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ACA Litigation – Oklahoma’s “Federalism Unit” Piles On

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By Nicole Huberfeld

We Who Follow ACA Litigation will continue to be in business.  [On September 19], Oklahoma’s Attorney General sought leave to amend the state’s original complaint regarding the individual mandate.  Now the state claims that the tax subsidies offered to those qualifying for financial assistance to obtain insurance through the exchanges are impermissible.  This amended complaint builds on an existing thread of new challenges that was promoted before NFIB was decided.  (The amended complaint also asks the court to consider the state’s nullification law, which should be struck down based on the Supremacy Clause.)  The ACA challengers that never advanced beyond district court have been seeking leave to amend their complaints with regularity.  Last week I posted about the Pacific Legal Foundation’s new strategy, which is rooted in the Orgination Clause.  (The case was also noted over at Balkinization.)

Oklahoma’s amended complaint is grounded in theories advanced by Jonathan Adler and the Cato Institute.  The argument is that tax credits to support the purchase of health insurance through qualified health plans in the exchanges are only available when the exchanges are created by the states, not the federal government.  They claim that section 1311 of the ACA only contemplated providing tax subsidies in state-run exchanges to incentivize states to create the exchanges and that the federally-established exchanges cannot offer the same tax benefit.  In testimony to Congress, they argued the problem is that the proposed IRS regulation implementing the subsidies for people from 100-400% of the FPL in the exchanges applies to both state and federally-run exchanges, not just state exchanges.  Thus, they claim that the IRS has exceeded its statutory authority.  As Tim Jost noted here, the ACA did intend to permit tax credits in federal exchanges.  I agree with Tim’s analysis and would add that the Anti-Injunction Act probably would apply to this provision; unlike the “penalty” of the individual mandate, this is actually described as a “tax.”  Also, the states are not the appropriate parties to raise this issue; individuals benefit from tax credits, individuals would need to pursue the alleged problem.

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ONC Backs Off Rule-making For Governance of Health Information Exchange

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By Leslie Francis

Establishment of the infrastructure needed for the efficient, accurate, and secure exchange of health information is a crucial piece of improving care in the US.  Exchange fosters the ready availability of information, reducing redundancy and hopefully improving care quality.  To this end, proposals for a National Health Information Network were highly touted during the Bush Administration and continue to be supported by the Obama Administration, the Office of the National Coordinator for Health Information Technology (ONC) was established in 2004, and several federal advisory committees (the ONC Policy Committee and the ONC Standards Committee) were established by Congress in the HITECH Act in 2009.  Yet progress towards health information exchange remains halting at best–some hypothesize because of resistance within the private sector itself.  Recent developments at ONC are not encouraging.

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A Slap-Down to Libertarian Thinking in Health Care

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By Vickie J. Williams

On Sept. 14, the United States District Court for the Eastern District of Virginia delivered a slap-down to a case challenging Virginia’s Certificate of Public Need (COPN) law, dismissing the case on all four of the constitutional theories raised in the case.

In Colon Health Centers of America v. Hazel (Subscription required), two health care providers who wanted to offer imaging services in Virginia challenged Virginia’s COPN law, claiming it violates the Privileges or Immunities, Due Process, and Equal Protection Clauses of the Fourteenth Amendment, as well as the Dormant Commerce Clause.  The plaintiffs apparently sought to turn back the clock on judicial interpretations of these provisions at least 75 years, to the time when substantive due process reigned and the market was the unfettered king of commerce (think Lochner v. New York), and courts second-guessed legislatures on economic and social policy, The plaintiffs even acknowledged in their briefing on the motion to dismiss that their challenge under the Privileges or Immunities Clause was not in accordance with settled law, which has held since 1873 (in The Slaughter-House Cases)  that the right to earn a living unburdened by state police power legislation is not one of the privileges or immunities guaranteed by the Fourteenth Amendment.   They simply wanted to preserve the issue for appeal.

The court, predictably and in accordance with well-settled precedent, dismissed all of these claims.  But one of the interesting things that appears in the decision is the reiteration of the standard justification for Certificate of Need (CON) programs, which currently exist in 36 states.  The court states that CON programs “correct the market” for expensive health-care services.  We generally acknowledge that there is a need to “correct the market” in health-care through the retention of CON laws in most states by the legislatures. Yet the majority of the United States Supreme Court looked upon this idea with great suspicion in the Affordable Care Act case; failing to buy the argument that the health-care and health-insurance markets were tied together (or were a single market) and that there were major distortions in the national market that could be corrected via economic legislation under the Commerce Clause.  Why the difference?  Are we heading for another era where the courts impose a particular economic view of the world on elected representatives?

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The Central States Law Schools Association 2012 Scholarship Conference

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The Central States Law Schools Association 2012 Scholarship Conference will be held October 19 and 20, 2012 at the Cleveland-Marshall College of Law, in Cleveland, Ohio.  We invite law faculty from across the country to submit proposals to present papers or works in progress.

The purpose of CSLSA is to foster scholarly exchanges among law faculty across legal disciplines.  The annual CSLSA conference is a forum for legal scholars, especially more junior scholars, to present working papers or finished articles on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment.  More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work.

To allow scheduling of the conference, please send an abstract of no more than 500 words to Secretary Missy Lonegrass at Missy.Lonegrass@law.lsu.edu by September 22, 2012.  Any late submissions will be considered on a space available basis only.

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Announcement – Nova Law Review Openings

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The Nova Law Review has openings in two upcoming issues and invites submissions of essays or articles. The first book with openings is the general book of the Law Review, for which the Law Review is seeking articles on any topic to fill a few holes.

The second book is a symposium issue for which the Law Review is seeking additional articles illustrating the intersection between the law and issues impacting veterans.  The Shepard Broad Law Center at Nova Southeastern University is hosting a symposium titled Wounds of War:  Meeting the Needs of Active Duty Military Personnel and Veterans with Post-Traumatic Stress Disorder on February 1, 2013.  The book is intended to be a special interdisciplinary issue providing a forum for discourse between scholars and practitioners to discuss emerging issues in the field of veterans’ affairs.  Potential topics may include, but are not limited to, the following:  veterans experiencing post traumatic stress disorder, veterans’ courts as therapeutic jurisprudence, any disability treatment post-active duty, any mental therapy treatment pre- and post-duty, the psychological effects of disabilities within the military and a military member’s family, philosophical ideas on how to improve the medical and psychological treatment of active duty military or veterans, etc.

Authors are invited to submit manuscripts of no more than 50 pages including footnotes for either book.  Shorter pieces are welcome. Email submissions are preferred; the subject line should include the words “General Book” for submissions for that book and the words “VA Symposium” for submissions for that book.  Each submission should include a cover letter and a C.V. Please submit all materials by November 1, 2012 to Raul Valero, Editor-in-Chief, at valeror@nsu.law.nova.edu or Rachel Bausch, Lead Articles Editor, at bauschr@nsu.law.nova.edu.

[cross-posted at HealthLawProf Blog]

Now What? A Look at the Development of Health Exchanges

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By Jennifer S. Bard

One of the most common questions I get asked when I talk about health care reform is some version of “how is it actually going to work?” Good question.  So much of the Bill was TBA while its Constitutionality was being tested that only now does it seem as if the both the insurance industry and the government are realizing that it is up to them to make this work.

For example, what, exactly is an Exchange?  There’s surprisingly little information—and all of in the future tense.  For example, the Kaiser Family Foundation website gives this definition: “Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance.” This is how the Government is explaining it.

But there are still a lot of missing pieces.  Who decides the criteria for participation? How will “affordable” be defined? Because the issue isn’t just price—it’s what’s included in that price.   We know that “Exchange” is essentially a web shopping site where people can go to study and compare different health insurance packages.   The difference is that at least some of these packages will be “affordable” and there will always be some kind of “affordable” option for everyone regardless of their current health status.  Beyond that, there are a lot of questions.  Some states are working hard to set up exchanges, others have refused to participate and still others are still in some kind of “planning” or “study” phase.  This map from the Kaiser Foundation gives a 50 state overview.  As the idea of exchanges and the actual implementation of the mandate which will be the mechanism that requires consumers to use these exchanges, there is a growing awareness on the part of the government agencies responsible for running this that it will be a lot of work. For example, this article from Business Week reports concerns expressed by the Commissioner of IRS about how they are actually going to enforce the penalties. There’s already a considerable amount of hiring going in.

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Uninsured Drop, But the Challenges Continue

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By Nicole Huberfeld

The Pacific Legal Foundation seems unable to face its defeat before the Court in June.  The PLF has filed a motion seeking leave to amend a complaint on behalf of a small business owner who would have the ACA declared unconstitutional based on the theory that the law was introduced in the Senate, not the House.  Article I section 7 of the Constitution commands that “All bills for raising revenue shall originate in the House….”  This plaintiff, Matt Sissel, originally filed a complaint challenging the constitutionality of the ACA as exceeding Congress’s commerce power; but, because the Court decided that the ACA is constitutional as an exercise of tax authority in part because it raises revenue, the plaintiff seeks to amend his complaint rather than allow it to be dismissed based on the decision in NFIB v. Sebelius.

It seems ironic that this novel filing made news the same day that the Census Bureau reported that the number and the percentage of uninsured Americans dropped for the first time since 2007.  The drop is largely attributed to young adults being permitted to stay on their parents’ insurance policies under new ACA requirements.  While the drop is movement in the right direction, it is hardly a victory given that nearly one in six Americans still lack health insurance coverage and the percentage of Americans on Medicaid has increased due to the ongoing effects of the Great Recession.  Nevertheless, it is a small taste of the positive outcomes that the ACA may produce if the federal government could stop defending the law and instead focus on implementing it.

Though it seems unlikely that lower federal courts will be interested in the obscure constitutional provision PLF relies on, as I have said before, the administration needs to learn from the nonchalance with which it initally treated challenges to the ACA.  The novelty or obscurity of the challenger’s theory does not correllate to failure with the Roberts Court, which has proven itself willing to accept new legal theories and willing to ignore or modify precedent.

[cross-posted from HealthLawProf Blog]