Is it legal for Trump to punish health insurers that do not support repeal of Obamacare?

By Christopher Robertson

In a recent story about how the health insurance marketplaces are being destabilized by the Trump administration’s vacillation, the LA Times reports:

At one recent meeting, Seema Verma, whom Trump picked to oversee the federal Medicare and Medicaid programs, stunned insurance industry officials by suggesting a bargain: The administration would fund the CSRs if insurers supported the House Republican bill to repeal the Affordable Care Act.

For what its worth, the Trump administration denied that she had done so.  But if she did, is that legal?  Can politicians actually offer to give money from the Federal Treasury to companies in exchange for their political support (or withhold it for lack of that support)?  If Ms. Verma was corruptly offering a “quid pro quo” exchange (as TalkingPointsMemo says), that would fit the statutory definition of the crime of bribery, as I discuss in a 2016 paper, The Appearance and Reality of Quid Pro Quo Corruption. However, this case also implicates the First Amendment rights of the insurance companies to support or oppose the Obamacare repeal.

The paradigmatic political bribe involves money being paid to the official who agrees to perform an official act in exchange.  Judge Easterbrook has said that “[t]he idea that it is a federal crime for any official . . . to take account of political considerations when deciding how to spend public money is preposterous.”   On the other hand, in U.S. v. Siegelman, the Alabama governor went to prison (in part) because a donor made a $500,000 contribution to an independent group that supported a state lottery initiative, which the governor had prioritized as a political goal, even though neither he nor his campaign received the money.  In exchange, Siegelman allegedly re-appointed the donor to a “Certificate of Need” board, which gave permits to hospitals.

In the 1982 case of Brown v. Hartlage, the Supreme Court considered whether
a candidate for office could promise specific benefits to voters as part of his
election campaign, which a state law seemed to proscribe.  The Court explained:

We have never insisted that the franchise be exercised without taint of individual benefit; indeed, our tradition of political pluralism is partly predicated on the expectation that voters will pursue their individual good through the political process, and that the summation of these individual pursuits will further the collective welfare.

So it seems unlikely that Ms. Verma could be prosecuted for bribery, even if a federal prosecutor were so inclined.

But she may be violating the insurers’ First Amendment rights to freely choose whether to oppose or support Obamacare repeal.  The Supreme Court has often said that ‘the government may not deny a benefit to a person because he exercises a constitutional right…. Those cases reflect an overarching principle, known as the unconstitutional conditions doctrine, that vindicates the Constitution’s enumerated rights by preventing the government from coercing people into giving them up.”   The Tenth Circuit has recently summarized:

“The Supreme Court ‘has applied this doctrine in two distinct contexts. First, the doctrine has been applied when the condition acts prospectively in statutes or regulations that limit a government-provided benefit—typically a subsidy or tax break—to those who refrain from or engage in certain expression or association. … Second, the unconstitutional-conditions doctrine has been applied when the condition acts retrospectively in a discretionary executive action that terminates a government-provided benefit—typically public employment, a government contract, or eligibility for either—in retaliation for prior protected speech or association.'”

This body of law is, in my view, unstable and unpredictable.  However, if this theory were developed and applied to the present case concerning the repeal of the Affordable Care Act, it would make for an interesting bookend to the Supreme Court cases in Citizens United, which famously affirmed that corporations have First Amendment rights, and to Hobby Lobby, which found that privately-held corporations’ statutory rights (to religious freedom) were infringed by the contraceptives coverage mandate.

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