Law in Plain English: Armstrong v. Exceptional Child Center, Inc.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Armstrong v. Exceptional Child Center, Inc.

Argument: Jan 20 2015 (Aud.)

Background: Section 30(A) of the Medicaid Act requires that state Medicaid plans contain procedures to ensure that reimbursement rates for healthcare providers “are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers” to meet the need for care and services in the geographic area. The Ninth Circuit has interpreted Section 30(A) to require that reimbursement rates bear a reasonable relationship to provider costs. Where rates fail to “substantially reimburse providers their costs,” there must be some justification other than “purely budgetary reasons.”  Richard Armstrong, the Director of Idaho's Department of Health and Welfare, conducted yearly cost studies between 2006 and 2009, developed a new rate setting methodology, and recommended substantial increases in reimbursement rates for supported living services based on the cost study results; but did not implement the proposed rate changes because the Idaho legislature did not appropriate the necessary funds. The district court ruled in favor of the Medicaid providers, and the Ninth Circuit affirmed.

Issue: The question before the Court is whether the Supremacy Clause gives Medicaid providers a private right of action to enforce 42 U.S.C. § 1396a(a)(30)(A) against a state where Congress chose not to create enforceable rights under that statute.

Holding: In a 5-4 decision, the Supreme Court ruled that the Supremacy Clause does not confer a private right of action, and that Medicaid providers cannot sue for an injunction requiring compliance with § 30(A). The Court reasoned that the Supremacy Clause instructs courts to give federal law priority when state and federal law clash, but that it is not the source of any federal rights.

A few thoughts on Hobby Lobby and for-profit corporations

One of the most interesting distinctions, and perhaps the most crucial distinction, in the Obamacare contraceptive mandate cases is not whether corporations can "practice" religion, but the differences between a non-profit corporation and a for-profit corporation.* Many opponents of the decision have argued that a corporation cannot practice religion. But this ignores a long-standing understanding of the Religious Freedom Restoration Act. Under RFRA, no one (not even the dissenters on the Supreme Court) questions that a non-profit corporation like a church can practice religion. Non-profit corporations are unambiguously covered by RFRA and the Free Exercise Clause. For if RFRA does not cover a church, then what is it good for?

(Nor is RFRA part of some ridiculous notion of a "war on women" by Republicans: The Religious Freedom Restoration Act was introduced in the House by then-Representative Chuck Schumer (D-NY) and 169 other co-sponsors, and passed by a voice vote. It passed the Senate by 97-3. President Clinton signed it into law. It was backed by the New York Times. It was primarily designed to protect Native American religions from the federal government.)

Rather, you must be able to make a principled distinction as to why a non-profit corporation like a church can practice religion, but that a for-profit corporation like Hobby Lobby or Conestoga Wood Specialties or Mardel cannot. In my opinion, the dissent tries but fails to do this in a convincing way. The Dictionary Act, a federal law codified at 1 U.S.C. § 1, states that

In determining the meaning of any Act of Congress, unless the context indicates otherwise—

...

the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals....

(Yes, you read that right: since 1947, federal law says that anytime another law refers to "person" it includes corporations).

The dissent argues that "the context indicates otherwise," but this is not convincing. The only defining difference is profit, but "that dog don't hunt." Making profit is not mutually exclusive with practicing religion.   It is not, as the dissent suggests, that "religious exemptions had never been extended to any entity operating in 'the commercial, profit-making world,'" but rather that RFRA, when combined with the Dictionary Act, makes no such distinction. The dissent, in my opinion, must do better than this.

Good and smart people can disagree about the scope of RFRA, as evidenced by the 5-4 vote in this case. But when you try to argue that corporations cannot practice religion, without understanding that non-profit corporations are already unambiguously protected in this regard, you start to look foolish. To start to convince me, find a principled distinction between a non-profit corporation and a for-profit corporation that goes beyond the profit motive.

* A reminder: It is important to note the distinction that the holding in this case does not apply to all corporations, just those that are defined as closely-held. The IRS defines a closely-held corporation as one in which more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and is not a personal service corporation.

Law in Plain English: Obamacare contraceptive mandate cases

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Burwell v. Hobby Lobby Stores, Inc. (consolidated with Conestoga Wood Specialties Corp. v. Burwell)

Argument: Mar 25 2014 (Aud.)

Discussion: Hobby Lobby and Mardel (a craft store chain and a Christian bookstore chain, respectively) and Conestoga Wood Specialties (a manufacturer of wood cabinets) brought actions challenging an Affordable Care Act regulation that requires them to provide certain contraceptive services as a part of their employer-sponsored health care plan. Among these services are drugs and devices that the employers believe to be abortifacients, the use of which is contrary to their faith. The employers grounded their claims in the Free Exercise Clause of the First Amendment, and the Religious Freedom Restoration Act (RFRA), a federal law aimed at preventing laws that substantially burden a person's free exercise of their religion. The Tenth Circuit ruled that Hobby Lobby and Mardel were "Persons Exercising Religion" Under RFRA, and thus entitled to bring their claims. On the other hand, the Third Circuit ruled that for-profit, secular corporations like Conestoga Wood Specialties could not engage in religious exercise, and as a result, were not entitled to protection under the Free Exercise Clause of the First Amendment and the RFRA.

Issue: The question before the Court in Hobby Lobby is whether the Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. §§ 2000bb et seq., which provides that the government “shall not substantially burden a person’s exercise of religion” unless that burden is the least restrictive means to further a compelling governmental interest, allows a for-profit corporation to deny its employees the health coverage of contraceptives to which the employees are otherwise entitled by federal law, based on the religious objections of the corporation’s owners.

The question before the Court in Conestoga Wood Specialties is whether the religious owners of a family business, or their closely held, for-profit corporation, have free exercise rights that are violated by the application of the contraceptive-coverage mandate of the Affordable Care Act.

Holding: In a 5-4 decision, the Supreme Court ruled that, as applied to closely held corporations, the HHS regulations implementing the contraception mandate violate the RFRA. It is important to note the distinction that the holding in this case does not apply to all corporations, just those that are defined as closely-held. The IRS defines a closely-held corporation as one in which more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and is not a personal service corporation.

What was true in 2008 is the "Lie of the Year" in 2013

These screen captures are worth putting next to one another, so take a look at both. What PolitiFact in 2008 rated as "true" has now become the "Lie of the Year." Oh, and the "Lie of the Year" makes no reference to the previous "truth."

Obamacare is headed back to the Supreme Court--and here's why it's a big deal

UPDATE: My case page is here.

As I noted the other day, the the Supreme Court granted cert in two cases (Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius) challenging the Obamacare contraceptive mandate.

The Affordable Care Act contains a regulation that requires employers to provide certain contraceptive services as a part of their employer-sponsored health care plan. To be clear, these employers are not challenging the provision of all contraceptives--just some of them. Among these contraceptive services in question are drugs and devices that the plaintiffs believe to be abortifacients, the use of which is contrary to their faith.

It is true that, as a practical matter, these cases will not likely have a huge impact on Obamacare itself--at stake is one small provision of the law, not the individual mandate at the center of NFIB v. Sebelius. Rather, what makes these cases a big deal is nexus of Obamacare and Citizens United, the case in which the Supreme Court held that the First Amendment prohibits the government from restricting political independent expenditures by corporations, associations, or labor unions. While corporations have had some personhood rights at early as the 19th century, the public perception of corporate personhood rights is strongly tied to the unpopular Citizens United decision. Furthermore, the Supreme Court is poised to expand Citizens United when it rules in McCutcheon v. FEC.

As a result, the combination of an unpopular Citizens United decision (potentially expanded by McCutcheon) with the controversial Obamacare contraceptive mandate is a high profile mix of politics and religion--sure to be a big deal when the decision comes down (quite possible a 5-4 decision the last week of June).

Welcome to Maryland Health Connection! (Good luck signing up)

Welcome to Maryland Health Connection! For most of the first day, the site was unavailable:

Later, the site itself was reachable, but timed out after 2+ minutes of waiting trying to reload the signup page:

Then I waited five more minutes for this:

And seven minutes for this:

Tonight, I finally made it back to the login page, but the option to create a new user account (which was on the right side of this screen) has disappeared. So if you haven't already signed up (which was previously impossible due to the timeouts noted above), tough luck.

I clicked on "Forgot Your User Name?" to see what would happen. Predictable at this point:

Update: the "Create Account" option is back this morning!

Nevertheless, the page is still very slow to load (3+ minutes so far)...

I did it! After 48 hours, I was finally able to create an account. Then I logged in and navigated to the place where I could browse the various plan options. Except there aren't any:

There is no context on this page. I tried to reload it, and....it logged me out back to this screen:

I suppose I'll try again later...

The cost of Obamacare: 660% increase

...if you're a student at the University of the District of Columbia.

The cost for mandatory health insurance for the 2012-13 academic year was $149 per year (according to this page, which hasn't yet been updated as of September 20th). This year:

$149 to $1,133 represents a 660% increase in the cost of health insurance, which is mandatory for all students.

To be clear, the University itself specifically indicated in an email that Obamacare's increased coverage requirements ("a minimum benefit of at least $100,000 per policy year, have no limits on benefits deemed essential by the Act, and provide a preventive care benefit with no deductible, co-pays or co-insurance") was the cause:

Due to changes in federal law (popularly known as Obamacare), the cost of coverage has increased significantly for the coming academic year.  

Students may waive the university-sponsored plan by providing proof of comparable coverage.  If you don't have coverage through your employer or other means, tough luck.

In a particularly sweet bit of irony, the image above was provided to me by a student who got a refund from the school, only after the school originally found his government-provided insurance to be insufficient.

Health care ruling

The text of the decision is available here:
Health Care Ruling by Judge Vinson

Judge rules healthcare reform unconstitutional

From Reuters:

A judge in Florida on Monday became the second judge to declare President Barack Obama's healthcare reform law unconstitutional, in the biggest legal challenge yet to federal authority to enact the law.

U.S. District Judge Roger Vinson, appointed to the bench by President Ronald Reagan in 1983, ruled that the reform law's so-called "individual mandate" went too far in requiring that Americans start buying health insurance in 2014 or pay a penalty.

"Because the individual mandate is unconstitutional and not severable, the entire act must be declared void. This has been a difficult decision to reach, and I am aware that it will have indeterminable implications," Vinson wrote.

This case was #2 on my "top ten" predictions for 2011.  From my perspective, it was entirely likely to happen.  This now makes two judges to find the individual mandate unconstitutional, although Judge Vinson was the first to find the entire act unconstitutional.

The text of the decision is currently available via PACER, which unfortunately costs $0.08 per electronic page (seriously).  As soon as I find a free version, I'll post it on the blog.

Health care reform law declared unconstitutional

Virginia v. Sebelius

Uh, what?!

A very good friend of mine from high school (who is on the completely opposite side of the political spectrum) was looking at my LinkedIn profile and was astonished (tounge in cheek, I hope) to see that:

Ha! Of course I knew what it meant (and I assume he did too), but it did look a little weird.

He sent me the following email:

Subject: Did I Just Read That?

"Michael Schearer recommends Socialism" - taken from LinkedIn

This is not only the quote of the day, but perhaps the decade. I'm glad to see the leadership that our president demonstrated in passing landmark healthcare reform finally helped you to realize the responsibility we all share in making our world a safe, healthly, and prosperous place to live for all.

My response, of course, was two-fold: (1) to refer him to my previous post on health care insurance premiums; and (2) to recommend to him the fascinating Socialism by none other than Ludwig von Mises (of course, the source of the image above from my LinkedIn Reading List!).

Will health care insurance premiums go down even by one cent?

Then-Senator Obama made the reduction of health care insurance premiums a fixture of his campaign. On dozens of occasions he repeated his pledge that his health care plan would reduce premiums:

Under the plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year.

Let me begin, right off the bat, by making a number of concessions:

• I fully recognize that political candidates of all shapes and colors and parties regularly over-promise during a campaign. So I understand that this number is all good and well, but no one is ever going to see that sort of reduction, and per year?! That's just laughable. So I'm looking for some reduction in my premiums. Any reduction at all.
• Now I will also give President Obama an additional benefit of the doubt and say that he is talking about the full premiums, not just the employee-paid portion. So for example, while I pay about $370/month for my Aetna health care coverage, this only represents 30% of the actual cost (the remaining 70% is paid for by my employer). So the true monthly costs are in excess of $1,200/month or nearly $15,000 for the year.
• According to the President's many promises, my health insurance premiums should be reduced by up to $12,500 for the year; this comes out to about $312/month or a reduction of $58/month. Now I understand this is the maximum, and that my health care plan may or may not be "average," so I'm willing to give the President yet another benefit of the doubt; in fact, I understand that much of this plan won't be fully implemented for several years, so I'm willing to go all the way and suggest that I'll be happy if my premiums are reduced by even 1 cent next year, or any year in the future even.

Now that the health care reform bill has been passed into law, a number of companies have estimated what the new health care costs will be to them. And insurance companies are beginning to chime in, too. In an interview with BusinessWeek, Aetna CEO Ron Williams made a number of interesting points, but the most revealing was:

BW: Will insurance premiums go up?
RW: The answer is yes, and some of the things that will drive those premiums are significant additional taxes the industry will ultimately have to pay in the first year.

Now there are a couple of ways to approach this answer, but in the end the answer still remains the same. Premiums are going up (did you ever honestly think they would go down?).

So my comments for the President (or anyone who truly believes premiums will go down) are these:

1. If you truly thought insurance companies would raise premiums after this law passed, you blatantly lied for political gain.
2. If you truly thought insurance companies would lower premiums after this law passed, then you're either incredibly naive (so much so that being the President might be a little too much for you); or the the law is so bad that it can't even force premiums down. And if that's the case, what exactly was the point of all of this?

Fact check the future! Journalism #fail in the health care debate

The Associated Press is running a story entitled "FACT CHECK: Spinning the new health care law." From the article:

The tumultuous health care debate that brought you death panels and socialism has spun off a catalog of popular myths that will keep growing as President Barack Obama and all sides battle toward the midterm elections this fall.
At a White House signing ceremony Tuesday, Obama ventured the hope that Americans on all sides will judge the legislation for what it actually says and does. "When I sign this bill," he declared, "all of the overheated rhetoric over reform will finally confront the reality of reform."
Wishful thinking, Mr. President.
Facts are stubborn, the saying goes. But myths about the legislation are likely to persist as well. And a lot of people don't agree on which is which.
"People have taken away from the debate a number of beliefs about the bill that are very difficult to shake based on objective reports," said Robert Blendon, a Harvard public health professor who follows opinion trends. "There is enough skepticism out there that questions about how it's going to help the country are likely to continue."
Here's a look at some of the myths and realities, from both sides of the issue...

Ok, I'm skeptical (this is the MSM after all), but so far, so good. The opening suggests that someone will actually examine the legislation and compare what people have said about the bill, to what the bill actually says...right? Wrong. Let me quote three of the six myths stated in this article:

• Health care overhaul is going to lower your health insurance premiums.
• The Democratic bill will lead to government health care rationing.
• The legislation will save Medicare from bankruptcy.

Now, the point of this blog post is decidedly not to examine each of these myths, because that is precisely what the article does. Furthermore, I'm not going to examine whether or not I agree with some of the myths (if you haven't figured it out yet, this blog post isn't really about health care). Perhaps you already understand why I picked these myths...

How can you possibly "fact check" any of these statements? The accuracy of these statements will be determined by events that occur in the future. They haven't even happened yet. Is it a fact that health care reform has lowered (or raised) my health insurance premiums? What information could I possibly use to fact-check this statement? Estimates of what might happen in the future are estimates for a reason; they're not facts. And that sort of eliminates the entire point of this exercise, does it not? How is this considered serious journalism?

One of the other myths ("Obama has put the nation on a slippery slope toward socialism") is a subjective, philosophical question to which there is, realistically, no true factual answer. The others ("You will be forced to pay for other people's abortions" and "The American people have already rejected Obamacare) are probably debatable myths; but consider that if only 1/3 of the article is even debatable as being relevant, we have already failed.

Are health care mandates constitutional?

One of the provisions of the current health care reform bills being considered is a so-called health care mandate, which would require people to purchase some level of coverage or pay a fine.

Last night, I posted on Twitter:

Someone please tell me where in the Constitution it allows Congress to force me to buy something or become a criminal, just for being alive.

And so I ask again, where is this provision?

The few answers that can be found are pretty weak. Congress trots out the commerce clause for just about everything, so that's a popular answer. The congressional power of taxation is also cited, which is pretty interesting in and of itself. If Congress justifies a mandate by claiming their power to tax, are they willing to come full circle to admit that the mandate itself is a tax? If so, how does this impact the President's pledge to not raise taxes on the middle class?

The idea of a mandate is not a new one. During the health care debate in 1994, such a mandate was also discussed. At the time, the non-partisan Congressional Budget Office wrote:

"The government has never required people to buy any good or service as a condition of lawful residence in the United States."

Further, it was "an unprecedented form of federal action." This article from the New York Times (and reposted on SFGate.com) is one of the few that is at least willing to talk about the issue of constitutionality. The last sentence is enlightening: "If the individual mandate were found to be unconstitutional, the health care overhaul as it is now structured by many committees in Congress would almost certainly collapse."

So for those of you that support the administration's health care reform plans, I'd be interested to hear your justifications for why Congress has the power to require me to buy something as a condition of living in the United States.