The other side of the ObamaCare bubble

posted at 5:45 pm on April 1, 2012 by Karl

Like a number of others, I noted this week the bubble in which liberal legal analysts and pundits hid from how tenuous the claims are for the constitutionality of Obamacare. It is also worth noting that conservatives and libertarians generally did not hide in a bubble of their own to ignore the proffered justifications for the law.

The Obama administration and its fellow travelers largely justify the mandate based on the supposedly unique features of the healthcare market, e.g., the general inability to “opt out,” legal requirements that hospitals provide emergency care, and cost-shifting related to uncompensated care. Judge Roger Vinson addressed these arguments in his decision striking down the mandate; his arguments were generally accepted by the 11th Circuit Court of Appeals, creating the split with the 6th Circuit that essentially guaranteed Supreme Court review. (Again, liberal geniuses somehow missed this split as an indicator their case was not a slam dunk, even though these decisions have not always followed neat partisan lines.) Judge Vinson’s decision was echoed in some of the skeptical questions raised by Chief Justice Roberts this past week, e.g., asking whether Congress could impose a cellphone mandate to summon emergency services.

Meanwhile, analysts like Avik Roy and Shikha Dalmia examined the free-rider and uncompensated care issues and found them wanting. Again, their critiques were echoed by Chief Justice Roberts, e.g., asking how issues with emergency care are addressed by mandating comprehensive insurance coverage. Although uncompensated care can be an issue in certain circumstances the $43 billion Congress claims affects interstate commerce amounts to only 3%-5% of total healthcare spending, roughly equivalent to the percent big law firms seek to provide as pro bono services. Indeed, it’s only slightly more than the 2% average shrinkage in the retail sector.

Moreover, as John F. Cogan, R. Glenn Hubbard and Daniel Kessler note, peer-reviewed studies suggest cost shifting actually raises private health insurance premiums by a negligible amount, ($80 annually for the typical plan, far less than the $1,ooo Congress estimated):

Where did Congress go wrong? We traced its estimates of the magnitude of the hidden tax of $43 billion per year, or an increase in family premiums by an average of $1,000 per year, to two sources—the aforementioned Health Affairs study, and a non-peer-reviewed study commissioned by FamiliesUSA, a Washington, D.C., group long known for its advocacy of greater government involvement in health care. Yet Congress simply ignored the evidence in the Health Affairs study and failed to recognize the serious flaws in the FamiliesUSA analysis.

Specifically, Congress ignored the $40 billion to $50 billion that is spent annually by charitable organizations and federal, state and local governments to reimburse doctors and hospitals for the cost of caring for the uninsured. These payments, which amount to approximately three-fourths of the cost of such care, mitigate the extent of cost shifting and reduce the magnitude of the hidden tax on private insurance.

Moreover, the economics of markets for health services suggests that any cost shifting that may occur is unlikely to affect interstate commerce. Because markets for doctor and hospital services are local—not national—the impact of cost shifting will be borne where it occurs, not across state lines.

While taxpayers may not be thrilled at picking up the tab for uncompensated care, it is already being done. Moreover, Cogan, Hubbard and Kessler make a point Roy also makes — Obamacare’s reliance on expanding Medicaid (which chronically under-compensates providers) is likely to increase cost-shifting, not decrease it. Furthermore, as Peter Suderman notes, Congress purports to solve this supposed $43 billion problem with $200 billion in subsidies.

Nevertheless, even when fisking Linda Greenhouse, NRO’s Ed Whelan added his point “is not to maintain that any reasonable person must agree with the states’ brief,” while James Taranto noted it was quite possible Greenhouse would turn out to be correct in predicting a lopsided vote for Obamacare and that conservative lawyers he spoke with thought Obamacare would be upheld (which lefties see as an admission they are correct, rather than a recognition of a debate). Despite the profound problems with the key justifications for Obamacare, folks on the right generally have not engaged in the level of dismissive denial the left has.

This post was promoted from GreenRoom to HotAir.com.
To see the comments on the original post, look here.


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A witness to the arguments writes on this topic over at Breitbart today too. The dems thought this was a slam dunk, until it was bathed in the light of reason.

dogsoldier on April 1, 2012 at 5:52 PM

It looks to me that this has the very real possibility of being decided upon political ideologies rather than constitutional guidelines. If that’s the case, then for me and the majority of Americans it will be less and substandard healthcare for more money. Please tell me I am wrong.

kam582 on April 1, 2012 at 6:03 PM

If we had a free press in this country, instead of the Democratic Pary propaganda network we have, they certainly would have looked at this law. I remember, when ABC gave over what amounted to a 6 hour infomercial on Obamacare. The rigged the questioners, they rigged how it was displayed and they asked few of the critical questions that should have been asked. How on earth can the populace judge a bill based on the information they received from a national press that is supposed to provide it to them.

I’m not sure how the court will decide on this, my hope is they throw the whole thing out, but the Democrats and their media wing, have proven themselves unworthy of the trust of the governed.

bflat879 on April 1, 2012 at 6:07 PM

Really, would take at least a 7-2 vote on the mandate to shake the left out of the idea that their health care plan would have worked, if it wasn’t for those meddling conservative Justices. If you look at the most recent commentary, they’ve already decided that the questioning of the mandate specifically and the other aspects of ObamaCare® in general was on illegitimate grounds, while continuing to hold out hope (which, sadly, still could happen), that Chief Justice Roberts cares so much about what everyone thinks about the Court’s image he’d side with the liberal Justices to uphold the law simply to avoid sullying their reputations.

jon1979 on April 1, 2012 at 6:07 PM

Specifically, Congress ignored the $40 billion to $50 billion that is spent annually by charitable organizations and federal, state and local governments to reimburse doctors and hospitals for the cost of caring for the uninsured. These payments, which amount to approximately three-fourths of the cost of such care, mitigate the extent of cost shifting and reduce the magnitude of the hidden tax on private insurance.

Yes. Bottom line…Congress didn’t care to look at the big picture. They had an agenda and non-peer reviewed data by a source with a similar agenda was just the ticket.

a capella on April 1, 2012 at 6:08 PM

It looks to me that this has the very real possibility of being decided upon political ideologies rather than constitutional guidelines. If that’s the case, then for me and the majority of Americans it will be less and substandard healthcare for more money. Please tell me I am wrong.

kam582 on April 1, 2012 at 6:03 PM

That point was made quite clear with Kagan’s appointment to the SC.

a capella on April 1, 2012 at 6:10 PM

It looks to me that this has the very real possibility of being decided upon political ideologies rather than constitutional guidelines. If that’s the case, then for me and the majority of Americans it will be less and substandard healthcare for more money. Please tell me I am wrong.

kam582 on April 1, 2012 at 6:03 PM

If the Justices decided on this case solely on the Constitutional and Legal merits, they would throw the entire thing out by a 9-0 vote.

But thanks to Democrats Bill Clinton and Barack O’bama, at least 4 of the SCOTUS Justices see the Constitution as Subject to Change at Will.

Del Dolemonte on April 1, 2012 at 6:13 PM

Congress didn’t care to look at the big picture. They had an agenda and non-peer reviewed data by a source with a similar agenda was just the ticket.

a capella on April 1, 2012 at 6:08 PM

Gee, sorta like that Global Warming thing?

Del Dolemonte on April 1, 2012 at 6:14 PM

$200 billion in subsidies …**Face meet palm**…they will NEVER get it..

hillsoftx on April 1, 2012 at 6:15 PM

It looks to me that this has the very real possibility of being decided upon political ideologies rather than constitutional guidelines. If that’s the case, then for me and the majority of Americans it will be less and substandard healthcare for more money. Please tell me I am wrong.

kam582 on April 1, 2012 at 6:03 PM

The proggies will certainly take that at this stage. Many of them are pushing the position something like “how could the Supreme Court strike down the only major accomplishment of the first black president?”

They want A/A applied to Supreme Court decisions. Why not, little Bammie has skated on A/A his entire life so far.

slickwillie2001 on April 1, 2012 at 6:19 PM

Come on, we knew this fight wasn’t going to be easy.

And, unless I miss my guess, short of unequivocal statement that any Government-sponsered Healthcare is unconstitutional, they will try again.

This fight is only round 3 – we need to remain on point to keep this from spiraling further out of control.

BlaxPac on April 1, 2012 at 6:20 PM

It looks to me that this has the very real possibility of being decided upon political ideologies rather than constitutional guidelines. If that’s the case, then for me and the majority of Americans it will be less and substandard healthcare for more money. Please tell me I am wrong.

kam582 on April 1, 2012 at 6:03 PM

I would like to tell you your wrong but that is how it looks to me too.

bazil9 on April 1, 2012 at 6:21 PM

This was never about providing health care. It was about a huge increase in taxes and a gian power grab for the totalitarian state.

jukin3 on April 1, 2012 at 6:22 PM

dogsoldier on April 1, 2012 at 5:52 PM

Thank you for the tip. The Breibart article is a hoot, especially the part about Larry Tribe.

Wethal on April 1, 2012 at 6:28 PM

Although uncompensated care can be an issue in certain circumstances the $43 billion Congress claims affects interstate commerce amounts to only 3%-5% of total healthcare spending, roughly equivalent to the percent big law firms seek to provide as pro bono services. Indeed, it’s only slightly more than the 2% average shrinkage in the retail sector.

Surprised you did not fix this before promotion!
In 2009 there was $2,500,000,000,000 spent on medical care. $43,000,000,000 is much less than 3-5% in fact it is either 1/2 that or 1/3 depending on which of the two values you use. You should fix this. I have seen several studies, and it comes out that uncompensated care runs about the same amount as a percentage year after year after and that percentage is about 2%.

astonerii on April 1, 2012 at 6:28 PM

OT, but where is Cap’n Ed? Is he alright?

Key West Reader on April 1, 2012 at 6:30 PM

dogsoldier on April 1, 2012 at 5:52 PM

Thank you for the tip. The Breibart article is a hoot, especially the part about Larry Tribe.

Wethal on April 1, 2012 at 6:28 PM

Linkie?

slickwillie2001 on April 1, 2012 at 6:41 PM

Key West Reader on April 1, 2012 at 6:30 PM

Based on his Twitter account, Ed seems to be enjoying his vacation, although he apparently awakened with laryngitis today.

Karl on April 1, 2012 at 6:42 PM

OT, but where is Cap’n Ed? Is he alright?

Key West Reader on April 1, 2012 at 6:30 PM

Doin’ what the Obamas do twice a month..Vacationing.

Electrongod on April 1, 2012 at 6:42 PM

Thank you for the tip. The Breibart article is a hoot, especially the part about Larry Tribe.

Wethal on April 1, 2012 at 6:28 PM

I enjoyed it too.

dogsoldier on April 1, 2012 at 6:42 PM

Republican and even some conservative defenders of Romney are just as quick to throw out the “free rider” argument in defense of the Massachusetts mandate as are defenders of the federal mandate, when there’s just as little to back it up. The numbers don’t support either.

Just Sayin on April 1, 2012 at 6:45 PM

dogsoldier on April 1, 2012 at 5:52 PM

Thank you for the tip. The Breibart article is a hoot, especially the part about Larry Tribe.

Wethal on April 1, 2012 at 6:28 PM

Linkie?

slickwillie2001 on April 1, 2012 at 6:41 PM

http://www.breitbart.com/Big-Government/2012/04/01/From-Hugs-to-Hand-Wringing-Watching-the-Elite-Legal-Left-Freak-Out-at-the-Supreme-Court

Del Dolemonte on April 1, 2012 at 6:47 PM

astonerii on April 1, 2012 at 6:28 PM

1. The smaller percentage you cite (~1.7%) is really the basis of the Cogan/Hubbard/Kessler oped, if I read it correctly;

2. Recent tech changes at HotAir actually prevent GR authors from editing once published.

Karl on April 1, 2012 at 6:52 PM

It isn’t that there is pleading about a unique market… it is that the Left is misdirecting from EVERY market being unique. You can’t opt out of the food production market due to Wickard and the ability of the federal government to reach to what you grow on your own land for your own consumption. Water? The EPA has moved far beyond clean water standards for water and now include ‘wetlands’ which are lands that drain to navigable waterways that get wet… which means every drainage basin in the US. Energy? Government reaches everywhere and ‘living off the grid’ means that you are looking at subsidized solar and wind markets with federal kickbacks via the tax code.

Asking the Obama Administration to tell what the limits are to this power ignores that it is the SCOTUS, itself, which broke those limits by making the stuff you do on your own land that does not go to any market something the federal government can stop. Luckily the poor sap Varelli didn’t answer back: ‘You are the ones breaking the limits, so you tell me what they are because NO ONE CAN FIGURE IT OUT BASED ON PAST RULINGS.’

If the SCOTUS decides that Obamacare is ‘a bridge too far’ then the entire chain leading up to it starts to crumble.

When States pushing to get out of the NFA for in-state manufacture and sale of firearms as part of the militia power of the States, expect to see the rest of the supply-chain to the bridge too far go up in flames. Once that is done, the very premise of intrusive government into ANY of the Amendments specifically prohibiting the expansion of power in those areas starts to fall apart.

Such cases will start to challenge the very rationale of having a ‘national market’ because the government doesn’t get to regulate such a market: the States do.

Perhaps the SCOTUS Justices can read about the differences between the United States and the several States and figure this out on their lonesome.

ajacksonian on April 1, 2012 at 6:53 PM

But thanks to Democrats Bill Clinton and Barack O’bama, at least 4 of the SCOTUS Justices see the Constitution as Subject to Change at Will.

Del Dolemonte on April 1, 2012 at 6:13 PM

Don’t forget Gerald Ford, also known as the last Republican to run an all-moderate ticket.

Steve Eggleston on April 1, 2012 at 6:54 PM

Really, would take at least a 7-2 vote on the mandate to shake the left out of the idea that their health care plan would have worked, if it wasn’t for those meddling conservative Justices.

Who care what they think or who they blame -and blame they will?

I don’t recall them asking America or the GOP if they mind
having our freedom taken away?

If it goes down – I would hand out “T”-shirts that read -I’m America and this time “I won.”

Don L on April 1, 2012 at 6:56 PM

Karl on April 1, 2012 at 6:52 PM

Good things to know. Thanks.

I thought they could edit things.

astonerii on April 1, 2012 at 6:58 PM

http://www.breitbart.com/Big-Government/2012/04/01/From-Hugs-to-Hand-Wringing-Watching-the-Elite-Legal-Left-Freak-Out-at-the-Supreme-Court

Del Dolemonte on April 1, 2012 at 6:47 PM

So Obama’s Brain was there; interesting. No one mentioned any hand signals between her and Kagan, I wonder if anyone was watching for communication.

I wouldn’t want to be Virelli when she tears him a new one.

slickwillie2001 on April 1, 2012 at 7:15 PM

Actually read a review of the arguments today that claimed the Supreme Court would be ovesteppng their bounds by declaring the law unconstitutional. Makes me wonder what is taught regarding the separation of powers today. For those liberals who somehow missed the lesson, the Supreme Court’s job is to review laws passed by congress to determine if they breach the constitution. If they deem that the law is an overreach – the law is struk down. Period. It is not the job of the Court to re-write the law for Congress so that it passes muster. Liberals might also want to brush up on the section of the Constitution that specifically makes the power of the Court equal to the executive and legislative power. Somehow they seem to have missed that part too. They have come to believe that the executive branch holds the ultimate power, congress is second and the judiciary is somehow a distant third beholding to the other two branches for any power whatsoever. Sad really…

kjaser77 on April 1, 2012 at 7:32 PM

It looks to me that this has the very real possibility of being decided upon political ideologies rather than constitutional guidelines. If that’s the case, then for me and the majority of Americans it will be less and substandard healthcare for more money. Please tell me I am wrong.

kam582 on April 1, 2012 at 6:03 PM

Because the 4 liberals on SCOTUS will vote in lockstep regardless of the oath they swore upon ascension to the Court, the best we sane people can hope for is 5-4…

I’ll take it, and we will have won the battle, but the war rages on…

Because of the potential to appoint 2 or 3 more Associate Justices, PHBO must be defeated in NO-vember…

The long term fate of the Republic hangs in the balance…

Khun Joe on April 1, 2012 at 7:34 PM

To measure the net bottom line impact of the Affordable Care Act (ACA) on family budgets
in Wisconsin, Families USA contracted with Dr. Jonathan Gruber, Professor of Economics
at the Massachusetts Institute of Technology.
Dr. Gruber’s economic model, built on
publicly available data, allowed us to input multiple policy variables, and to model
individual and employer behavior in response to these policies. The model also allowed
our analysis to look at the economic impact on households at different income levels.

When you google FamiliesUSA and Jonathan Gruber.

journeyintothewhirlwind on April 1, 2012 at 7:55 PM

Small Business Majority turned to MIT economist Dr. Jonathan Gruber to project the effects of three different healthcare reform scenarios on small business profits, jobs and wages. The analysis found that compared with no reform, the scenarios would dramatically improve the situation for small businesses—holding down healthcare cost increases, saving jobs, preserving wages and bolstering profits.

When you google Small business majority and jonathon gruber.

journeyintothewhirlwind on April 1, 2012 at 7:57 PM

MIT health economist Jonathan Gruber has been the go-to source that all the health care bill apologists point to to defend otherwise dubious arguments. But he has consistently failed to disclose that he has had a sole-source contract with the Department of Health and Human Services since June 19, 2009 to consult on the “President’s health reform proposal.”

He is one source for the claim that the excise tax will result in raises for workers (though his underlying study is in-apt to the excise tax question). He is the basis for the argument that the Senate bill reduces families’ risk — even if it remains totally unaffordable. Even Politico stenographer Mike Allen points to Gruber’s research.

journeyintothewhirlwind on April 1, 2012 at 7:59 PM

For those liberals who somehow missed the lesson, the Supreme Court’s job is to review laws passed by congress to determine if they breach the constitution. If they deem that the law is an overreach – the law is struk down. Period. kjaser77 on April 1, 2012 at 7:32 PM

“It is emphatically the province and duty of the Judicial Department [the judicial branch] to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret that rule. If two laws conflict with each other, the Courts must decide on the operation of each.

So, if a law [e.g., a statute or treaty] be in opposition to the Constitution, if both the law and the Constitution apply to a particular case, so that the Court must either decide that case conformably to the law, disregarding the Constitution, or conformably to the Constitution, disregarding the law, the Court must determine which of these conflicting rules governs the case.

This is of the very essence of judicial duty. If, then, the Courts are to regard the Constitution, and the Constitution is superior to any ordinary act of the Legislature, the Constitution, and not such ordinary act, must govern the case to which they both apply.

Those, then, who controvert the principle that the Constitution is to be considered in court as a paramount law are reduced to the necessity of maintaining that courts must close their eyes on the Constitution, and see only the law [e.g., the statute or treaty].

This doctrine would subvert the very foundation of all written constitutions.”

Marbury v. Madison, 5 U.S. 1 (1803)

Wethal on April 1, 2012 at 8:09 PM

ObamaCare – built on a pile of lies, and destined to die. Just like it was designed to do.

GarandFan on April 1, 2012 at 8:29 PM

You see telling people they have to buy insurance shouldn’t cost one hundred billion dollars to implement. You just say “Buy it.”

And it should cost taxpayers a trillion dollars to mandate that everyone buy their own insurance.

You just say buy it.

And then some people don’t buy it, and you fine them, and,

1. you didn’t spend anything saying “Buy it,”

and

2. then you get real money when you collect a fine.

This is not how Obama Care works, it is a huge money grab in 2000 pages plus the Secretary Shall. What are they spending all that money on? And you will still have to pay for your insurance.

How much more free Medicaid is hidden in Obama Care anyway?

Fleuries on April 1, 2012 at 8:57 PM

Sorry, It Shouldn’t cost a trillion dollars…to tell people to buy their own insurance with their own money…

my typo.

Fleuries on April 1, 2012 at 8:58 PM

it does not matter which way the Supremes vote….either way the Dems will find a way to phuck Americans up the ash…bank it.

tractah on April 1, 2012 at 9:26 PM

Marbury v. Madison, 5 U.S. 1 (1803)

Wethal on April 1, 2012 at 8:09 PM

You’re little speech is why the constitution is being subverted….go blow smoke in China.

tractah on April 1, 2012 at 9:31 PM

I still don’t understand…..if he Commerce Clause regulates interstate commerce, how does Obamacare stand? Insurance isn’t offered across state lines–there is no interstate commerce–only intrastate. How can they use the Comerce Clause as defense?

herm2416 on April 1, 2012 at 9:54 PM

You’re little speech is why the constitution is being subverted….go blow smoke in China.

tractah on April 1, 2012 at 9:31 PM

My little “speech” was a quote from the landmark case of Marbury.

Not much point in telling Chief Justice Marshall to go blow smoke in China, as he’s been dead for almost 200 years.

Wethal on April 1, 2012 at 10:09 PM

ajacksonian on April 1, 2012 at 6:53 PM

As usual, you are brilliant. Thanks.

platypus on April 1, 2012 at 11:35 PM

Thanks again, Mitt, for leading the way for 0bama. /s

DannoJyd on April 1, 2012 at 11:50 PM