Obamacare Court Rulings Protect Employers and Taxpayers’ Rights

Published May 18, 2016

Consumer Power Report #506

May 18, 2016

Welcome to the Consumer Power Report.

Many Americans mistakenly think the Founding Fathers crafted the U.S. Constitution’s separation of powers in order to embed a division-of-labor economy in our federal government, similar to private businesses’ reliance on specialized workers to produce the best products and maximize efficiency.

The legislative branch makes the laws and the executive branch enforces them, the thinking goes, but only the judicial branch has to bother about making sure those laws are constitutional.

Such thinking actually contradicts Article VI of the Constitution. Although Articles I, II, and III clearly assign Congress, the president, and the courts unique roles – and prescribe ways each should check the others to balance their powers – the Constitution does not exempt any branch of government from the obligation to ensure our nation’s laws are constitutional.

According to Article VI, “The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution.”

To the shame of the legislative and executive branches, the U.S. Supreme Court and a federal district court have issued two rulings exposing the Obama administration’s eagerness to violate the Constitution while implementing the ironically named Patient Protection and Affordable Care Act (ACA), which Congress approved and President Barack Obama signed in March 2013.

The Supreme Court protected the constitutional rights of American employers from encroachment by the executive branch in its unanimous ruling in Zubik v. Burwell, commonly referred to as “Little Sisters” (after one of the petitioners). In a per curiam opinion (i.e., unsigned due to unanimity) delivered May 16, the Court instructed multiple courts of appeal to reconsider the constitutionality of a mandate related to the Affordable Care Act, this time factoring in the federal government’s admission the mandate needlessly violates employers’ First Amendment rights.

Not-for-profit employers, including Little Sisters of the Poor and Priests for Life, had argued on March 23 a U.S. Department of Health and Human Services (HHS) mandate unlawfully requires them to violate their religious beliefs, which the First Amendment protects. The mandate requires employers to aid HHS and insurers in offering the nonprofit groups’ employees health insurance plans covering contraceptives.

Following oral arguments, the Court ordered both sides to file supplemental briefs suggesting ways the federal government could accommodate employers who conscientiously object to the HHS mandate while still accomplishing the mandate’s objective.

The Court determined the federal government conceded its own central point: “The Government has confirmed that the challenged procedures ‘for employers with insured plans could be modified'” (emphasis added). Consequently, the Court has “vacated” (essentially erased) lower courts’ conflicting rulings on the mandate’s constitutionality and instructed certain courts of appeal to rehear the relevant cases.

Obama’s comments in a Buzzfeed interview the same day confirmed Americans need the judicial branch to check the executive. Better still would be an executive branch eager to accommodate constitutional rights the first go-around instead of circumnavigating the Constitution until the judicial branch lays down traffic spikes.

“The practical effect right now is that women will still continue to be able to get contraception, if they are getting health insurance,” Obama said. As The Stream reported on May 17, attorneys for Little Sisters of the Poor interpret Obama’s comments as an admission the government never did need to coerce the 37 nonprofit employers or other conscientious objectors in order to accomplish the administration’s goal.

In a separate case and ruling issued on May 12, U.S. District Court Judge Rosemary Collyer protected American taxpayers from the Obama administration’s unlawful spending under ACA of an estimated $175 billion over 10 years in reimbursements to insurance companies.

“Congress authorized reduced cost sharing” – i.e., created a legal mechanism for offsetting insurers’ costs – “but did not appropriate monies for it,” Collyer wrote. “Paying out … reimbursements without an appropriation thus violates the Constitution.”

Appropriately, Collyer grounded her rebuke in three pages of constitutional background that serves as a primer on parts of the Constitution, which states in Article I, Section 9, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”

Collyer recognized the administration’s attempt to capitalize on the very flaws in Obamacare the administration has tried to explain away. Such dodging and weaving should be expected from the sausage-makers that, as Collyer’s opinion notes, produced the Affordable Care Act behind closed doors. The administration’s failed attempt to justify raiding the U.S. Treasury may be more artful than ACA itself, but it is just as ineffective.

One cannot blame Americans – much – for thinking the Framers placed the burden of “support[ing] this Constitution” squarely on the judicial branch. Judging from the other branches’ actions, Congress and Obama frequently operate according to the same misconception.

Even as health insurance continues to grow more expensive under ACA, most Americans can afford to be reminded of the civics lessons enshrined in the Supreme Court’s and Collyer’s rulings.

But it cannot be a healthy sign when the country’s health care policy debates have less to do with health care than with holding government officials accountable to Article I of the Constitution and defending liberties protected, for the time being, by the First Amendment.

— Michael Hamilton



South Carolina Governor Nikki Haley has vetoed a bill that would have banned the use of Opternative in the state, signaling a big win for the Chicago online eye exam startup.

South Carolina Senate Bill 1016 sought to enact an “eye care consumer protection law,” which would have prevented Opternative’s online refractive eye exam technology, and instead required patients to visit an optometrist for the test. Opternative allows patients to take an eye exam from home, using their computer and a smartphone, and in 24 hours get a prescription for contacts or glasses sent to their email for $40 – all without making a trip to the optometrist.

Haley, in written remarks, said “I am vetoing this bill because it uses health practice mandates to stifle competition for the benefit of a single industry,” adding, “During my administration, South Carolina has expanded access to healthcare, including mental health services, to rural and underserved regions of our state using telemedicine. Unfortunately, a small group of eye care professionals is seeking to block new technologies that expand low-cost access to vision correction services.”

As Chicago Inno reported back in March, optometrists and optometry associations have lobbied government officials about their concerns with technology like Opternative. The American Optometric Association contends there are “severe pitfalls in separating refractive tests from annual comprehensive eye exams performed in-person by an eye care professional.”

Opternative says its exams are a convenient way to order and refill a prescription and are not a replacement for an eye health exam.

Other than South Carolina, states like Nebraska, Minnesota, Wyoming and Oklahoma have mulled similar laws that would restrict Opternative’s technology. Georgia and Indiana have banned Opternative all together.

Haley, in fact, urged legislators to expand the use of online eye exams, writing “Send a bill to my desk that allows for the expanded use of automatic vision evaluations in all medical settings, and I will sign it.” …

SOURCE: Jim Dallke, ChicagoInno


Health insurers in Washington are requesting a sharp jump in rates for individual plans next year – up 13.5 percent, on average – and fewer options will be offered through the state-run insurance exchange, officials announced Monday.

Thirteen insurers have filed 154 individual health plans for 2017, including nine companies offering plans within the state exchange, Washington Healthplanfinder, and four selling plans only outside of the exchange.

The firms have requested rate increases ranging from a 7.4 percent jump for Coordinated Care to a 20 percent boost for Premera Blue Cross, with an average increase of 13.5 percent based on enrollment, according to figures released by the Office of the Insurance Commissioner.

The move comes amid predicted rises in rates nationwide as insurers say coverage required by the federal Affordable Care Act health-care law has proved to be a financial drain. In Virginia, for instance, which reports on rate requests early, increases ranged from 9.4 percent to 37.1 percent.

Premera lost about $117 million in 2015, the company said, largely because it received nearly $412 million in premiums in 2015 but paid nearly $457 million in claims, plus about $72 million in administrative expenses, according to its filing. …

SOURCE: JoNel Aleccia, The Seattle Times


Children and teens brought illegally to the United States gained access to publicly funded health care Monday as California began allowing young people to sign up for the state’s health care program for the poor without regard to their immigration status.

State officials expect as many as 185,000 children under age 19 to join Medi-Cal in the first year – about three-quarters of the estimated 250,000 eligible youth. About 121,000 will be automatically transferred from a limited version of the program that provides only emergency care, giving them the full range of medical, dental, vision and mental health coverage available for little or no cost with full-scope coverage.

In a rally outside the state Capitol, health care and immigrant rights advocates celebrating the expansion turned their attention to their next goals. They want Medi-Cal – the state’s version of Medicaid – to cover income-eligible adults who migrated illegally and are pushing to allow those who make too much money to buy private coverage through the state’s insurance exchange, Covered California.

“While Congress remains gridlocked with stereotypes and hateful rhetoric, California remains as a hopeful beacon that tells people, ‘Immigrants, you matter. Immigrants, you contribute to our economy. Immigrants, you are people that deserve to have health care,'” said Sen. Ricardo Lara, D-Bell Gardens, who wrote the legislation authorizing the expanded coverage.

Critics question why California lawmakers are spending time and money to help people who immigrated illegally when there are American citizens in need.

“This acts as a magnet to the world – bring your children, bring your families to California illegally and you will get free health care,” said Robin Hvidston, executive director of the activist group We the People Rising. …

SOURCE: Jonathan J. Cooper, Associated Press, The Orange County Register


Several recent studies have illustrated the root of health care’s cost problem: In most cases, no one person – let alone one organization – bears sole responsibility for paying the bill. Slowing the growth of health costs may well involve changing those financial incentives – but also requires changing the culture that supports the status quo.

Two examples: A paper by University of Pennsylvania researchers found that 2,300 physicians “submitted claims for service codes that would translate into more than 100 hours per week on services” for Medicare beneficiaries alone; 600 doctors submitted claims totaling more than 168 hours per week – alleging to Medicare that they were working more than 24 hours per day, seven days per week. When it comes to drug costs, another researcher noted an interesting discrepancy: While pharmaceutical prices have increased by double-digit margins the past three years, drug prices net of rebates – that is, drug spending after discounts provided from manufacturers to pharmaceutical benefit managers (PBMs) – have grown at much slower rates.

In both cases, the opacity of health care finance – individuals and businesses not knowing what things cost, and benefits not getting passed to consumers – results in hidden gains for intermediaries. In the drug scenario, PBMs negotiate rebates with manufacturers – rebates which they may or may not pass on to insurers, and which insurers may or may not ultimately pass on to consumers. Likewise, the Medicare insurance system – in which most seniors pay little-to-nothing out-of-pocket – can encourage some physicians to “up-code” their claims, knowing their patients will not incur any direct financial penalty. …

SOURCE: Chris Jacobs, The Wall Street Journal