HealthLawProf Blog

Affordable Care, the Supreme Court, and the Wisdom of Crowds

How will the Supreme Court rule on the challenge to the Affordable Care Act’s subsidies that help millions of lower- and middle-income Americans afford their health care coverage? According to FantasySCOTUS’s court watchers, who have correctly predicted more than 70 percent of Supreme Court decisions so far this year, Obamacare should remain intact.

This result is not surprising. The arguments in favor of the government are much stronger than are those for the challenger. To be sure, the challengers cite to two lines in the Affordable Care Act (ACA) that authorize subsidies for insurance bought on state-operated health insurance exchanges, without mentioning federally-operated state exchanges. Hence, argue the challengers, subsidies should be provided only for insurance purchased on state-operated exchanges, which means in only about 1/3 of states. But other language in ACA indicates that the subsidies are available for insurance purchased on all exchanges. When a statute’s language is ambiguous and there are reasonable alternative interpretations, courts are supposed to defer to the executive branch’s interpretation, not substitute their own interpretation.

And if one looks beyond the specific references to the subsidies to the broader context of ACA and the intent of Congress, it becomes even clearer that the subsidies should stand. Several other sections of ACA assume that subsidies are available on all exchanges, as did members of Congress when they passed the law. Indeed, it wasn’t until nine months after ACA was passed that anyone noticed the language in the bill suggesting that subsidies might be available only on state-operated exchanges.

Of course, these arguments have not persuaded all federal judges, and they are not expected to have persuaded at least three Supreme Court justices. But if precedent prevails, ACA will survive its latest challenge.

[cross-posted Bill of Health and orentlicher.tumblr.com]

Congress, too, is mystified by long-delayed Equal Access regs

Members of the House Committee on Energy and Commerce and the Senate Committee on Finance sent a letter today to Secretary Burwell, urging HHS to issue the Equal Access regulations that have been in limbo since 2011.  This is an important and much-needed call for action in the wake of Armstrong v. Exceptional Child Center, which shut down private rights of action for Medicaid providers seeking fair reimbursement from states in federal courts.  The letter explicitly recognizes the harm that the Court's recent decision will inflict on the Medicaid program, which I've written about on this blog (most recently here) in the context of both Armstrong and Douglas v. Independent Living Center.  

Though the draft regulations were not perfect, and in fact would benefit from putting some real teeth into HHS's review of states' payment decisions on equal access to care for Medicaid beneficiaries, they would at least ensure that HHS is actively overseeing states' payment rate decisions.  Currently, states are able to change rates with very little intervention from HHS, which often involves decreasing payment rates to balance state budgets.  Now that the Court has tasked HHS with enforcing the equal access provision, rather than the providers who HHS admittedly relied on to raise flags about states' low payment rates, HHS must complete the draft regulations.  Perhaps this direct plea from members of key committees will refocus HHS's attention on these important regulations.

Replacing the Affordable Care Act?

With the future of the Affordable Care Act in doubt after last week’s hearing before the U.S. Supreme Court, Republican lawmakers are busily preparing back-up legislation. New options should not be necessary—the government should prevail against those challenging its interpretation of the Act’s premium subsidy provisions. But it is prudent to consider alternatives in the event that the Court rules against the government.

While most of the ideas being floated would do little to bring health care insurance to the uninsured, there is an option that really could expand access to coverage while also containing health care spending. And it could be attractive to Republicans and Democrats alike on Capitol Hill.

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Oral Arguments in King v. Burwell, and thoughts about additional implications for the case

Oral arguments ran over an hour in King v. Burwell today (transcript available here). As many are aware, the question in this case involves whether the IRS appropriately interpreted the ACA to authorize tax credits for insurance policies purchased on both state-based and federally-based health insurance exchanges.  The plaintiffs claimed that the IRS has acted illegally in providing tax credits through federally-run exchanges, and if they are successful, the IRS will immediately cease offering subsidies to individuals who have purchased health insurance in federally-run exchanges.  

Reading oral arguments is always less satisfying than hearing or witnessing them, but reading the tea leaves is still irresistible when justices appear to reveal their positions.  For example,  Justices Kagan, Sotomayor, Ginsburg, and Breyer appeared to agree with the arguments put forth by the United States. Justices Scalia and Alito appeared to agree with Mr. Carvin and the plaintiffs, though Justice Alito appeared open to some of statutory answers being provided by Solicitor General Verrilli toward the end of his argument.  The Chief Justice was almost silent during the oral arguments, and Justice Kennedy raised his favorite topic, federalism, and whether Carvin's interpretation of the ACA can lead to unprecedented coercion of the states, raising a fatal constitutional consequence for what should otherwise be an exercise in legislative interpretation.

This line of questioning is worth considering for a moment.  Readers are probably aware that the doctrine of coercion was merely a theory until the Court breathed life into it in NFIB v. Sebelius.  In that decision, the Court held that the ACA's Medicaid expansion was unconstitutionally coercive because states, in the plurality's view, had to choose between expanding Medicaid to childless, non-elderly adults or losing all of their Medicaid funding.  But, the structure of Medicaid is quite different from the structure of the exchanges.  If a state rejects Medicaid funding, then that state has no Medicaid program within its borders - this form of cooperative federalism facilitated the coercion analysis in NFIB, because the states successfully argued that they could not realistically leave the program.  The exchanges, on the other hand, epitomize 'backstop federalism' - if a state rejected funding to create a state-based exchange, then the federal government would step in (and it did).  

Initially, it was unclear what Justice Kennedy was pursuing in his federalism questioning, because he seemed to indicate that he perceived the Medicaid-style federalism at work in the exchanges.  He later clarified, however, that he was concerned about the ramifications of the challengers' theory, that Congress intended to deny subsidies in states that refused to establish exchanges, thereby obliquely and opaquely threatening states by refusing to offer tax credits to their citizens.  Not only is this interpretation of the ACA plainly wrong, but it would also create a bizarre conditional spending situation where the states did not know they were being threatened until long after they decided to reject federal policy.  Justice Kennedy indicated that this reading of the statute would result in a "serious constitutional problem" that should be avoided, and he is right.  But, he was also skeptical about the actual language of the statute, so the U.S. cannot yet breathe easy.

 One additional observation for now - the impact on health insurance access will be even greater than the parties discussed.  If the IRS ends subsidies for insurance policies purchased through the federal exchange, the current tally indicates that approximately 8 million people will lose the subsidies that make insurance affordable for them.  While they will not be subject to a tax penalty for failure to carry health insurance, they also will not be able to afford health insurance.  That is immediately clear.  But, the ripples will be greater than the 8 million, because some states that have obtained waivers to expand Medicaid are placing their newly eligible Medicaid populations into the exchanges.  If the exchanges experience a death spiral due to increased premiums and loss of covered lives in the risk pool, then the exchanges become a very unstable way to provide Medicaid coverage and likely become unaffordable for states.  Demonstration waivers are supposed to be budget neutral, which would become impossible in plans like Arkansas' if the plaintiffs win this case.  Further, low-income individuals tend to churn between Medicaid and private insurance coverage - but if the insurance offered through federal exchanges is not subsidized, then they will churn into uninsured status, thereby increasing dramatically the number of lives affected by this decision.  

Of course, if the Court upholds the IRS interpretation of the ACA, then we can all go back to waiting for the next challenge to come along.

Health Care Policy by Common Sense?

In announcing the federal government’s approval of Indiana’s Medicaid expansion, Governor Mike Pence invoked common sense in defending his insistence that beneficiaries shoulder a share of their health care premiums. According to Pence, “It’s just common sense that when people take greater ownership of their health care, they make better choices.”

But relying on common sense is not a good way to make health policy. Common sense leads people to incorrectly believe that they are more likely to catch a cold by going out in cold weather or to take megadoses of vitamins that provide no additional health benefit and can be toxic. Common sense also leads physicians down the wrong path. Because lowering blood sugar has been good for the health of diabetics, medical experts recommended tight control of blood sugar levels. But that resulted in an increased risk of death for many patients.

It turns out that our intuitions often lead us astray, making it important that we rely on data from scientific studies to distinguish between good and bad policies. And we know from the data to date that when the poor are required to pay for their health care, they may choose to forgo it, not only when care is not needed but also when it is needed.

Kudos to Governor Pence for bringing the Medicaid expansion to Indiana and for worrying about health care costs. It may turn out that Indiana's cost-sharing is low enough to avoid problems, but rather than trying to contain costs by discouraging patients from seeking too much care, we should try to discourage physicians from providing too much care. Physicians are better able than patients to distinguish between necessary care and unnecessary care.

[cross-posted at Bill of Health]

2012 All Over Again

In 2012, the Supreme Court heard two important Medicaid cases, one in January of 2012 pertaining to payment rates (Douglas v. ILC), and the other in March 2012 pertaining to the ACA's Medicaid expansion (NFIB v. Sebelius). In Douglas, the Court's majority deferred to HHS, allowing the agency to exercise primary jurisdiction over California's Medicaid payment rates and punting the question regarding Supremacy Clause actions by Medicaid providers against noncompliant states. And, in NFIB, the Court decided that Medicaid's modification under the ACA was not Medicaid enough for purposes of Spending Clause doctrine but was Medicaid enough for purposes of the remedy, which was to limit HHS's authority to terminate Medicaid funding for states that refused to expand Medicaid eligibility under the terms of the ACA.  Confused yet? So is the Court, and that's a potential problem. 

Fast forward to 2014, and the Court is once again hearing a Medicaid reimbursement rate case and an ACA case, in the same time frame as 2012, both of which could be very disruptive.  The Medicaid rate case is Armstrong v. Exceptional Child Center, and the weirdly confused oral arguments occurred today. The question the Court granted from the petition for certiorari was whether private parties can enforce the Medicaid Act's equal access provision ("30(a)") against a noncompliant state when HHS has not demanded compliance from the state through payment of adequate reimbursement rates. Armstrong may have far-reaching implications for the Medicaid program, for implied rights of action, and for federal courts' jurisdiction over Supremacy Clause actions, to name a few possible dimensions. Steve Vladeck, author of a very important amicus brief on behalf of former HHS officials, has posted about some of these issues.  Rather than re-hash his fine commentary, or Will Baude's pithy overview for SCOTUSblog this morning, I will quickly share some impressions of today's oral arguments.

First, the justices had no idea how Medicaid works, which matters quite a lot when it may be the vehicle for constitutional change. Justice Breyer, for example, did not appear to understand the difference between the state describing how it would set payment rates and the state actually setting the amount of money it would pay to reimburse health care providers for their services.  Here, Idaho created a methodology for rate setting that was approved by HHS, but then its legislature decided to use a different rate setting methodology tied to the state's budget. Breyer kept using the example of a doctor submitting a bill for $80 when all he could receive was $60, but the example was inapposite. Another minor example is that the prohibition against balance billing was news to the justices. Another example is Justice Alito's hypothetical about states that allow for medical marijuana being sued because feeral law does not permit possession of marijuana, which had no apparent relevance for the Medicaid preemption questions at hand.

James Piotrowski, on behalf of Exceptional Child Center tried to limit the conversation to whether the state actually followed the plan that CMS approved (which it appears Idaho did not). He also tried to explain why a broad-based Supremacy Clause/Spending Clause decision would be both unnecessary and dangerous, and he advocated for a limited ruling that would allow this set of plaintiffs to seek an injunction to force the state to abide by the reimbursement plan that HHS approved.  

The trouble is that the Solicitor General, as he did in 2012, promoted the view that no private rights of action should be permitted. Justices Sotomayor and Kagan quickly called out Mr. Kneedler on HHS’ deep disagreement with this position. Kneedler asserted that HHS does not want these private actions, even though HHS pointedly did not sign the SG's brief, and even though the amicus brief here and in Douglas on behalf of former HHS officials (of all political stripes) clearly explained that HHS both expects and needs private actions to occur. In both cases, the former HHS officials explained that the agency is so woefully understaffed and underfunded that it could never police all of the states' reimbursement rates on a claim by claim basis.

The four dissenters from Douglas were relatively quiet during oral arguments today. In 2012, the Chief Justice authored a dissent that would have denied private rights of action under 30(a) to force states to pay adequate payment rates for equal access to health care providers. I suspect that Roberts, Scalia, Alito, and Thomas remain in the same positions, unless they were convinced that Idaho should have just stuck to the plan and their legislature drove off the rails after CMS approved their rate setting methodology. The real question will be if Kennedy sees this action as some kind of affront to state sovereignty given his affinity for federalism resolutions. If so, then Supremacy Clause actions will be lost for 30(a) litigants, and states will run over Medicaid providers who cannot enforce the adequate payment language in the Medicaid Act. In the very moment that more and more states are negotiating Medicaid expansion under the power given to them by the Court in NFIB, this would be a dangerous precedent both theoretically and on the ground. More to come.

 

Cost Containment and Cost Shifting

With Harvard professors protesting their increased responsibility for health care costs, we are seeing just the most visible aspect of the recurring cycle described in “Tragic Choices.” As Guido Calabresi and Philip Bobbitt observed in that book, society tries to defuse societal conflict by hiding its rationing choices through implicit forms of rationing. Thus, for example, health care insurers relied on managed care organizations in the 1990’s to contain health care costs with the premise that managed care would preserve health care access and quality while squeezing the fat out of the health care system.

But after a time, the public realizes what’s going on and rebels against the implicit rationing policy. Hence, managed care’s effective cost containment strategies, such as limited networks of physicians or primary care gatekeeping, were dumped, and health care costs began to climb again.

What did health care insurers turn to after abandoning serious managed care? Shifting more of the costs of health care to patients through higher deductibles and higher copayments. Insurers didn’t need to identify limits on their coverage because individuals would respond to their higher out-of-pocket costs by hesitating to seek care. Costs would be contained by “market forces” rather than rationing. But the Harvard professors and other Americans are now rebelling against the shifting-of-costs policy, just as Calabresi and Bobbitt predicted in 1978. (Indeed, they even included the shifting of costs as an example of an implicit rationing strategy.)

Of course, cost shifting raises a number of concerns, including the fact that patients often do not distinguish well between necessary and unnecessary care when cutting back their doctor visits in response to cost shifting.

Where do we go from here? The Affordable Care Act includes many provisions designed to reward high quality care, and maybe we’ll see some meaningful cost containment out of them. But more likely, health care insurers will need to find another form of implicit rationing that will work for a while until the public rejects it.

For more discussion of the "Tragic Choices" cycle and the change from rationing through managed care to rationing through cost shifting, see here. For more discussion of the barriers to explicit rationing, see here.

[cross-posted at Bill of Health.]

Hot off the press!

In this article, published today at the Illinois Law Review online, Jessica Roberts and I argue why the Medicaid expansion is a matter of social justice that must be taken seriously in the upcoming gubernatorial elections.  Here's the blurb from the journal:

On the doorstep of its fiftieth anniversary, Medicaid at last could achieve the ambitious goals President Lyndon B. Johnson enunciated for the Great Society upon signing Medicare and Medicaid into law in 1965. Although the spotlight shone on Medicare at the time, Medicaid was the “sleeper program” that caught America’s neediest in its safety net—but only some of them. Medicaid’s exclusion of childless adults and other “undeserving poor” loaned an air of “otherness” to enrollees, contributing to its stigma and seeming political fragility. Now, Medicaid touches every American life. One in five Americans benefits from Medicaid’s healthcare coverage, and that number soon will increase to one in four due to the Patient Protection and Affordable Care Act. Medicaid’s universalization reveals that the program can now be best understood as a vehicle for civil rights. ...

The Problematic Jurisprudence of Halbig v. Burwell

Like the recent Supreme Court decision in Hobby Lobby, the D.C. Circuit’s ruling earlier this week in Halbig v. Burwell is being hailed by conservatives and bemoaned by liberals as a death knell for Obamacare.  Unlike the decision in Hobby Lobby, however the D.C. Circuit’s ruling is not the end of the matter, and many liberals are finding hope in the ruling of the 4^th Circuit the same day, the probability of an en banc hearing in the D.C. Circuit, and the ultimate possibility of a favorable Supreme Court decision.  In an earlier post in HealthLawProf, I decided to take seriously the possibility of damage control from a limited reading of Hobby Lobby.  It is pretty much universally agreed—and I believe correctly—that it is not possible to do similar damage control by giving a limited reading to Halbig v. Burwell.  If the ruling stands, that tax subsidies are not available to people purchasing coverage through the exchanges in the states that are letting the federal government do the work, many important other provisions of the ACA will be untenable, including the penalties for large employers not offering insurance whose employees receive subsidies and likely the individual mandate itself.  But I think it is possible to undermine Halbig in a way not generally recognized by the liberal critics who argue (correctly) that the statutory provision at issue is ambiguous:  argue that the jurisprudence of the majority opinion in Halbig is internally inconsistent.  Here’s how.

Under D.C. Circuit precedent, the court must “uphold an agency action unless we find it to be ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”  So, the question for the court was whether the IRS rule permitting individuals purchasing insurance through federally-run exchanges was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.  In concluding that it was, Judge Griffith’s opinion for the court reasoned that it was not in accordance with law. That is, Judge Griffith found that there was no ambiguity in the relevant provision of ACA that permitted the IRS to interpret the statute as it did.   Here's where much of the criticism takes him on.  But there’s more to say.

In reaching the conclusion that the statutory language is not ambiguous, Judge Griffith purported to rely on a literalist approach to statutory interpretation.  But he did not in fact rely consistently on such an approach—nor could he have done so.  The problem is that in order to formulate the literalist question to answer, Judge Griffith had to resolve several issues in a manner that was not literalist at all.

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Circuit Split in One Day: Tax Credits, Halbig and King (or, The Latest ACA Headache)

This has been cross-posted for a more general audience at ACSblog. Though it contains more background than most healthlawprof readers will need, analysis comes after the jump.

The D.C. Circuit held in Halbig v. Burwell that the IRS cannot provide tax credits to individuals who purchase private health insurance in states with federally-run insurance exchanges, potentially depriving millions of middle and low income Americans access to affordable health insurance.  Improbably, while the blogosphere lit up, the Fourth Circuit held in King v. Burwell that the IRS properly interpreted the Affordable Care Act (ACA) to provide tax credits in all exchanges whether run by a state or the federal government. Members of the Obama Administration immediately declared they will seek rehearing by the D.C. Circuit en banc.  The standard of review for petitions for rehearing is rigorous, but given the importance of the case, and the new circuit split, rehearing is conceivable.  Further, it is not unreasonable to anticipate that the Supreme Court ultimately will grant a petition for certiorari in either or both of these cases. If it is upheld, Halbig could be the most damaging decision in the ACA litigation wars yet.  For those not mired in the details of the ACA and its ongoing legal challenges, here’s why.

 

The ACA attempts to create near-universal insurance coverage by making Americans insurable and by commanding insurers to play by uniform rules.  The ACA was created because, in 2008, one in five Americans did not have health insurance coverage.  To make this number tangible, imagine everyone you know with blue eyes… and now imagine they do not have health insurance.  That’s how many were uncovered, and the lack of coverage was just about that random too.  In the United States, if you don’t have health insurance, you don’t have access to consistent healthcare.  The ACA has clear goals, but it is a muddy scrum of legislative drafting that never underwent a conference committee process, and that imprecision has facilitated the litigation in these cases.

To avoid adverse selection (the problem of free riding), the ACA requires Americans to carry minimum essential coverage or face a tax penalty (upheld in NFIB v. Sebelius); however, if insurance premiums would cost more than 8% of an individual’s income, then no tax penalty will be assessed.  To facilitate health insurance coverage, the ACA created health insurance exchanges, also called marketplaces, where individuals and small groups can purchase health insurance that provides standardized benefits without exclusions for preexisting conditions and other disequalizing prohibitions.  People who earn 100-400% of the federal poverty level are eligible for federal tax credits that assist in paying premiums for private insurance on the exchanges (“premium assistance tax credits,” codified at 26 U.S.C. 36B), increasing substantially the number of people who can afford to purchase private health insurance. 

 States were given a choice to create exchanges with federal funding under ACA section 1311, and if they opted not to, then the federal government would create “such” exchange in the state under ACA section 1321.  Sixteen states and D.C. created their own exchanges before January 1, 2014, so currently two-thirds of states have federally-run exchanges.  This landscape is shifting slightly as some states’ exchanges fail and they move to federal mechanisms, while other states are still eyeballing the federal money available until 2015.  What matters here is that the majority of exchanges were federally-run on the day that Halbig was decided.

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Reading Hobby Lobby narrowly

I write this post with more than a little trepidation; I’m as unhappy as anyone about what the Court made of the Religious Freedom Restoration Act last week.  Nonetheless, given the current state of play, I’ve tried to see whether there are any ways to try to limit the damage. 

This Supreme Court term has featured a striking number of unanimous decisions.  What has drawn unanimity in these cases has been the narrow basis on which they were decided.  Commentators have praised Justice Roberts for his political skills in bringing the Court together—demonstrating that at least one branch of government remains functional and shoring up claims to judicial legitimacy.  Other observers note, however, that the unanimity is only skin deep—and point to the cases in which the Court divided 5-4 as symptomatic.  So suppose we perform a thought experiment on one of the most divisive decisions of this term, Hobby Lobby.  How could the decision have been narrowed?  How should it have been narrowed?  Such an examination is invited by Justice Alito’s statement that the Court’s holding is “very specific.”  It is also invited by Justice Kennedy’s concurrence, which opens with the assertion that the Court’s opinion “does not have the breadth and sweep ascribed to it by the respectful and powerful dissent.  Finally and disturbingly, it is also invited by the observation that the Court has quite quickly, in the case involving Wheaton College, opened wide one of the apparently narrow doors. 

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Why Sen. Elizabeth Warren's Memoir is of Special Interest to Health Profs

I'm a guest over at prawfsblog this month--come visit-and my posting today was about why law professors should be interested in Sen. Elizabeth Warren's new memoir.  You can read the whole pitch below--it includes that it's a funny, warm, well-written and interesting account of a remarkably successful career.  I also noted how important her efforts at fixing student loan debt are as a platform on which to build needed change in higher education.  Finally, she has very interesting things to say about balancing work and family as well as going beyond the classroom to help the individuals affected by the law she studied.   At a recent executive board meeting of the AALS Section on Law, Medicine and Health Care, current chair Dr. Ani Satz noted that there are not many mechanisms for recognizing that kind of service.  (side note--consider yourself warmly invited to the terrific panels our chair elect, Dr. Thad Pope, has organized for us to present and co-sponsor, more information to come).

But for a health prof audience, I'd also point out that she discusses her empirical work (with a team of top social scientists--she didn't do the math herself) that finally demonstrated the major flaw in our employer based health insurance system.  Medical bills turned out to be the leading cause of bankruptcy--and very often among families already insured.  Either their insurance was inadequate (maybe we should get these folks together with the people who are upset they can't keep their "old" plans) or, worse, their illness meant they could no longer work.  Whether the debt came directly from medical bills or from using credit cards and home equity loans to pay the bills--the results were equally catastrophic.

That this actually happens--that medical bills are a leading cause of bankruptcy--is as far as I know not currently disputed.  But I'd be remiss in this context not to point out that as part of the opposition research arising from her running to Senate-the Breitbart blog has made available a series of angry accusations from the 1990's of misconduct about that study.

 It will be a while before we see if the Affordble Care Act is going to do much to fix this problem--and predictions are mixed.  See this as opposed to this.   There's a federal study finding bankruptcies down in Massachusetts following Romneycare.   Common sense suggests that changes like no exclusions for pre-existing conditions and the lift of lifetime caps will make things better (for people with plans bound by those provisions).

But although certainly not usually described as such, Sen. Warren is, if not a Health Law Prof, certainly one whose work is very important to us. 

 

Will the Uninsured Become Healthier Once They Receive Health Care Coverage?

The Affordable Care Act might not bend the cost curve or improve the quality of health care, but it will save thousands of lives, as millions of uninsured persons receive the health care they need. At least that’s the conventional wisdom. But while observers assume that ACA will improve the health of the uninsured, the link between health insurance and health is not as clear as one may think. Partly because other factors have a bigger impact on health than does health care and partly because the uninsured can rely on the health care safety net, ACA’s impact on the health of the previously uninsured may be less than expected.

To be sure, the insured are healthier than the uninsured. According to one study, the uninsured have a mortality rate 40% higher than that of the insured. However, there are other differences between the insured and the uninsured besides their insurance status, including education, wealth, and other measures of socioeconomic status.

How much does health insurance improve the health of the uninsured? The empirical literature sends a mixed message. On one hand is an important Medicaid study. Researchers compared three states that had expanded their Medicaid programs to include childless adults with neighboring states that were similar demographically but had not undertaken similar expansions of their Medicaid programs. In the aggregate, the states with the expansions saw significant reductions in mortality rates compared to the neighboring states

On the other hand is another important Medicaid study. After Oregon added a limited number of slots to its Medicaid program and assigned the new slots by lottery, it effectively created a randomized controlled study of the benefits of Medicaid coverage. When researchers analyzed data from the first two years of the expansion, they found that the coverage resulted in greater utilization of the health care system. However, coverage did not lead to a reduction in levels of hypertension, high cholesterol or diabetes.

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Contraception, Corporations and Conscience

Do corporations have a right to religious expression? As the U.S. Supreme Court considers whether Hobby Lobby is exempted from the Affordable Care Act’s contraception mandate because of its religious beliefs, the Court first must decide whether for-profit corporations even have rights of religious freedom.

While the Supreme Court should impose appropriate limits on the First Amendment rights of corporations, there are important reasons to recognize corporate claims of religious freedom. We often call on corporations to act in ethically and socially responsible ways, and it is important that they do so. If we want corporations to inculcate an ethos of ethics, then we undercut that goal when we deny corporations their ability to act on the basis of conscience.

To be sure, there are nuances. It is much easier to speak of the religious freedom of a family-owned business such as Hobby Lobby than of a publicly-owned business such as General Electric. Moreover, we must draw a good balance between corporate rights and the public welfare (as I’ve argued about corporate speech and public health here).

Recognizing corporate rights of religious expression would not settle the Hobby Lobby case. We still would have to balance the public’s interest in access to contraception with the corporation’s interest in religious freedom. But that is where the debate should lie.

[cross-posted at orentlicher.tumblr.com]

Halbig, King, Coercion, and the ACA Tax Credit Ligitation

Tomorrow, the D.C. Circuit will hear oral arguments in Halbig v. Sebelius.  This is the litigation in which parties hostile to the ACA are challenging the IRS rule that makes tax subsidies available in federally run health insurance exchanges.  Abbe Gluck has posted a deconstruction of the challengers' legislative and historical arguments at Balkinization, including a new post this morning discussing factual and historical inaccuracies in the appellants brief.  I want to address one of those arguments here: the analogy that the health insurance exchanges are somehow like the Medicaid expansion ruled unconstitutionally coercive in NFIB v. Sebelius. This comparison is so far off the mark, it reveals the underlying goal, which is to test the breadth of NFIB's coercion holding at every opportunity and to challenge federal power writ large.

The ACA expanded Medicaid eligibility to everyone up to 133% of the federal poverty level, and the states challenged that expansion in NFIB on the theory that they could lose all of their funding under the terms of the Medicaid Act if states refused to expand. The Court found that the expansion of Medicaid was a change in "kind" rather than "degree" and that the funding for the "old Medicaid" program could not be jeopardized for state refusal to comply with the "new Medicaid" program as envisioned in the ACA. As I have written elsewhere, the Court's unconstitutional coercion analysis was full of holes. One of those holes was nonsensical statutory interpretation, namely that the Medicaid expansion was too different from the Medicaid Act for coercion analysis purposes, but that it was similar enough for purposes of limiting the Secretary's authority to withhold or withdraw state Medicaid funding. But, that authority was not in the ACA (contrary to popular perception), it was in the language of the original Medicaid Act. The new/old Medicaid distinction was statutorily nonsensical, and yet it led to a newly recognized coercion doctrine that limits Congress's power to influence state policy through federal spending.

The Halbig appellants want federal courts to engage in this new coercion analysis by virtue of similarly absurd statutory interpretation. They ask the D.C. Circuit to deem the federal exchange funding offered to states to be struck down as coercive; but, they argue it is coercive not because of the money offered to states to create exchanges, but rather because of the tax credits that would not be available to individuals in exchanges established by the federal government. This causal chain is too attenuated; the claim is basically that the states were influenced not by the federal offer of funds but by the unavailability of tax credits for their citizens in federal exchanges. If this indirect coercion were possible, it is hard to imagine that two-thirds of states would have rejected the option to run state exchanges. It also breaks the link between the federal funding, the condition, and the supposed coercion (which is really a germaneness problem). States do not receive insurance premium tax credits, individuals do. States were offered moderate sums to establish their exchanges, and the loss of that moderate sum did not change the state's status at all. The appellants have mischaracterized the nature of the funding and the result of state rejection of that federal funding.

In addition, this argument can easily be turned on its head. Consider, for example, the Amicus Brief for the Commonwealth of Virginia in King v. Sebelius, recently filed in the Fourth Circuit's version of this tax credit litigation. Virginia argues that it was not aware that its citizens would lose access to tax credits if it rejected the funding to create its own exchange, thereby creating the polar opposite clear notice problem because Virginia believed its citizens would still have access to affordable health insurance if they invited the federally run exchange into the state. (See Kevin Outterson's post on Virginia's brief at The Incidental Economist.)

Clearly, exchange funding is different from Medicaid conditional spending. The ACA offered money to persuade states to participate in the establishment of exchanges, but the federal government will proceed without the states in the effort to establish near-universal insurance coverage. Congress would have dismantled its own goal of near-universal insurance coverage if it denied tax credits in federally run exchanges. This is the hope of the Halbig challengers, that the D.C. Circuit will dismantle the ACA's tax credit structure for federal exchanges and gut access to health insurance. Unfortunately, if they succeed, real people will be harmed.

Hot Off the Press: Medicaid Matters Symposium

I am pleased to share the Medicaid Matters symposium issue that has just been published in Volume 102, Book 2, of the Kentucky Law Journal.  This special issue includes articles from Brietta Clark, Mary Crossley, John Jacobi, Elizabeth Weeks Leonard, Laura Hermer (with Merle Lenihan), Sallie Sanford, and Sidney Watson (and me).  This is an excellent collection of thoughtful articles that resulted from a day-long workshop on Medicaid in the post-ACA world.  Many thanks to the participants in the workshop, and I hope you will enjoy the fruits of their labors!

Using Fear of Lawyers to Train Medical Students is Costing a Lot of Money!

The running joke of the Disney Monsters,Inc. movies is that there really are monsters in little kids' closets, but they aren't dangerous.  Too often in medical education, lawyers and law suits are used as "monsters in the closet" to scare medical students into paying attention.  This, I suggest, has become very expensive.   A recent post in the Harvard Bill of Health blog by former medical student Deborah Cho quite accurately describes how little accurate information medical students get about the law--and how much they come to dislike and mistrust lawyers.   Although I haven't seen research tracking how often the phrase "or you will get sued" is used in instructing medical students, but based on my experience it may be among the most common phrases they hear.  Without even addressing the vast literature suggesting that postive instruction is at least as instructive as negative, I contend we just can't afford the malpractice bogeyman.

The question now is what can be done about?   Tort Reform won't solve this problem--because it will never eliminate the possibility of being sued.  But maybe a change in medical education will.   The first step towards change is to realize that words and attitudes matter--drumming in a constant fear of being sued cannot help but affect how doctors see their work.

 

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Continued Skepticism re "Wellness Programs"

A big part of the job of being a Health Law Prof is to help students understand the intersection of the many legal specialties that comprise the big tent of "Health Law."  Wellness Programs are a good way of doing that because one of the key features of the Affordable Care Act is the flexibility it provides employers to link the cost their employees pay for health insurance with the individual employee's participation in a company sponsored "welleness program."  Here's an article I wrote explaining how PPACA went about doing that.  Here's a link to the Department of Labor's summary of the current rules and a good overview by the law firm Nixon-Peabody.  This report from Rand is an overview of what these programs are and how companies have increasingly fallen in love with them.   At this point just about every insurance company is offering to create one--here's some information from Aetna.  

The problem is, there's very little evidence that these programs do anything to demonstrably improve health (whatever that may mean).  And quite a bit that they may promote many different kinds of social injustice.

 This article in the Harvard Business Review does a great job describing the kinds of programs that are now descending on employees and how they are creating disatsifaction without any scientifically supportable improvement in "health."

There is also a growing literature suggesting that these programs may disproportionately discourage workers who employers aren't that unhappy to see go--but might not legally be able to actually fire.  Here is some very interesting testimony by Jennifer Mathis Director of Programs, Bazelon Center for Mental Health Law
On Behalf of the Consortium of Citizens with Disabilities.

Michelle Mello at Harvard has coined the term "life-style discrimination" to describe the ways Wellness Programs may target individuals employers may perceive as undesirable because they are obese, smoke or have other non-job related characteristics.

Studying Wellness Programs--and the issues they raise--can be an accessible entry point for students who can easily be intimated by the regulatory complexity of health law and can also be a bridge to understanding how fundamentally the Affordable Care Act has affected the way health care will be paid for and delivered as our students begin their careers in advising those struggling to implement these new regulations.

 

 

 

 

Pit Crews with Computers: Can Health Information Technology Fix Fragmented Care?

I recently posted a new piece that uses technology as a lens for examining some of the fragmentation and coodination problems exhibited by the healthcare system. Here's the abstract.

Fragmentation and lack of coordination remain as some of the most intractable problems facing health care. Attention has often alighted on the promise of Health care Information Technology not least because IT has had such positive impact on many other personal, professional and industrial domains. For at least two decades the HIT-panacea narrative has been persistent even though the context has shifted. At various times we have been promised that patient safety technologies would solve our medical error problems, electronic transactions would simplify healthcare administration and insurance and clinical data would become interoperable courtesy of electronic medical records. Today the IoM is positioning HIT at the center of its new “continuously learning” health care model that is in large part aimed at solving our fragmentation and lack of coordination problems. While the consensus judgment that HIT can reduce fragmentation and increase coordination has intuitive force the specifics are more complicated. First, the relationship between health care and IT has been both culturally and financially complex. Second, HIT has been overhyped as a solution for all of health care’s woes; it has its own problems. Third, the HIT-fragmentation solution presents a chicken-and-egg problem — can HIT solve health care fragmentation and lack of coordination problems or must health care problems such as episodic care be solved prior to successful deployment of HIT? The article takes a critical look at both health care and HIT with those questions in mind before concluding with some admittedly difficult recommendations designed to break the chicken-and-egg deadlock.

The AOL Babies: Our Healthcare Crisis in a Nut

Where does one start with AOL CEO Armstrong's ridiculous and unfeeling justifications for changes in his company’s 401(k) plan. Cable TV and Twitter came out of the blocks fast with the obvious critiques. And the outrage only increased after novelist Deanna Fei took to Slate to identify her daughter as one of the subjects of Armstrong’s implied criticism. Armstrong has now apologized and reversed his earlier decision.

As the corporate spin doctors contain the damage, Armstrong’s statements likely will recede from memory, although I am still hoping The Onion will memorialize Armstrong’s entry into the healthcare debate (suggested headline, "CEO Discovers Nation's Healthcare Crisis Caused by 25 Ounce Baby”). But supposing (just supposing) your health law students ask about the story in class this week. What sort of journey can you take them on?

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