lacking in moral authority (because it is).

Do 100% of private insurers' profits come from denial of claims?

By most accounts, private health insurers make about 30% profit for holding your money in reserve until it is needed to pay for medical bills. As David Waldman (KagroX at Daily Kos) so aptly tweeted:

Insurers don't provide care. They just finance it. Why are we supposed to be happy paying 30 points on that deal (to private insurers) when Medicare takes just 4?

But now a report out of the California Attorney General's office shows that:

PacifiCare denied 39.6% of claims this year, Cigna 32.7%, Health Net 30%, Kaiser Permanente 28.3% and Blue Cross 27.9%.

Holy shit. Can those 2 sets of numbers be put together?

Namely, if private insurers are making roughly 30% profit, and those same private insurers are denying 30% of all claims, then is it the case that 100% of private insurers profits come from denying claims to sick people?

I can see a situation in which those two number would not be put together -- namely what if those 30% of claims that are denied represented only say, 15% of the costs facing Health Net in a given year? But isn't it likely that the opposite is in fact true -- namely that private health insurers are likely to deny THE MOST EXPENSIVE claims -- in which case the private insurers would be insolvent if not for profiting off of the pain of others (whose claims they deny).

For their brilliant post highlighting the CA Attorney General's health care Report, Corrente has now being added to my blog roll.

Rocket science

No public option = one term President

Why? Because Obama promised universal coverage during the campaign and we in turn gave him $500 million in campaign contributions, 13 million volunteers, 60 Democratic Senators, and 256 Democratic House members. In politics that's as close as you're ever gonna get to a royal flush and if you can't win the hand with a royal flush -- if you can't win on the signature Democratic initiative that has defined the party for the last 50 years -- then go back to writing uplifting autobiographies and we'll find another candidate.

The problem with TARP, the reason people hate that bill and the reason it's a huge anchor dragging this administration down -- is that it is a bailout of Wall Street NOT a bailout of the American people.

And the problem with the health care bill as it's being written by Rahm and fucking Olympia Snowe is that it is becoming a bailout of the insurance and pharmaceutical companies -- not a universal health care plan for the American people (which is what we were promised).

Look if Obama truly believes that "What's good for Wall Street is good for the American people (TM)" -- if that's his governing philosophy -- great. But that's not what he said during the campaign. And right now Hope and Change and Yes We Can and Bipartisanship (TM) is being used to sell us on bailouts for billion dollar companies rather than services for the American people.

The fact that Obama seems willing to bet the farm on triggers -- the fact that he is willing to bet his entire presidency on giving the private health insurance industry one more try! -- is lunacy. 81% of Democrats want a public option. You fuck 81% of your base it's gonna be awfully difficult to get re-elected.

Update #1: I think this post from Firedoglake is the most damning post about the behind the scenes horse trading (selling out) going on in Congress and at the White House.

Update #2: The borough of Brooklyn has almost TWICE the population as the STATE of Maine. So why is Olympia Snowe writing the health care bill again? Maybe we should just let some Brooklyn Borough President write the health care bill since after all, he represents more people.