Cost-benefit federalism: Reconciling collective action federalism and libertarian federalism in the obamacare litigation and beyond

American Journal of Law and Medicine

Volumn 38, Issue 2-3, 2012, Pages 288-325

  Moncrieff, Abigail R ^a  

^a BOSTON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COST BENEFIT ANALYSIS; ECONOMICS; HEALTH CARE POLICY; HEALTH INSURANCE; HUMAN; INSURANCE; LEGAL ASPECT; PATERNALISM; PERSONAL AUTONOMY; POLITICS; UNITED STATES;

COST-BENEFIT ANALYSIS; HEALTH CARE REFORM; HUMANS; INSURANCE COVERAGE; INSURANCE, HEALTH; PATERNALISM; PATIENT PROTECTION AND AFFORDABLE CARE ACT; PERSONAL AUTONOMY; POLITICS; UNITED STATES;

EID: 84861906277     PISSN: 00988588     EISSN: None     Source Type: Journal    
DOI: 10.1177/009885881203800203     Document Type: Conference Paper

References (130)

1. See Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010)
2. amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029
3. (to be codified primarily in scattered sections of 42 U. S. C.) [hereinafter ACA]. The moniker "Obamacare" is one that has been associated with the law's opponents, but I like the name better than "PPACA" or "ACA" and will therefore use it despite arguing for the statute's constitutionality.
4. See ACA § 1501
5. (codified as amended at 26 U. S. C. A. § 5000A (West 2012)).
6. See Robert Cooter & Neil S. Siegel, Collective Action Federalism: A General Theory of Article I, Section 8, 63 STAN. L. REV. 115, 117 (2010)
7. (quoting 2 THE RECORDS OF THE FEDERAL CONVENTION OF 1787, at 131-32 (Max Farrand ed., rev. ed. 1966)).
8. See, e.g., Jack Balkin, Commerce, 109 MICH. L. REV. 1, 46-47 (2010);
9. Patrick McKinley Brennan, The Individual Mandate, Sovereignty, and the Ends of Good Government: A Reply to Professor Barnett, 159 U. PA. L. REV. 1623 (2011);
10. Mark A. Hall, Commerce Clause Challenges to Health Care Reform, 159 U. PA. L. REV. 1825 (2011);
11. Andrew Koppelman, Bad News for Mail Robbers: The Obvious Constitutionality of Health Care Reform, 121 YALE L. J. ONLINE 1(2011), http://yalelawjournal.org/2011/04/26/koppelman. html;
12. Neil S. Siegel, Free Riding on Benevolence: Collective Action Federalism and the Individual Mandate, 5 LAW & CONTEMP. PROBS. (forthcoming 2012);
13. Peter J. Smith, Federalism, Lochner, and the Individual Mandate, 91 B. U. L. REV. 1723 (2011).
14. See generally Sam Singer, Defending the Affordable Care Act: What the Justice Department Can Learn from the Legal Academy, VA. REV., http://www.vareview.com/ContributorArticles/Articles/AboutTheHealthCareLawsuits. aspx (last visited Feb. 21, 2012) (noting that most members of the legal academy seem to be following a collective action theory of federalism in their defenses of Obamacare).
15. See THE FEDERALIST NO. 51 (James Madison).
16. See, e.g., Randy E. Barnett, Commandeering the People: Why the Individual Health Insurance Mandate Is Unconstitutional, 5 N. Y. U. J. L. & LIBERTY 581 (2010) [hereinafter Balkin, Commandeering the People];
17. Randy E. Barnett, Jack Balkin's Interaction Theory of Commerce, 2012 U. ILL. L. REV. (forthcoming 2012);
18. Gary Lawson & David B. Kopel, Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, 121 YALE L. J. ONLINE 267(2011), http://yalelawjournal.org/2011/11/08/lawson&kopel.html;
19. llya Somin, Taking Stock of Comstock: The Necessary and Proper Clause and the Limits of Federal Power, 2010 CATO SUP. CT. REV. 239;
20. Kurt T. Lash, "Resolution VI": National Authority to Resolve Collective Action Problems Under Article I, Section 8 (111. Pub. Law & Legal Theory, Research Paper No. 10-40, 2012)
21. available at http://papers.ssrn. com/sol3/papers.cfm?abstract-id=l 894737.
22. with Barnett, Commandeering the People, supra note 8, at 582-83.
23. Roderick M. Hills, Jr., The Individual Right to Federalism in the Rehnquist Court, 74 GEO. WASH. L. REV. 888 (2006) (describing the same distinction and comparing it to the distinction for individual substantive rights, which is also generally an economic/noneconomic distinction).
24. See generally Roderick M. Hills, Jr., The Political Economy of Cooperative Federalism: Why State Autonomy Makes Sense and "Dual Sovereignty" Doesn't, 96 MICH. L. REV. 813 (1998) (discussing the phenomenon of cooperative federalism programs and the political economy of intergovernmental relations within those programs).
25. See MALCOLM M. FEELEY & EDWARD RUBIN, FEDERALISM: POLITICAL IDENTITY AND TRAGIC COMPROMISE (2008) (noting that federalism and decentralization ought to be treated as separate concepts and that national authority need not imply full centralization of decision-making);
26. Abigail R. Moncrieff & Eric Lee, The Positive Case for Centralization in Health Care Regulation: The Federalism Failures of the ACA, 20 KAN. J. L. & PUB. POL'Y 266, 278-79 (2011) (noting that Medicare captures many advantages of state control by running policy experiments and decentralizing authority to local fiscal intermediaries).
27. See United States v. Lopez, 514 U. S. 549, 557 (1995) (stating a "rational basis" test for review of national regulations defended under the Commerce Clause).
28. See OBAMACARE: MANDATORY SOCIALIZED MEDICINE, http://www.akdart.com/ obamal84.html (last visited Feb. 21, 2012) (webpage containing many links to commentaries about Obamacare).
29. 514 U. S. 549 (1995).
30. 529 U. S. 598 (2000).
31. Lopez, 514 U. S. at 564.
32. See generally LOUIS HARRIS, A SURVEY OF EXPERIENCES, PERCEPTIONS, AND APPREHENSIONS ABOUT GUNS AMONG YOUNG PEOPLE IN AMERICA (1993) (using survey data to document an increase in gun possession in schools).
33. United States v. Morrison, 529 U. S. 598 (2000).
34. Florida ex rel. Att'y Gen. v. U. S. Dep't of Health & Human Servs., 648 F.3d 1235, 1284, 1291-92 (11th Cir. 2011)
35. cert, granted sub nom. Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 603 (2011) (mem.)
36. and cert, granted, 132 S. Ct. 604 (2011) (No. 11-398) (mem.) (argued Mar. 26-27, 2012)
37. and cert, granted in part, 132 S. Ct. 604 (2011) (No. 11-400) (mem.) (argued Mar. 28, 2012)
38. See generally R. H. Coase, The Problem of Social Cost, 3 J. L. & ECON. 1 (1960).
39. See Virginia v. Tennessee, 148 U. S. 503, 519 (1893)
40. (interpreting and applying the Compacts Clause of the Constitution, U. S. CONST, art. I, § 10, cl. 3).
41. See generally U. S. Steel Corp. v. Multistate Tax Comm'n, 434 U. S. 452 (1978).
42. See, e.g., Einer Elhauge, Does Interest Group Theory Justify More Intrusive Judicial Review?, 101 YALE L. J. 31, 34-44 (1991).
43. Abigail R. Moncrieff, The Supreme Court's Assault on Litigation: Why (and How) It Might Be Good for Health Law, 90 B. U. L. REV. 2323 (2010).
44. See generally Charles M. Tiebout, A Pure Theory of Local Expenditure, 64 J. POL. ECON. 416 (1956) (modeling interstate competition and theorizing that such competition could theoretically result in optimal regulatory bundles).
45. George Clinton, Republican Government: Cato, No. 3, in 1 THE COMPLETE ANTI-FEDERALISTS 126, 126 (Herbert Storing ed., University of Chicago Press, 1981).
46. Centinel, Union: Centinel, No. 11, in 1 THE COMPLETE ANTI-FEDERALISTS, supra note 59, at 231.
47. See THE AMERICAN CONSTITUTION: FOR AND AGAINST 3-6 (J. R. Pole ed., 1987) (describing the coordinating efforts that the colonies made to fight the Revolutionary War).
48. See generally Bruce A. Ackerman & William T. Hassler, Beyond the New Deal: Coal and the Clean Air Act, 89 YALE L. J. 1466 (1980) (describing the odd dirty coal/clean air coalition that formed during implementation of the Clean Air Amendments in a 1979 ruling by the Environmental Protection Agency (EPA)).
49. See generally Maria Godoy, State By State: The Legal Battle Over Gay Marriage, NPR (Feb. 7, 2012), http://www.npr.org/2009/12/15/112448663/state-by- state-the-legal-battle-over-gay-marriage (showing that Maine has a marriage protection statute while Vermont allows gay marriage).
50. See generally Peter P. Budetti & Teresa M. Waters, Medical Malpractice Laws in the United States, KAISER FAM. FOUND., 22(2005), http://www.kff.org/insurance/upload/Medical-Malpractice-Law-in-the-United- States-Report.pdf (indicating that the average damage award in Nevada is significantly higher than in California);
51. Ethan M. J. Lieber, Medical Malpractice Reform and the Distribution of Physicians (Univ. of Chi. Dep't of Econ., Working Paper, 2012), http://home.uchicago.edu/-elieber/advselpaper.pdf (finding that negligent doctors are more likely than non-negligent doctors to move in response to changing medical malpractice laws).
52. and Roderick M. Hills, Jr., Federalism as Westphalian Liberalism, 75 Fordham L. Rev. 769 (2006)
53. See United States v. Lopez, 514 U. S. 549, 557 (1995).
54. 110 Stat. 3009, 3009-369 to 3009-370 (1996). The statute has thus been in nearly continuous effect since its first enactment in 1990, notwithstanding its invalidation in Lopez.
55. Herbert Wechsler, The Political Safeguards of Federalism: The Role of the States in the Composition and Selection of the National Government, 54 COLUM. L. REV. 543 (1954).
56. See generally Daniel A. Farber, The Constitution's Forgotten Cover Letter: An Essay on the New Federalism and the Original Understanding, 94 MICH. L. REV. 615, 618-26 (1995) (tracing the origins of "the new federalism"-the Court's renewed assertions of authority to enforce federalism norms-from the 1970s through the Lopez decision).
57. See generally Gillian E. Metzger, Administrative Law as the New Federalism, 57 DUKE L. J 2023 (2008).
58. For the proposition that preemption is worse for states and federalism than commandeering, see generally Jessica Bulman-Pozen & Heather Gerken, Uncooperative Federalism, 118 YALE L. J. 1256 (2009).
59. See generally Philip J. Weiser, Towards a Constitutional Architecture for Cooperative Federalism, 79 N. C. L. REV. 663 (2001);
60. See Defense of Marriage Act, Pub. L. No. 104-199, 110 Stat. 2419 (1996)
61. (codified at 1 U. S. C. § 7;
62. 28 U. S. C. § 1738C). Several federal court cases are currently considering the substantive and structural constitutionality of DOM A.
63. Gill v. Office of Pers. Mgmt., 699 F. Supp. 2d 374 (D. Mass. 2010);
64. Massachusetts v. U. S. Dep't of Health & Human Servs., 698 F. Supp. 2d 234 (D. Mass. 2010);
65. Dragovich v. Dep't of the Treasury, No. 10-1564, 2012 WL 253325 (N. D. Cal. Jan. 26, 2012). President Obama has decided not to defend the statute in court.
66. See David G. Savage & James Oliphant, Obama Administration Shifts Legal Stance on Gay Marriage, L. A. TIMES (Feb. 23, 2011), http://articles. latimes.com/2011/feb/23/nation/la-na-obama-gay-marriage-20110224/2.
67. See Defense of Marriage Act, Pub. L. No. 104-199, 110 Stat. 2419.
68. I realize that this may be a controversial-and is certainly an atypical-view of DOMA, but its limiting effect on externalities is certainly one of its effects.
69. See generally Jamelle C. Sharpe, Legislation Preemption, 53 WM. & MARY L. REV. 163, 175-80 (2011) (describing doctrinal preemption rules and generally theorizing Congress's power to set its own rules for preemption).
70. See Gonzales v. Raich, 545 U. S. 1 (2005).
71. See Altria Grp. v. Good, 555 U. S. 70, 76 (2008).
72. See, e.g., Compassionate Use Act of 1996, CAL. HEALTH & SAFETY CODE § 11362.5 (West 1996);
73. Oregon Medical Marijuana Act, OR. REV. STAT. ANN. § 475. 300 (West 1998);
74. see also 16 Legal Medical Marijuana Stales and DC: Laws, Fees, and Possession Limits, PROCON. ORG (Feb. 8, 2012), http://medicalmarijuana.procon. org/view.resource.php?resourceID=000881.
75. See David Johnston & Neil A. Lewis, Obama Administration to Stop Raids on Medical Marijuana Dispensers, N. Y. TIMES, Mar. 19, 2009, at A20.
76. See John Hoeffel, Obama Shifts to a Hard Line on Pot Sales: For-Profit Medical Marijuana Sales Are Target of Wide-Ranging Crackdown in State, L. A. TIMES, Oct. 8, 2011, at 1.
77. See Kamala Harris Defends Medical Marijuana: California Attorney General Asks Federal Government to Ease Enforcement, HUFFINGTON POST (Oct. 20, 2011, 9:55 PM), http://www.huffingtonpost.com/2011/10/21/kamala-harris-defends- medicalmarijuana-n-1023310.html.
78. See, e.g., Elizabeth Weeks Leonard, State Constitutionalism and the Right to Health Care, 12 U. PA. J. CONST. L. 1325, 1338 (2010) (defining cooperative federalism programs, such as Medicare and the State Children's Health Insurance Program (SCHIP), as ones where states "receive a percentage-on-the-dollar match from the federal government for every state dollar spent");
79. Susan Rose-Ackerman, Cooperative Federalism and Co-optation, 92 YALE L. J. 1344 (1983) (arguing for cooperative federalism through federal grants and monies);
80. See generally Abigail R. Moncrieff, Comment, Payments to Medicaid Doctors: Interpreting the "Equal Access" Provision, 73 U. CHI. L. REV. 673, 675-76 (2006) (describing the basic structure of Medicaid's cooperative federalism).
81. See Review of State Plan Material, 42 C. F. R. § 430. 14 (2012) (designating regional staff to review state Medicaid plans and amendments).
82. See, e.g., Philip J. Weiser, Chevron, Cooperative Federalism, and Telecommunications Reform, 52 VAND. L. REV. 1 (1999);
83. Alice Kaswan, A Cooperative Federalism Proposal for Climate Change Legislation: The Value of State Autonomy in a Federal System, 85 DENV. U. L. REV. 791 (2008).
84. Cass R. Sunstein, Humanizing Cost Benefit Analysis, Remarks Prepared for American University's Washington College of Law Administrative Law Review Conference (Feb. 17, 2010), available at http://www.whitehouse.gov/omb/oira- speech-02172010 (describing the use of cost-benefit analysis by the Office of Information and Regulatory Affairs, which oversees all federal regulations).
85. SUP. CT. R. 37.
86. See 18 U. S. C. § 201 (2006) (prohibiting bribery of public officials and witnesses).
87. See United States v. Lopez, 514 U. S. 549, 562 (1995).
88. See Brief of Amici Curiae Jewish Alliance for Law & Social Action (JALSA), Jewish Council on Urban Affairs (JCUA), Jewish Social Policy Action Network (JSPAN), New England Jewish Labor Committee (JLC), & Professor Abigail R. Moncrieff in Support of Petitioners on the Individual Liberty Implications of the Minimum Coverage Provision, Dep't of Health and Human Servs. v. Florida, No. 11-398 (U. S. Jan. 13, 2012), 2012 WL 160243 [hereinafter JALSA Brief];
89. Brief Amici Curiae of Prescription Policy Choices, Professors of Law, & Professors of Health Policy in Support of Petitioners on the Minimum Coverage Provision, Dep't of Health & Human Servs. v. Florida, No. 11-398 (U. S. Jan. 13, 2012), 2012 WL 160229 [hereinafter PPC Brief]. 1 thank Andrew and Kevin, as well as students David Arnold, Julia Mirabella, Zoë Sajor, Rachel Smit, Kyle Thomson, Hao Wang, and Emily Westfall, for their contributions to this research.
90. The Eleventh Circuit, for example, merely asserted without citation or elaboration "that the individual mandate supersedes a multitude of the states' policy choices in these key areas of traditional state concern. "Florida ex rel. Att'y Gen. v. U. S. Dep't of Health & Human Servs., 648 F.3d 1235, 1306 (11th Cir. 2011)
91. cert, granted sub nom. Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 603 (2011) (mem.)
92. and cert, granted, 132 S. Ct. 604 (2011) (No. 11-398) (mem.) (argued Mar. 26-27, 2012)
93. and cert, granted in part, 132 S. Ct. 604 (2011) (No. 11-400) (mem.) (argued Mar. 28, 2012).
94. Compare Patient Protection and Affordable Care Act of 2010, H. R. 3590
95. 111th Cong. (2010) (Senate version of the bill)
96. with America's Affordable Health Choices Act of 2009, H. R. 3200(2009), Title II, Subtitle A, available at http://www.opencongress.Org/bill/111-h3200/ text.
97. See 42 U. S. C. A. § 300gg-l-l-19a (2012).
98. Christopher C. Jennings & Katherine J. Hayes, Health Insurance Reform and the Tensions of Federalism, 362 NEW ENG. J. MED. 2244, 2245 (2010) (noting that states will continue licensing insurers).
99. See McCarran-Ferguson Act, 15 U. S. C. §§ 1011-1015 (2006).
100. 42 U. S. C. A. § 300gg-94 (West 2012).
101. 15 U. S. C. §§ 1011-1015.
102. See Jonathan Dinan, Shaping Health Reform: State Government Influence in the Patient Protection and Affordable Care Act, 41 PUBLLUS 395, 399, 412-13 (2011).
103. 42 U. S. C. A. § 300gg-22.
104. See generally Jon Kingsdale & John Bertko, Insurance Exchanges Under Health Reform: Six Design Issues for the Stales, 29 HEALTH AFF. 1158 (2010);
105. State Actions to Implement Health Exchanges, NAT'L CONF. OF STATE LEGS. (Feb. 25, 2011), http://www.ncsl.org/issuesresearch/health/state-actions-to- implement-the-health-benefit-exch.aspx (demonstrating that the states are already taking advantage of the statute's flexibility and pursuing divergent strategies for implementing exchanges).
106. 42 U. S. C. A. § 18052;
107. see also Press Release, Office of the Press Sec'y, Fact Sheet: The Affordable Care Act: Supporting Innovation, Empowering States (Feb. 28, 2011), available at http://www.whitehouse.gov/the-press-office/2011/02/28/fact-sheet- affordable-care-act-supportinginnovation-empowering-states.
108. See 42 U. S. C. § 1395 (2006).
109. Pub. L. 93-406, 88 Stat. 829 (1974).
110. Pub. L. 104-191, 110 Stat. 1936 (1996).
111. See generally Russell Korobkin, The Battle of Self-Insured Health Plans, or "One Good Loophole Deserves Another", 5 YALE J. HEALTH POL'Y L. & ETHICS 89, 92-105 (2005) (explaining ERISA preemption).
112. Compare 42 U. S. C. A. § 300gg-l-19a (West 2012) (insurance regulations)
113. with 26 U. S. C. A. § 5000A (West 2012) (individual mandate).
114. See 26 U. S. C. A. § 5000A.
115. See CONRAD F. MEIER, DESTROYING INSURANCE MARKETS: HOW GUARANTEED ISSUE AND COMMUNITY RATING DESTROYED THE INDIVIDUAL HEALTH INSURANCE MARKET IN EIGHT STATES (Council for Affordable Health Ins. & Heartland Inst, eds., 2005), available at http://www.cahi.org/cahi-contents/resources/pdf/ destroyinginsmrkts05.pdf.
116. 322 U. S. 533 (1944).
117. 124 Stat. 1029
118. (codified in 26 U. S. C. A. § 5000A).
119. See generally Abigail R. Moncrieff, Federalization Snowballs: The Need for National Action in Medical Malpractice Reform, 109 COLUM. L. REV. 844 (2009) (describing the externalization problems that arise from federal spending programs like Medicare and Medicaid).
120. Congress asserted in two findings that the individual mandate would "increase the number and share of Americans who are insured", 42 U. S. C. A. § 18091 (a) (2) (C) (West 2012), and would achieve "near-universal coverage", id. § 18091 (a) (2) (D). The next finding noted that "[t]he economy loses up to $207 [billion] a year because of the poorer health and shorter lifespan of the uninsured" and that near-universal coverage "will significantly reduce this economic cost."
121. See Gonzales v. Raich, 545 U. S. 1 (2005).
122. See Emergency Medical Treatment and Active Labor Act (EMTALA), 42 U. S. C. § 1395dd (2006).
123. See Florida ex rel. Att'y Gen. v. U. S. Dep't of Health & Human Servs., 648 F.3d 1235, 1291-92 (Uth Cir. 2011)
124. cert, granted sub nom. Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 603 (2011) (mem.)
125. and cert, granted, 132 S. Ct. 604 (2011) (No. 11-398) (mem.) (argued Mar. 26-27, 2012)
126. and cert, granted in part, 132 S. Ct. 604 (2011) (No. 11-400) (mem.) (argued Mar. 28, 2012) ("Individuals subjected to this economic mandate have not made a voluntary choice to enter the stream of commerce, but instead are having that choice imposed upon them by the federal government.");
127. See also 26 U. S. C. A. § 5000A (b) (West 2012);
128. 26 U. S. C. A. § 5000A (b).
129. See Florida ex rel. Atfy Gen., 648 F.3d at 1291-92.
130. Robert Pear, Health Care Law Will Let States Tailor Benefits, N. Y. TIMES, Dec. 16, 2011, at A1, available at http://www.nytimes.com/2011/12/17/ health/policy/health-care-law-to-allow-statesto-pick-benefits.html?-r=2.