Thomas More Law Center v. Obama

The Patient Protection & Affordable Care ActUnited States Court of Appeals for the Sixth Circuit

(2011)

Regulations on the Health Insurance Industry◦ Coverage cannot be denied based on pre-existing

conditions.◦ Limitations on rate increases based on risk factors◦ Students can maintain coverage on a parent’s

policy until age 26.◦ Creates online state health insurance

marketplaces for individuals to easily compare and purchase policies.

The Affordable Care Act

The Act mandates individuals purchase a minimum amount of healthcare coverage, or incur a penalty.

Plaintiffs argue the minimum coverage mandate harms them financially.

The plaintiffs argue the penalty for not purchasing the minimum coverage is an unconstitutional tax.

The Individual Mandate

Does Congress have the power to pass a law mandating individuals purchase insurance?◦ Yes – Under the powers granted to Congress

under the Commerce Clause of the Constitution.

Does Congress have power to regulate inactivity using this power?◦ Yes – Congress has a “rational basis” to believe

purchasing insurance, or lack thereof, effects interstate commerce.

Legal Questions

Congressional studies show an individual’s decision to buy health insurance affect commerce as a whole.

The decision to self-insure affects commerce as well.

Self-insured as a class are unable to pay for the services they receive.

Health Care as Interstate Commerce

Wickard v. Filburn (1945)◦ The Supreme Court upheld Congress’s power to

regulate non-economic activity or inactivity when the action has a substantial effect on interstate commerce.

Gonzales v. Raich (2005)

United States v. Lopez (1995)◦ “Those activities having a substantial relation to

interstate commerce, . . . i.e., those activities that substantially affect interstate commerce.”

Prescedence

The U.S. spends largest percent of GDP on health care in comparison to other major countries.

The U.S. spends the most money per capita on health care compared to other OECD countries.

In 2000; the U.S. ranked 37th for quality of care according to the World Health Organization.

Statistics

National Health Expenditures and Their Share of Gross Domestic Product, 1960-2009

Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip).

Dollars in Billions:

5.2% 7.2% 9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.0% 16.1% 16.2% 16.6% 17.6%

Japan

Aust

ralia

Nor

way

U.K

.

Spai

n

Ital

y

Sw

eden

Net

her

lands

Can

ada

Aust

ria

Ger

man

ySw

itze

rlan

d

Bel

giu

m

Fran

ce

U.S

.A.

0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

1800%

810.0% 850.0% 850.0% 870.0% 900.0% 910.0% 940.0% 990.0%1040.0%1050.0%1050.0%1070.0%1110.0%1120.0%

1600.0%

Total Health Expenditure as a Share of GDP,

U.S. and Selected Countries, 2008

As

Perc

en

tag

e o

f G

DP

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.

Individuals are not aware of the cost up-front.

Individuals do not determine their own needs, a physician does.

It’s not easy to compare prices.

Everyone wants the best care, regardless of cost.

Market Failure

Cost-Shifting◦ Treating uninsured patients shifts costs to

insurance companies and households.

◦ Emergency care is more costly than preventative.

◦ In 2008 Congress found providing health care to uninsured cost over $48 billion dollars.

◦ A 2009 study showed 62% of bankruptcies are due to medical expenses. 75% of those are insured individuals.

Market Faliure

Encouragement to participate in the market◦ Increase in market participants will lead to a

decrease in price.◦ Attempting to achieve “near-universal” coverage.

Opening the market to individuals who could not previously afford insurance.◦ State online marketplaces match consumers with

plans they can afford.◦ More consumers purchasing in a group will reduce

cost. Remains private

Goals of Legislation