Health Care Mandate and the Commerce Clause (Part 2)

Health Care Mandate and the Commerce Clause

The patient protection and affordable care act purchase mandate

A four-part series on the relation and effects of the Commerce Clause to Health Care

By: Thomas W. Loker

The following is the second segment of a four-part series where author, Tom Loker, explores the impact of the Commerce Clause on Obama-Care.

Part Two: Simple Issues—Complicated Problem

In the prior segment, Clear Words – Muddy Intent, we discussed the evolving debate over for what most people on the surface seems a simple, clear and concise statement as to where the federal branch of government’s responsibility related to commerce begins and ends.  The simple and direct interpretation that most laypeople draw from the Commerce Clause—which is an “enumerated power” in the United States Constitution (article I, section 8), that provides that Congress has the power ” To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”—is that when commerce transpires among the states, as in between one or more states, then the federal branch is responsible to provide regulations that control such commercial transactions, and when commerce is between citizens inside of the boundaries of a state then it is the state’s responsibility to regulate those transactions.  This seems clear to most people but…

Over the past several hundred years, smart men, (perhaps sometimes not-so-smart) often trying to secure honorable goals, (OK, sometimes selfish goals) for the common good, (yes, sometimes not for the common good at all) have parsed, prodded, twisted and convoluted these sixteen simple words into marvelous interpretations that confound the average persons intellect.

Wickard v. Filburn: A broad reach?

Filburn was growing more wheat than allowed—even though it for private consumption. He was fined and ordered to destroy his crops by the federal government.

The historical applications of the authority as interpreted under the sixteen words in this clause have ranged from the sublime to the ridiculous.  In Wickard v. Filburn, 317 U.S. 111 (1942), the U.S. Supreme Court upheld a lower court’s decision that increased the power of the federal government to regulate what  would seem to most a state-based, perhaps private activity.  Roscoe Filburn was growing wheat for his own consumption.  As part of the “New Deal” legislation, rushed through congress to ameliorate the effects of the Great Depression, The Agricultural Adjustment Act of 1938 limited the area in which farmers could devote to wheat production. Filburn was growing more wheat than was permissible—beyond the limits even though it was not for sale. Filburn intended it for private consumption. Ultimately, he was fined and ordered to destroy his crops.  The courts found that because Filburn was growing more wheat than allowed, his actions somehow reduced the amount he would have purchased on the open market. Simply because wheat was traded nationally, the courts maintained Filburn’s acts affected interstate commerce which meant that he was under the federally regulated mandate of the court’s interpretation of the Commerce Clause.

The Government’s Unfettered Access

It seems that it is a difficult and dangerous stretch to view the Commerce Clause as a law that allows the federal government unfettered license to restrict individual freedoms in the same manner as the restrictions against Filburn. By nature of the argument as upheld in Filburn, any self-reliant activity could be determined to impede commerce in that if I,  as an individual grow it, hunt it, or fish it, then I am not purchasing the item from others and therefore am affecting interstate commerce.  I further find the argument specious, in that there is no basis to determine, other than abject supposition, that should Filburn have not grown his wheat himself that the wheat would have been purchased from an interstate supplier instead of an intrastate source.   More likely in keeping with the times, he would have simply bartered for the un-grown grain in the first place.  I believe this is a very dangerous expansion of federal powers that directly and potentially infringe permanently upon Filburn’s liberties which, in the end, caused him economic harm.

What’s the Logic?

If this remains the modern interpretation of the Commerce Clause, then it is would be clear that the mandate to purchase health care, as proscribed by the PPACA, strictly by the historic definition as decided in Wickard v. Filburn is therefore constitutional because any commerce between parties, even intra-state, can affect the purchase of goods and services inter-state.  Further, using the same logic, any affect that the lack of purchase could have on the cost of care to others within a state to offset the cost to the individuals supported by the state’s health systems, including private insurance, Medicaid, community based etc., would also become subject to the federal regulation under the commerce clause.

There are at least two flies in the ointment to these arguments.  One is the obvious one as discussed in the Wickard v. Filburn case, which is that it is a large conceptual leap for most normal people to see how the actions that Mr. Filburn engaged in should have been subject to federal intervention in the first place.  But the second, and more interesting, argument is based on the circumstances of how insurance is actually provided to citizens of the states in the first place, and the resistance by some in the federal government to actually have a national insurance market at all.

Crossing State Lines?

Insurance within states today is subject to regulations that exist in, and are specific to, each state.  Health care provided within one state is subject to the health regulations of that state.  There is little, to no, transportability of an insurance policy for a worker in Pittsburg, Penn. to have the same policy in San Francisco, Calif.  Recently, during a congressional hearing on tort reform, one democratic congressional representative (and noted constitutional lawyer) remarked—and I will paraphrase here—that since health care was not provided in a manner that it crossed state lines, that in every case he was aware of such care was provided within the jurisdiction of the state, and since he had never heard of care being provided in any hospital where the patient receiving care, or the hospital itself for that matter, existed simultaneously in two states at the same time, therefore, in his learned opinion, tort reform was a state’s rights issue and not subject to federal jurisdiction under the commerce clause.   So how is it that the foregoing statement can be factual and true, while at the same time Wickard v. Filburn is also true?  One of them simply must be a dangerous canard!  But the key question is which one?  This is THE question that today we, the people, must decide as the outcome of this decision will either fundamentally empower us or further restrict our life and liberties.   This must be our collective choice alone.

In the next installment, we will look at other regulations and decisions by the courts that further confound this vital determination, and most importantly, further expand the gulf between the ordinary ability of a normal person to read and understand common language and the legal wrangling and interpretations that follow.

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On Tolerance

Tol·er·ance – noun

[tol-er-uhns]

Common Language

  1. A fair, objective, and permissive attitude toward those whose opinions, practices, race, religion, nationality, etc., differ from one’s own; freedom from bigotry.
  2. A fair, objective, and permissive attitude toward opinions and practices that differ from one’s own.
  3. Interest in and concern for ideas, opinions, practices, etc., foreign to one’s own; a liberal, undogmatic viewpoint.
  4. The act or capacity of enduring; endurance: My tolerance of noise is limited.

Medicine/Medical, Immunology.

  1. The power of enduring or resisting the action of a drug, poison, etc.: a tolerance to antibiotics.
  2. The lack of or low levels of immune response to transplanted tissue or other foreign substance that is normally immunogenic.

“…it is thus compromise on the basis of tolerance for others’ opinions that lead us to good solutions….” – Benjamin Franklin

It is amazing, that such a small word can reflect so much of what all of us are actually wrestling with today! During the recent debates and congressional committee meetings working on ObamaCare, the “Us” vs “Them” attitude that was displayed kept bringing me back to this simple word and the realization that, for a country founded on tolerance, we had seemingly lost our way.

In an attempt to reinforce what I thought were the lessons drilled into me by my father as to the meaning of tolerance and our fundamental obligation to extend tolerance so we can get such in return; I went to reading. Reading things like the writings of Thomas Paine, Thomas Jefferson, and others of our founding fathers. I wanted to see if the teaching of my father, and my often flawed memory or interpretation of them, were in fact accurate. Lo and behold, and seemingly for once in my life, they were.

But Houston we have a problem! If these are accurate understandings of the meaning, and if my father was correct that the act of tolerance is likely the single most important ingredient of our counrty’s success and our main obligation as a people, then what the heck happened? How have we moved to the point where the only thing we tolerate today is intolerance? How have we gotten to the point that anything that could possibly offend anyone else is something that becomes prohibited. This is in fact the textbook definition of intolerance! For one to tolerate something, one must not like it in the first place.

Mark Twain

For you to exercise tolerance, you must object to the action of another – morally, ethically, religiously, what have you – and still allow the other party, or parties, to continue their expression or action. As I have studied this more over the past few months, I began reading the recently released Autobiography of Mark Twain, Volume 1, from the University of California Press. In this excellent read, I found an interesting observation from Mr. Twain, dictated to his scribe January 24, 1906, in a section called, The Character of Man.

“All the talk about tolerance, in anything or anywhere, is plainly a gentle lie. It does not exist. It is in no man’s heart; but unconsciously and by moss-grown inherited habit, drivels and slobbers from all men’s lips. Intolerance is everything for one’s own self, and nothing for the other person.

The main-spring of man’s nature is just that – selfishness. Let us skip the other lies, for brevity’s sake. to consider them would prove nothing, except that man is what he is – loving, towards his own, – his family, his friends, – and otherwise the buzzing, busy, trivial, enemy of his race – who tarries his little day, does his little dirt, commends himself to God, and then goes out into the darkness, to return no more, and send no messages back – selfish even in death.”

Now I am not sure who is correct… Clearly, from reading the words of our founding fathers they felt it was very important for America to be successful both in succession from England and as a future nation. We needed to become one people, not a nation of singularities – not singularities of religions, or singularities of cultures, or singularities of language or behaviors. We had to all become Americans and develop an American identity – first and foremost. Thomas Paine was one of the people who was enlisted to help establish this identity. But by 1906, a relative drop in the bucket of time, Mark Twain was already observing, to his own dismay, that man had again reverted.

So where are we today, really? We face may issues and problems of historic proportions – in American terms and timescale. Can we defeat the current obstacles, most of our own creation, if we don’t again become a nation united as one? I am not advocating an abandonment of cultural, racial, or religions identity! I am just asking, can we get where we need to go, if we don’t again find tolerance?

I would submit, the problem we have in all of our governmental bodies today – federal, state and local – is that we have lost our tolerance. Benjamin Franklin said, “…it is thus compromise on the basis of tolerance for others’ opinions that lead us to good solutions….” Perhaps we need to revisit this concept – and soon!

Social Forum: The Pharmaceutical Industry – Round Two

Bruce Hurwitz Presents is a live 30-minute call-in program. Shows fall under four different segments: Ph.D. Forum introduces listeners to doctoral and post-doctoral students and their cutting-edge research in the arts, … sciences, or humanities; Business Forum features guests from the for-profit and non-profit sectors discussing their careers and professions; guests on Social Forum discuss current events and trends, especially pertaining to employment issues; and Oral Essays features presentations by Bruce Hurwitz on topics pertaining to employment, careers and business. Bruce is the president and CEO of Hurwitz Strategic Staffing, Ltd., a New York City-based boutique executive recruiting firm. A recognized expert on employment and career issues, he has been cited in well over 160 articles nationally and internationally. He holds a Ph.D. in International Relations from the Hebrew University of Jerusalem, Israel, and has over 80 academic and journalistic publications on topics ranging from international law to career advancement.

Social Forum: The Pharmaceutical Industry – Round Two is todays program.  Tom had the privalege to be Bruce’s guest today.  Check it out!
www.blogtalkradio.com/bhp/2011/06/27/social-forum-the-pharmaceutical-industry–round-two

Health Care System: Fact or Fiction?

Recently, I have been having a number of discussions with physician reviewers of my upcoming book, “The History and Evolution of Health Care in America.” Today, I was reading an excellent article, “Highlights from Doctors 2.0, ” published by Tim Lloyd and it has again driven home one of the points I make in my book.

I think one of the underlying issues facing doctors today, is that the solutions that are being offered to “cure” the failing business models most physicians face, do not affect the underlying issues in our current system. For these solutions to work – the application of technology in the areas of EMR, PHR and E-prescription chief among them – they would actually need to address the flow of money through the supply chain. They don’t!

I just don’t think we have a Health Care “System“. We have a disjointed, disconnected (even with today’s technology), disaffected, and intra-competitive series of care providers, care facilitators, and payers/sponsors of care. In every other industry the supply chain for goods and services has evolved to be surprisingly similar both in methods, number of steps in the chain, relative percentage of costing at each step etc… Health care, is one of the true anomalies. In every other chain, please pardon the analogy, each participant – from the raw materials producer, to the manufacturer, to the distributor, to the seller, to the servicer – prey on the price paid by the end consumer of the goods or services. In other words all participants’ margin flows backwards from the end point – the purchaser.

In our current health care mess, this is not the case. Each participant in the chain, prey on each other’s margin in a system where the relationship between invoice price (published billing rate) and reimbursement are specious and arbitrary and none in the chain can predict their income, nor most of their expenses. Users of the services (patients) can’t tell, nor do they care, what the cost of the service is. And, the long term effect of the massive inflation of the currency in circulation since 1971 (when we removed ourselves from the international gold standard) has led to a disproportionate subsidy and inflation of housing and health costs.

Later in another post, I will take a look at the issue of how and why the allocation of all the new currency created since 1971 has disproportionately affected housing and health care costs. Suffice to say that projections of the cost of care and housing based on the run rates prior to the elimination of the gold standard would have predicted a flatter curve than we have experienced. Further, the actual curves for these two industries are almost a point for point match to the Average M3 curve in the above chart while, other industries have little to no correlation.

There have been a number of issues that have affected health care costs, and insurance premium costs. None of them have to do with unfair profiteering. Looking at the relative profits across all the current crop of blamed suspects, none of them; pharma, insurance companies, hospitals, doctors, etc., are any more profitable today than they ever have been and in actuality many are no longer profitable at all. So where has the money gone? In another future article, I will be examining and attempting to explain this phenomenon. Is it perhaps that, we have simply inflated our economy and not really increased the value of our country’s assets 20 times since 1971?

Clearly, our health care non-system is broken and must be fixed. Until this is fixed, in my opinion – the rest of the discussions are moot.

Health Care Mandate and the Commerce Clause (Part 1)

The first of a four-part series on the relation and effects of the Commerce Clause to Health Care

The following is a four-part series intended to provide a historical perspective as to the exhaustive debate over the constitutionality of the health care mandate. Part One, “Clear Words—Muddy Intent” explains the Commerce Clause—its origins and purpose and what our fore-fathers intended with it; Part Two, “Simple Issues—Complicated Problems” delves into “New Deal” legislation and the impact of the Willard vs. Filburn Supreme Court case as well as the Agricultural Act of 1938 and how all those legalities intertwined with the Commerce Clause; Part Three, “Sliding Down the Slope,” explores the Trademark and Sherman Acts and its effect on the patent medicine manufacturer’s industry and further discussion of how these two acts, and court cases addressing them, have created more federal oversight and control. In the final segment, Part Four, is a discussion of how Obama-Care is yet another legislative act that allows Congress to enact legislation that states and individual’s rights regarding the intent of the Commerce Act.

Part One: Clear Words—Muddy Intent

The Commerce Clause has defined the balance of power between the federal government and the states.

There has been a constant battle in application of the Commerce Clause between the need to protect consumers from abuse and the obligation of individuals to exercise personal responsibility

It has a direct impact on the lives of ordinary Americans beginning with the enactment of the Interstate Commerce Act of 1887 and the Sherman Anti-trust Act of 1890. According to Article 1, section 8 of the United States Constitution, this is an “enumerated power” in the United States Constitution (article I, section 8), provides that Congress has the power “To regulate Commerce … among the several States …” In response to rapid industrial development, Congress used the Commerce Clause to justify a new era of federal regulation, beginning with enactment of the Interstate Commerce Act in 1887 and the Sherman Antitrust Act in 1890. The outer boundary of Congress’s use of this power over the states has been the subject of a seemingly never-ending – and sometimes heated – debate. The Commerce Clause has defined the balance of power between the federal government and the states. It has a direct impact on the lives of ordinary Americans.

Speaking strictly as a layman, I find it very difficult to justify the argument that the mandate in the Patient Protection and Affordable Care Act (PPACA), so called “Obama-Care,” to purchase some form of health insurance is consistent with the intention of the Commerce Clause. I am neither a constitutional law scholar nor even a lawyer. However, I am well read and I had the benefit of growing up around a family law practice. Like some, whose fathers ran a hardware store, or whose family was in the grocery business, my understanding of the law comes mostly from my grandfather who was a judge, and also as a result of long hours after school following the explicit instructions of my father, or numerous uncles; gathering research, or hanging out in the record room of the old county courthouse documenting title transfers or other such legal recordings.

Regardless, in my everyman’s view and due to significant reading, I still am stymied at how one can assume the intention of the Commerce Clause was to use it to regulate such a wide array of activities. In fact the argument itself is not only counterintuitive; it has been very difficult for the courts to maintain a consistent view of federal power under this clause almost from the time of its original writing.

Simply Constructed

The Commerce Clause is exceedingly simple in construction. To most readers, it comes across as straight up in its potential interpretation, yet like much of the practice of law these days, interpretation is more driven by the desired outcome than the original intent of the wording.

There has been a constant battle in application of the Commerce Clause between the need to protect consumers from abuse and the obligation of individuals to exercise personal responsibility. Spending considerable time reading various papers written by the framers of the constitution, it is clear to me at least that the founders were attempting to solve relatively simple issues.

One State Over Another

As the U.S. was forming out of the chaos that was a byproduct of the Revolutionary War, the founders were wrestling with a number of problems that had been endemic in the colonies and in the end decided to only provide a set of very limited controls for federal exercise. The framers wanted to empower the federal government to act in a central fashion in negotiations and commerce relations with foreign nations in order to not have one state undercutting another state in the impost of duties, taxes or discounted prices. Second, there was an intention to restrict the ability of a state to impose interstate duties and taxes. It can be persuasively argued that part of the role of the Commerce Clause that the framers saw as necessary, but that does not seem explicit in the language, included a role for the federal government to play in adjudicating the differences arising between actions under disparate laws between the states in order to provide continuity for interstate issues as to fair and equitable protections of the individuals rights and freedoms. These intentions do not readily translate to the many arguments currently defined in expanding federal reach. For instance, in the phrase “To regulate commerce… among the several states…” they specifically use the term “among,” not between the states. Nor does it say between the citizens of the states, nor among the citizens of the states. In truth, it seems to become even clearer to me and others that if the framers had intended to empower the federal government to regulate commercial relationships between the citizens of one state to the citizens of another, or within a single state, these powers would have been specifically said so in pointed and specific language as one of the few federal enumerated powers.

Who has the Authority?

Therefore, the basic issues over the constitutionality of the PPACA mandate to purchase insurance, hinges on whether or not the original intention of the framers of the constitution was to give the federal branch, as opposed to the various state governments, the authority to regulate transactions between the citizens inside the borders of a state. Regardless, of whether or not you believe the framers intended to only have the federal branch control the business between the states or not, there have been a series of decisions and additional legislations that have significantly muddied the water of their intentions in regard to what is, or is not, a simple and clear statement. We will be discussing this in more detail in the next article.

Health Care in America: Where We’ve Been, Where We Are, and Why Health Care Needs More Reform!

Tom Loker has written a book that takes the reader on an intriguing journey as he/she walks along with Loker from the inception of this country to learn about the behind-the-scenes goings on with health conditions, health maladies, health remedies, and evolving health care reform. Beginning with the state of health when the Pilgrims first hit that “rock” to the current day when Congress locked horns, Loker stuns the reader with knowledge never Continue reading