Historical Imperative: A History of Healthcare Litigation

The following is a historical analysis of government intervention in  America’s healthcare system, along with subsequent litigation, from the beginning of the Twentieth Century to the present date. Atypical of most of my essays, this one focuses almost exclusively on the history of the issue itself without a great deal of philosophic depth. The reason for this is that the original form of this essay was written for a class on U.S. legal history, and the personal prejudices of my professor made such kinds of analysis impossible without severe penalization. However, this essay has been modified from its original format both to make it more palatable for readers and to express my personal sentiments on several issues within this essay. Though nothing within this essay conflicts with the principles of capitalism, I have inserted links to other articles on The Mendenhall throughout the essay where I believe more elaboration would have been appropriate in a more philosophic context. I have also provided a philosophic addendum at the conclusion to briefly summarize my thoughts on this issue.

After well over a year of appeals and conflicting rulings, the Supreme Court of the United States agreed on November 14th to grant certiorari to challenges to President Obama’s Patient Protection and Affordable Care Act. The challenge regarding the bill’s so-called “individual mandate” clause, spearheaded by Florida and joined by twenty-five other states and the National Federation of Independent Businesses, reached the High Court earlier this week, around two years after the Affordable Care Act was passed in March of 2010. Even so, the history of this challenge extends far beyond the existence of the bill itself.

The Origins of National Healthcare and the Lochner Era

Despite the Supreme Court constitutionalizing the “right to contract” in Lochner v. New York (1905) and the resulting era of fairly consistent economic liberty, public sentiment toward the government’s role in the economy began to shift during the Progressive Era. Just one year before Joseph Lochner received a favorable ruling in his challenge to the New York Bakeshop Act, the Socialist Party in the United States began arguing in the opposite direction. Though at a time prior to even the existence of the Food and Drug Administration, the Socialists initiated their push for compulsory, universal health insurance. The Socialists, diametrically opposed to the laissez faire ideologies of the Lochner Court, began arguing that healthcare was a right of all men and, regardless of one’s wealth, that everyone should receive the same healthcare.

President Theodore Roosevelt

It was not until 1912, however, that such endeavors took the spotlight in American political discourse. After losing the Republican Party nomination in a primary challenge to President Taft, former President Theodore Roosevelt started a third party movement in his bid for the presidency. Called the Progressive Party (more commonly known as the “Bull Moose Party”), Roosevelt’s platform explicitly included universal healthcare. Among other Progressive topics including “social and industrial justice,” the “high cost of living,” and “conservation,” Roosevelt’s Progressive Party called for the creation of a “single national health service” designed to manage the health industry (1). A notable critic of Lochner (calling the Justices who made the ruling “a few worthy men of wrong political philosophy on the bench”(2)), these positions were not unusual for Roosevelt. And, though he eventually lost the election to Woodrow Wilson, the Democratic nominee, his was not the only push for healthcare reform in the Lochner Era.

Three years later in 1915, the American Association of Labor Legislation offered its own version of healthcare reform. The AALL, a progressive group, focused largely on insurance reform rather than the general regulation of healthcare practices as Roosevelt did. The proposed bill, which they introduced to several state legislatures, would extend health coverage to individuals making $1200 a year or less (approximately $25,500 a year today) and would spread the costs between the employees, employers, and the government (i.e., the taxpayers).

Like many reform movements in this period, the goal of the AALL was not to abolish “capitalism” (as in the Socialist Party), but to “reform” it. Organizations such as the AALL, dissatisfied with what they saw as unnecessary consequences of laissez faire capitalism sought “solutions” through governmental avenues. Essentially, they wanted all the benefits of capitalism without allowing for the existence of those conditions which make said benefits possible or, in simpler terms, they wanted to have their cake and eat it too (Marx himself had a special name for these kinds of individuals: “bourgeois socialists”).

The 1915 proposal initially received support from the American Medical Association, though the organization later dropped its support over a disagreement about how physicians should be paid. At the same time, the American Federation of Labor argued staunchly against the bill, denouncing the perceived paternalistic practice of compulsory health insurance, though this was likely little more political move to protect the relevancy of unions in an era in which labor movements lacked any special legislative status. The bill was also unpopular among state healthcare agencies and private insurance companies for various reasons.

With the onset of WWI, the AALL bill and other kinds of insurance legislation were sharply criticized as being examples of German paternalism, and correctly so – the philosophies which led to these political conclusions, from Kant and Hegel to Marx and Engels, were distinctly German, though this is not why they were abhorrent. The generally passive presidencies of Warren Harding and Calvin Coolidge properly discarded healthcare as an issue which fell beyond the purview of governmental authority, and it was not until FDR and the New Deal that insurance regulation began in full force at the federal level.

The New Deal to the New Millennium

President Franklin Delano Roosevelt

After the stock market crash of 1929, the majority of Americans were ready to wrest control of the federal government from the hands of the Republican Party in favor of the Democratic Party, completely ignoring the vast disparities between the practices of the Republican Harding and Coolidge Administrations and the presidency of progressive Republican Herbert Hoover. Though the New Deal included various kinds of unwarranted government intervention into the economy, one of the first to address something reminiscent of a universal insurance system was the Social Security Act of 1935.

The Social Security Act established a system in which employees and employers pay taxes to fund benefits for retirees, half by the employees and half by the employers. At a time in which the life expectancy for males in the United States was sixty years of age, the program was intended to act as a sort of supplementary end-of-life insurance for those at age sixty-five and older (reduced benefits could and still can be received at age sixty-two). By no means does this justify the existence of the Social Security system – it is unjustifiable. However, this does demonstrate a dramatic shift in public attitudes toward Social Security between its inception and the present date. As Americans continued to live longer, they demanded more: Social Security ceased to be a supplement for individual retirement plans and instead became a replacement for individual retirement plans. Evil though it is that the government would steal from a man with the explicit intention that he never see his money again, and fantastic though it is that Americans duped the government by outliving its expectations, many Americans have unfortunately ceased to view Social Security as a violation of the government’s legitimate function.

But before arriving at our nation’s present situation, the Social Security Act faced a couple of noteworthy challenges in court. The first of such challenges arrived in the Supreme Court in 1937: Helvering v. Davis. Just a few months before ruling on Helvering, the Court decided West Coast Hotel Co. v. Parrish (1937) which overturned Adkins v. Children’s Hospital (1923) and ended the thirty-two-year reign of the Lochner era. Now that the Court looked more favorably upon government intervention in the economy, it should come as no surprise that the Supreme Court ruled that the Social Security Act was constitutional, much to the chagrin of George Davis. Davis, a business owner, sued the federal government on the grounds that the requirement placed upon him by the Social Security Act to pay into the insurance program for his employees was an unjust expansion of the government’s power.

Justice Benjamin Cardozo, author of the 7-2 majority opinion, disagreed. In his opinion, Justice Cardozo declared that the Social Security Act did not, in fact, set up an insurance program but that it instead set up a type of welfare for which the government could lawfully tax (3). Basing his opinion largely on Article I, Section 8, Clause 1, Justice Cardozo stated that “the concept of general welfare [is not] static” and was therefore open to interpretation by the Court (it is not – “general welfare” is qualified by the immediately subsequent clauses in the same section, as per Madison’s own words in The Federalist, but such logic meant little to Justice Cardozo and his colleagues) (4). Interestingly, the Court struck down similar legislation in United States v. Butler (1936) on the grounds that the processing of taxes in the 1933 Agricultural Adjustment Act violated the Tenth Amendment. The distinction between Butler and Helvering, asserts Cardozo, is that, in Butler, the tax was merely “a means to an unconstitutional end”(5) – in Helvering, the Court forwent its role as defenders of the Constitution and of the liberties enumerated therein and ruled that the end was somehow valid, and so too the tax. How was the end valid? Supposedly, it served the “public good.” Why does that justify violating individual liberty? Blank out.

Even so, Helvering was not the only challenge to the Social Security Act of 1935. In 1960, another challenge reached the High Court in the form of Flemming v. Nestor. For nineteen years, Nestor paid Social Security taxes and became eligible to receive benefits in 1955. In 1956, Nestor was deported for having been a member of the Communist Party and his Social Security benefits were terminated. Because of the money Nestor had paid into the Social Security System, he argued that there existed a contract between him and the federal government and that by denying his benefits, the government had violated that contract.

The Court again sided with the government, arguing that the contract from which Nestor asserted his right to receive Social Security payments did not exist and, as such, the contractual right to receive said payments also did not exist. The Fifth Amendment, which forbids the taking of private property for use by the public without just compensation, was designed to protect against similar exertions of government authority. But because the government program in question was not considered arbitrary or totally lacking in rational justification in the opinion of the Court’s 5-4 decision, it was not in violation of the Due Process Clause of the Fourteenth Amendment and was upheld. The irony here is profound. A Communist – the same kind of man who probably praised Social Security when it was passed – was denied the benefits of the system he supported, and simultaneously opened the door for any American to be denied the same because of the absence of a “contract” which compels the government to do what it says it will after taking the money of its citizens.

President Lyndon Johnson

Following the assassination of President Kennedy in 1963, President Johnson directed the focus of his administration on welfare and the proverbial “war on poverty” (something which would be truly hilarious were its results not so dismal – only production can end poverty, not regulation, and only capitalism can lead to production). In an address to students at Ohio University, President Johnson stressed the importance of increased cooperation between leaders in Washington, D.C., the state capitals, and local municipalities and counties to form a new kind of “inventive” federalism. Noting his desire to end racial injustice and alleviate the “injustices” created by poverty, he criticized the type of selfish wealth praised by laissez faire ideologies. Though specific policy measures were not mentioned in this relatively short speech, he achieved in coining the name of the of his domestic policy decisions: the “Great Society” (6).

Specific policy measures were not long behind. The Johnson Administration and the Democrats in Congress successfully implemented several “anti-poverty” measures, most notably the Economic Opportunity Act and the Food Stamp Act in 1964. In addition, President Johnson created several new federal-level agencies including the Jobs Corps and the Volunteers in Service to America (number eight of Marx’s ten policy suggestions in the Communist Manifesto, by the way). In the realm of education, the Great Society included the Primary and Secondary Education Act of 1965, the Higher Education Act of 1965, and the Bilingual Act of 1968 (number ten). All of these programs were reminiscent of Depression Era statism, and each expanded the scope of the federal government despite staunch conservative opposition (with the rise of neo-liberalism, some politicians such as Barry Goldwater and Ronald Reagan would make their careers out of opposing such measures).

The relation which Johnson’s Great Society bears to the Affordable Care Act, however, is more than purely ideological similarities between the proponents and opponents of the various measures. Two of the programs created under the Johnson Administration (Medicare and Medicaid) became the center of intense discussion in the mid-2000’s and the new decade. In fact, reforming such programs was a central issue in both conservative and liberal proposals, though both factions centered their focus on addressing the symptoms of the true problem – statism – rather than addressing the problem itself.

Both of these measures were included in a comprehensive addendum to the 1935 Social Security Act in what is known as the Social Security Act of 1965. The new provisions of Social Security expanded the purposes of Social Security from being purely an income supplement to being a healthcare provider. The Medicare provision, funded entirely at the federal level in the same manner as the Supplemental Security Income which already existed, was created to help pay for the healthcare expenses of the elderly and the disabled (the program expanded in 1972 under Republican President Nixon to include those with what is known as “end stage renal disease”). Full Medicare benefits, like Supplemental Security Income, begin at age sixty-five, though this changed in 1983 under President Reagan – the age at which one can receive full benefits will gradually increase based on one’s date of birth until all those born in 1960 and later can receive benefits at age sixty-seven. Medicaid, on the other hand, is a program jointly funded by the federal government and the individual states. True to the intent of Johnson’s Great Society, Medicaid provides healthcare assistance for the poor, children, and other disabled persons. In addition, the Social Security Act of 1965 contains regulatory provisions which apply to all healthcare providers who receive funds from Medicare and Medicaid.

Again, the American Medical Association opposed the bill, as did conservative and neo-liberal political factions. Nevertheless, this expansion of Social Security did not receive the same amount of scrutiny from the nation’s judicial system as did its predecessor. In fact, the most notable challenges to Medicare did not even challenge the premise of Medicare, which was whether or not the government had the right to create it, just one of its provisions and the implementation of it.

In 1975, the Supreme Court heard a case which challenged the constitutionality of a provision in the Social Security Act of 1965 which required two parties to be married for at least nine months before they could receive one another’s benefits. Salfi, the appellee, had been married to her husband for about six months when he passed away and she applied to receive his benefits. She was denied because of the provision, and later sued. The outcome of Weinberger v. Salfi (1965) ultimately favored the government on the grounds that it could set its own rules for the legislation it passes and doing so does not inherently violate due process (true, but Medicare itself is still a vast violation of man’s property rights). A similar case occurred in Heckler v. Ringer (1984) with regards to reimbursement for a certain kind of surgery not deemed necessary or reasonable by the Secretary of Health and Human Services. In the end, the Court decided that all bureaucratic means for receiving that reimbursement had not been exhausted and that Court, therefore, lacked jurisdiction.

President Ronald Reagan

Two years later, however, the generally conservative President Reagan signed a compromise on healthcare legislation with the Democratic Congress. Because of the divided government, such compromises were not uncommon, especially on issues of immigration and taxation. This particular legislation, however, increased the amount of regulation in the healthcare industry in an important way which plays a significant role in contemporary healthcare debates – mandatory emergency room assistance.

Passed in 1986, the Emergency Medical Treatment and Active Labor Act (EMTALA) requires all healthcare providers receiving federal funds to provide emergency health services to those needing them, even if the patient cannot afford them – the costs would be covered by the taxpayers. EMTALA applies to all health care providers who accept Medicare patients, but since federal Medicare payments alone comprise 21% of all healthcare expenditures in the U.S. as of 2007, this provision effectively requires all healthcare providers to extend emergency services to those who cannot pay for them. More than anything else, this particular law is perhaps the single most destructive piece of legislation against the healthcare industry ever signed into law in America, short only of Obamacare itself. Undoubtedly, Medicare and Medicaid distort the market, violate the rights of individual employees and employers, and necessarily produce ramifications, but EMTALA directly attacks the ability of healthcare providers to produce their services. As is apparent, statism is built upon previous statism – the only reason EMTALA had any force at all was because federal funds comprised one-fifth of the medical market, giving it immense leverage over the healthcare providers receiving said funds. Medicare and Medicaid merely set the political stage for socialistic government healthcare – EMTALA made the first true strike.

When President Clinton defeated George H.W. Bush and Ross Perot in 1992, the solidly Democratic government reignited its push for universal healthcare. As early as Clinton’s first year in office, his administration proposed their version of healthcare legislation. Like the later Affordable Care Act, this act required all Americans to enroll in a qualified healthcare plan while simultaneously increasing regulation in the insurance industry (e.g. minimum health coverage per type of plan, maximum out-of-pocket expenses, etc.). And again, like the Affordable Care Act, the Clinton proposal faced broad coalitions of opposition from conservatives, libertarians, and healthcare/insurance providers for reasons ranging from its questionable constitutionality and arguments that it violated individual rights to more concrete claims about its effectiveness and the foreseeable problems it could produce for America’s healthcare industry. The far left also had its complaints, however, preferring a more centralized solution such as a single-payer system.

Despite the Democratic majority in both houses of Congress, the bill failed to receive a majority. Congressional leaders offered several compromises, such as Senate Majority Leader George Mitchell’s proposal which would have postponed all legislative effects on employers until 2002 and offered exemptions for all small businesses. Though party leaders endeavored to obtain the required majorities in Congress’s two chambers, they failed to win over the moderates within the Democratic Party, effectively killing the bill permanently after the 1994 Congressional elections.

In less than a decade, the Republicans would offer their own version of healthcare reform. In order appease to a key demographic in its constituency (individuals over the age of sixty), the Bush Administration produced its own addition to Medicare: Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This act expanded the provisions of the Social Security Act of 1965 and created an entirely new section of previous Medicare provisions known as Medicare Part D. The new Medicare Part D provision allows for the reimbursement of prescription drug costs to seniors and others covered by Medicare, all with virtually no funding to support it. Despite failed attempts to partially privatize Social Security in 2005 after his reelection, President Bush’s progressive, big-government policies merely exacerbated the partisan divide on healthcare legislation, ultimately culminating in the then soon-to-come debate over the Affordable Care Act.

Passing the Affordable Care Act

Since 2000, insurance premiums have continued to rise twice as fast as the inflation rate. It should come as no surprise, therefore, that public concern for healthcare and insurance reform is generally high and garners the attention of politicians, both liberal and conservative, seeking to tap into public sentiment. Even Republican Congressman Paul Broun of Georgia’s Tenth District calls the current system of healthcare insurance a “relic of the 1940’s,” displaying how the once largely liberal-dominated issue of healthcare reform has, of late, received near-universal attention from America’s political class (7). The approaches to solve the issue, however, are vastly different – Rep. Broun, a medical doctor himself and a member of the Tea Party Caucus, wants to replace third-party provided health insurance with direct, free market solutions, while statists prefer the expansion of third party insurance providers or, even worse, the direct management of all health insurance by the federal government.

President Barack Obama

During the 2008 election cycle, a little-known Senator from Illinois made healthcare one of the focal points of his campaign. Even in Senator Obama’s keynote address at the 2004 Democratic National Convention which thrust him into the national spotlight, he briefly spoke of the healthcare situation in America. By the time he became the Democratic nominee in August of 2008, Senator Obama pledged to “sign a universal healthcare bill into law by the end of [his] first year of office” (8). This promise, however, fell to a level of secondary importance following the financial meltdown of 2008 and the creation of TARP. After his election, economic policy dominated President Obama’s first year in office, passing several bailouts of financial institutions and automotive manufacturers.

After President Obama readjusted his focus on the looming one-year deadline of his healthcare promise in the summer of 2009, the first major debates began. American citizens flooded their town halls during the August recess in attempts to influence their elected representatives in both directions. Often, the discussion was less-than-civil, and in one instance even resulted in an elderly man having his finger bitten off by another individual at a healthcare protest in Thousand Oaks, CA – the elderly man showed up to counter-protest an effort by MoveOn.org and Code Pink that favored universal healthcare legislation.

Though many bills were proposed over the ensuing months, the Affordable Care Act (not to be confused with the proposed and failed Affordable Healthcare Act for America drafted in the House in November of 2009) passed the solidly Democratic Senate on December 24, 2009. The bill was then sent to the House of Representatives for its own consideration and revision.

At this point, public debate over the proposed healthcare legislation was steadily reaching its climax, going so far as to turn the special election to replace late Massachusetts Senator Ted Kennedy into a single-issue race. After $23M was spent on the campaign by both sides, Republican Scott Brown won the empty Massachusetts seat, thus breaking the “filibuster-poof” Democratic Senate. It was clear that any bill passed in the House would result in a Republican filibuster upon arrival to the Senate (plus, President Obama made a later promise that no debate on healthcare reform would occur in the Senate until after Senator Scott Brown was sworn-in).

To avoid this, Democratic leaders decided that the most prudent solution would be to pass the Senate bill without amendment and instead pass any amendments in a secondary bill once the first was passed. Even with amendments waiting in the congressional queue in the Health Care and Education Reconciliation Act of 2010 and with an unanswerable majority in the House, Democrats still failed to acquire the necessary votes to pass the bill. Several Democratic Representatives refused to vote for the bill on the grounds that the Affordable Care Act would allocate federal funds to pay for abortions. When President Obama signed an executive order forbidding such a use of federal funds (an order which has no force – executive orders can only clarify bureaucratic parts of the law, not negate or rewrite it), these Democrats agreed to vote for the bill and passed it on March 21, 2010 – the vote was 219-212, with 34 Democrats and all 178 Republicans opposing it. The Health Care and Education Reconciliation Act of 2010 passed nine days later, 220-211.


Before the ink from President Obama’s signature was dry, over a fourteen states filed suit against the federal government on the grounds that the law was unconstitutional. The challenges came from mostly Republican attorneys general, with the Louisiana attorney general at the time being the singular exception. Thirteen of the states joined together in Florida et al. v. HHS while the Commonwealth of Virginia sued separately because of a direct conflict between a state law and the Affordable Care Act. Besides Florida et al. v. HHS  and Virginia v. Sibelius, many other challenges were dismissed from the outset, as in Judge George C. Steeh’s dismissal of a challenge presented to him in the federal district court of Detriot, while other cases like Liberty University v. Geithner and Thomas More Law Center v. Barack Obama were allowed to proceed.

The federal government tried to have the case dismissed from the beginning, arguing that the individual mandate and the fine which would occur if someone does not comply is merely a tax, something which Congress has the explicit constitutional (though not moral) authority to do. However, the presiding Judge Vinson rejected this assertion, deciding instead that the fine is a type of economic penalty which falls under the Commerce Clause rather than the General Welfare Clause (9). Additionally, the federal government argued that, seeing as states themselves coercively require drivers to purchase private auto insurance, the requirement to purchase health insurance is also constitutional.

On the other hand, the state governments claim that the individual mandate is an unjust extension of the Commerce Clause and violates state sovereignty (10). In order to do this, they had to move the debate away from the General Welfare, i.e. the Tax Clause (the clause on which previous Social Security Acts had been upheld) and into the Commerce Clause (which they did rather successfully, noting Judge Vinson’s above statement). Furthermore, the states claimed that it would place an undue burden on them as employers to follow all the new regulations, and thus the law was a violation of current interpretations of the Due Process Clause.

Judge Roger Vinson

The whole process, from the initial complaints through the ruling, took nearly a year, and on January 31st, 2011, the first ruling in Florida et al. v. HHS was released – Judge Roger Vinson of the North District Court of Florida struck down the law. Though the attorneys representing the case offered several arguments, the most compelling of these, and consequently the one which Judge Vinson focused on the most, was the assertion that the individual mandate was an improper extension of the Commerce Clause. In fact, Judge Vinson uses over half of his opinion to address the individual mandate as it relates to the fluid interpretation of the Commerce Clause, concluding succinctly on page sixty-three: “The individual mandate is outside Congress’ Commerce Clause power, and it cannot be otherwise authorized by an assertion of power under the Necessary and Proper Clause. It is not Constitutional” (11). However, Vinson goes one step further and declares that because this particular clause is key to the survival of the bill, and because Congress did not include a severability clause within the bill, the individual mandate is not severable and thus the entire bill is unconstitutional. In the final conclusion, Vinson stated that it would ultimately fall on the Supreme Court (or a constitutional amendment) to clarify the Commerce Clause.

Naturally, the case moved on to the 11th Circuit Court of Appeals, but not before reaching its current number of litigants with the addition of thirteen more states and the National Federation of Independent Businesses. On August 11th, 2011, the three-judge panel which heard the case released its ruling, agreeing in part with Judge Vinson’s previous assessment. According to the two judge majority, the individual mandate is indeed unconstitutional under the current interpretation of the Commerce Clause, but those judges determined that it can be severed from the law so the law itself still stands. In the opinion, Chief Judge Dubina and Circuit Judge Hull agreed that the law unjustly forces American citizens to “enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die” (12). (This is a slight reversal of the Lochner concept of “right to contract” in the sense that it here means the “right to not contract.”) The dissenting Judge Marcus criticized the other two, claiming that the Commerce Clause has been expanded drastically over the last two centuries and that the Affordable Care Act is permissible under those expansions.

The Supreme Court granted cert on November 14th and has been hearing oral arguments over the last few days – the case is now Health and Human Services v. Florida et al. because the government lost on the lower appellate level and has become the petitioner. On Monday, the Court focused on whether the individual mandate falls under Congress’s taxing power, on Tuesday they examined the constitutionality of the mandate, and on Wednesday they discussed severability. There will be two more sets of oral arguments on Thursday.

Reasons for Conflicting Rulings and Current Constitutional Questions

This case is the only one thus far which has received a favorable ruling on the appellate level for the plaintiffs – the other three instances in which the Affordable Care Act has appeared on the appellate level, it has been upheld as constitutional. What, then, caused Judge Vinson and the judges on the 11th Circuit to rule differently, particularly when many of their colleagues view the individual mandate as just another valid use of the Commerce Clause?

Justice Anthony Kennedy, considered by many to be the deciding vote in HHS v. Florida

For one, the issue over whether individuals should be compelled to purchase goods from the private sector is extremely divisive. It is rarely argued that people cannot be coerced into paying for public sector goods (which is unfortunate, because they ought not to be) – Social Security and other entitlement programs have long been upheld as constitutional, but whether private sector goods are the same constitutionally, at least at the federal level, remains to be the seen.

The question regarding the constitutionality of the federal government withholding funding if the terms of receiving funding are not fulfilled will likely be answered favorably for the government. As recently as Rumsfeld v. FAIR (2006), the Supreme Court ruled that federal funding could be withheld when regulations are not met. The unanimous 8-0 ruling held that the Solomon Amendment, a piece of legislation which would withhold federal funding from universities that disallowed the military from recruiting on their campuses, was constitutional – the provision in the Affordable Care Act which would withhold federal funding from state governments that did not comply with the new regulations will probably receive a similar ruling.

The severability of the individual mandate, being the key difference between Judge Vinson’s and the 11th Circuit’s ruling, will also have to be examined should the Court rule against its constitutionality. The reason the individual mandate is viewed as so vital to the bill by those that feel it is not severable is because it was necessary to solve the perceived problems of Reagan’s EMTALA bill. Because people without insurance have their emergency room services covered by the taxpayers, the individual mandate was considered crucial in the bill’s superficial purpose: cutting healthcare costs. Additionally, measures which forbid insurance companies from turning away individuals with preexisting conditions or require those companies to cover certain services would cause massive spikes in healthcare premiums if everyone was not paying for them (it will cause these spikes anyway as it inhibits the producer’s ability to produce on his own terms, but such reasoning is avoided). As Judge Vinson stated in his response to the government’s motion to dismiss the case, “This provision is necessary, according to Congress and the defendants, to lower premiums (by spreading risks across a much larger pool) and to meet ‘a core objective of the Act,’ which is to expand insurance coverage to the uninsured by precluding the insurance companies from refusing to cover (or charging exorbitant rates to) people with pre-existing medical conditions” (13). Despite the lack of a severance clause, however, proponents of the bill argue that even if the individual mandate is unconstitutional, the other provisions of the bill could still be valid and should not be ruled null and void by the Court.

Closing Remarks

Obamacare is unconstitutional — there is absolutely no justification for the alternative position. It is utterly impossible to construe the original meaning of the Commerce Clause as being supportive of such legislation, and the supporters of Obamacare know it as well — notice how Judge Marcus defended Obamacare on the grounds that the Commerce Clause has changed repeatedly over previous centuries, not that the original design of the Commerce Clause actually supports it. Regardless of how the Supreme Court will ultimately decide this case, it is an expansive violation of individual rights in one of the most fundamentally important sectors of the economy: healthcare.

In literal terms, this is a matter of life or death. Whereas other sectors of the economy can withstand certain levels of statist onslaught without immediately collapsing, if a man cannot access healthcare when he needs it, he dies, immediately. At the moment, the United States has the premier healthcare system in the world, outstripping every other nation in life expectancy once deaths from unnatural causes (e.g. car crashes) have been properly excluded from statistical analyses of the quality of a nation’s healthcare system. We lead the world in medical innovation, constantly improving man’s ability to overcome various cancers, viruses, and bacteria. On its whole, America’s healthcare system is superb and entirely unworthy of the irrational, baseless criticisms by the men who hate it for no other reason besides that it is successful.

The key to the success in our nation’s healthcare system is not the various kinds of government programs presently choking it and preventing it from actualizing its full potential. Rather, it is the relatively high level of freedom under which our healthcare system operates — coupled with a culture which, to some extent, still values individual initiative and achievement — that is responsible for America’s healthcare success, in spite of the government regulations presently in place. Arguments that America has made healthcare too expensive for poor individuals or even the middle class to enjoy it are unfounded — no other country on the face of the earth has done more to make healthcare easily accessible to as many people as possible than the United States, and for no other reason than that it allowed its healthcare providers to produce. By no means is this a substitutive defense for capitalism, meaning that capitalism should be defended because it is valuable and necessary to man’s own life rather than for the common good, but it is still a fact.

Undoubtedly, there are problems in our healthcare system which much be addressed. The cost of healthcare is spiraling upward, far beyond what it should otherwise be under a capitalist system. Why is this? In essence, the reason the cost of healthcare is rising so rapidly out of reach for those without insurance is because the government has injected itself into the market, distorted it, and injured the interests and rights of all individuals seeking to purchase healthcare in the process.

If one truly examines our current situation, American is already under a system of universal government healthcare. Taxpayers fund the healthcare of the elderly, the young, the poor, the disabled, government workers, and those unable to pay for emergency medical services. Most every other American receives healthcare funding from a third-party insurance provider through their employer — those who do not are left with immense bills to pay should they ever fall to illness or accident. The fact is that most Americans have health insurance, but it is through a third party provider which — when coupled with government interference — produces disastrous effects.

There is little to no competition in the medical insurance industry, and there is a similar lacking amongst healthcare providers as a whole. Because people receive their healthcare from a third party source, the virtue of frugality is completely abandoned — money is no object to those receiving their healthcare for “free,” meaning on the dime of someone else. Those who receive insurance through their employer, however, are a special case. Oftentimes, employees can opt out of company insurance plans in exchange for a wage increase — a wage increase which would be taxed unlike their health benefits. Because they never actually receive the money and have no option of where or how to spend it (considering they can get a better plan than if they accept a taxed pay increase), all responsibility regarding how customers purchase their health insurance is eliminated. Instead, they defer to their employers to make the purchase for them, opting to never see the money nor make a potentially better choice for themselves, and can they be blamed? Should they choose to accept a pay increase rather than be placed on their company’s health insurance plan, that increase would be taxed like regular income. In other words, they end up having even more money coercively taken from them if they attempt to freely choose their own health insurance provider over having it chosen for them.

The result of such a system is that demand becomes nearly perfectly inelastic, meaning that customers are willing to buy a given product regardless of the price. As a result, producers feel free to sell their goods at higher prices because it serves their self-interests and their customers are still willing to purchase them (self-interest is not the sin here, but the government coercion is). For those individuals without insurance, however, they are simply overlooked — why lower prices to get more customers when one has a solid base of customers that will pay any price?

Third-party provided health insurance is just one of many problems in our health insurance market — states prohibiting their citizens from buying insurance across state lines, the government determining the prices it will pay for various services it covers, the government determining what services it will or will not cover, and many, many other things produce similar economic distortions. Obamacare merely worsens these problems. Going far beyond affecting the demand market, which is damaging enough, Obamacare follows in the footsteps of EMTALA and directly attacks the supply market. It inhibits the ability of producers to provide their services in an effective and efficient manner. When producers are forced to sacrifice their minds and productive abilities to the opinions of a government bureaucrat, everyone suffers.

The fact is that President Obama’s healthcare bill is anti-liberty, anti-Constitution, anti-self, anti-mind. If America is to continue developing life-saving drugs and services in sufficient quantities, the statist system of legislation and red tape now gripping its healthcare system must be removed. The productive forces of man’s mind must be unleashed from their current restraints. How? By recognizing that each man lives for himself; by recognizing that in order to live for himself, man must be free from initiated force; by recognizing that man’s only means of survival and of perceiving reality is his reason; by recognizing that the laws of reality must be obeyed to be conquered. This we must do — Obamacare is merely one battle of many.

1. 2009. “Platform of the Progressive Party.” Platform Of The Progressive Party 1 (1912). Academic Search Complete, EBSCOhost.

2. Roosevelt, Theodore. “The Rights of the People to Rule.” Carnegie Hall. New York. March 20, 1912: Paragraph 23, http://teachingamericanhistory.org/library/index.asp?document=1125.

3. Helvering v. Davis, 301 U.S. 640 (1937).

4. Ibid., 641.

5. United States v. Butler, 297 U.S. 68 (1936).

6. Johnson, Lyndon B. “The Great Society Speech.” Ohio University. Athens, OH. 1964. http://teachingamericanhistory.org/library/index.asp?document=92.

7. Broun, Paul C. “Health Care.” Issues. http://broun.house.gov/Issues/Issue/?IssueID=4095.

8. Beiser, H. D. “Pledge tracker: Has Obama delivered on campaign promises?” USA Today (2009). http://www.usatoday.com/news/washington/obama-campaign-promise-tracker.htm.

9. Florida v. United States HHS, 716 F. Supp. 2d 1143 (N.D. Fla., 2010).

10. Ibid., 1130.

11. Florida v. United States HHS, 780 F. Supp. 2d 1299 (N.D. Fla., 2010).

12. Florida v. United States HHS, 648 F.3d. 1311 (11th Cir. Fla., Aug. 12, 2011).

13. Florida v. United States HHS, 716 F. Supp. 2d 1129 (N.D. Fla., 2010).


3 thoughts on “Historical Imperative: A History of Healthcare Litigation

  1. Mike Slater was discussing pre-existing conditions on his program this morning (@7:20ish if you look up the podcast) and he brought up two important interventions you don’t mention above. Wage freezes in 1942 that compelled companies to increase compensation in other ways and tax exemptions for health benefits (in the 1960s?). Sometime between those I believe there was also the tax exempt status given to bluecross-blueshield. This last was litigated. I don’t know if the wage caps or tax exemptions ever were.

  2. Stare decisis can’t be ignored when you’re discussing cases concerning the commerce clause. If you don’t take into account precedent then you unravel the entire federal structure of regulation and welfare .Although you may be tempted to do just that, note that the court doing so will cause chaos if you take the argument that precedent shouldn’t matter when it comes to the commerce clause to it’s logical conclusion.

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