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Public Statements

Health Care

Floor Speech

Location: Washington, DC

Mr. KYL. Mr. President, as we know, today the Supreme Court began hearing arguments about the constitutionality of the affordable care act. It is one of the most critically important Supreme Court cases of our time. A Wall Street Journal editorial noted last Friday:

Few legal cases in the modern era are as consequential, or as defining, as the challenges to [this law]. ..... The powers that the Obama administration is claiming change the structure of the American government as it has existed for 225 years. ..... The Constitutional questions the Affordable Care Act poses are great, novel, and grave.

The editorial, entitled ``Liberty and ObamaCare,'' lays out the constitutional problems with the affordable health care act and focuses on the bill's centerpiece: the individual mandate to purchase health insurance. As the editorial notes, the case against this provision is anchored in ample constitutional precedent, and I quote their conclusion:

The Commerce Clause that the government invokes to defend such regulation has always applied to commercial and economic transactions, not to individuals as members of society. ..... The Court has never held that the Commerce Clause is an ad hoc license for anything the government wants to do.

I urge my colleagues to read this article, and I ask unanimous consent that it be printed in the Record.


Mr. KYL. Finally, continuing on the point about the argument on ObamaCare and referring to a different piece that appeared in the Wall Street Journal, I wanted to talk just a little bit in more detail about the justification of this mandate to purchase health insurance, the requirement that every individual in the United States be the recipient of a specifically defined policy by the U.S. Government.

The rationale the government has provided is that if we do not do this, then free riders or people who do not have insurance but might get sick will end up shifting all of the burden of their care onto the rest of us, and therefore the government needs to regulate that by forcing everybody to buy insurance. On March 20 the Journal published a piece by Douglas Holtz-Eakin and Vernon Smith, a former CBO Director and an economics professor, respectively, which I think really debunks this argument on the merits. It explains the real reason this mandate, as well as a dramatic expansion of Medicaid, is unconstitutional. I just wanted to highlight the points they make.

First, Holtz-Eakin and Smith address this individual mandate question. States, of course, have general police power to regulate the conduct of their citizens, but Federal power, by contrast, is very limited over individuals.

The authors make the important point that heath care policy has traditionally been a State function. Health care needs relate to individuals and vary from person to person and region to region. As a policy matter, States have a better understanding of what kind of improvements to health care access are needed.

Here is what they wrote:

The administration's attempt to fashion a singular, universal solution is not necessary to deal with the variegated issues arising in these markets. States have taken the lead in past reform efforts. They should be an integral part of improving the functioning of health-care and health-insurance markets.

If the States have the legal power to address health issues and are better equipped to do so, then where does the justification for Federal jurisdiction come from? The authors note that the administration's argument is that the Federal Government mandate is needed to address the cost-shifting, the thing I talked about before. But they note that this is a red herring. ``In reality,'' the authors write, ``the mandate has almost nothing to do with cost-shifting.'' That is because, in actuality, the young and the healthy--the people who are not buying health insurance--aren't imposing much of a burden on the system because they do not get sick that often. They do not need as much insurance because they do not need as much health care. The authors say that ``the insurance mandate cannot reasonably be justified on the ground that it remedies costs imposed on the system by the voluntarily uninsured.'' In other words, as I said, there is not that much free-riding going on.

The authors conclude that the real purpose of the mandate is not to decrease the costs of uncompensated care, it is meant to force the young and the healthy to buy health insurance at rates far above the amount and scope of coverage they actually need because they are generally healthy individuals. But this extra money will help fund health insurance companies and therefore offset the huge increased costs imposed upon them by ObamaCare's many new regulations. This is the real reason for the individual mandate. In fact, as an amicus brief by over 100 economists points out, ``The [Affordable Care] Act is projected to impose total net costs of $360 billion on health insurance companies from 2012 to 2021.'' With the mandates, however, ``insurance companies can be expected to essentially break even.'' This is no coincidence.

If this is the real justification for the mandate to purchase health care, I submit it should have been done through an enumerated power--perhaps under the tax power of the Federal Government, which is at least one of the powers the Constitution explicitly provides.

In any event, this individual mandate cannot be justified to regulate interstate commerce. The supporters of the mandate have therefore introduced a second argument. They say health care is just different from all other commerce. It is bigger. Everybody has to have health care--as if they did not have to have food on the table or shelter over their head or clothes on their back and so on. In any event, they say health care is different and somehow this difference gives Congress the right to force people to buy government-mandated health insurance under its power to regulate interstate commerce. But the argument that ``this particular market is just different'' is beside the point even if it were true because it does not articulate a constitutional limitation that is judicially enforceable.

The question before the Court is whether there is any limit to Congress's power to regulate commerce. Obviously, the Framers would never have countenanced a Federal requirement to purchase a product so that the government could then regulate it. So what limit on constitutional power is suggested by the health care market? None. That is precisely the point. The government cannot draw a line, and, as a result, it would have to argue that there is no limit to its powers, and that, of course, would run counter to the reason the Framers put limitations into the Constitution.

The individual mandate is not the only provision in ObamaCare that is constitutionally impermissible. The Medicaid expansion is also violative. While Congress has well-established power to use its purse strings to encourage the States to adopt certain Federal policies, it cannot force them or compel them to do so. ObamaCare's Medicaid expansion essentially coerces the States into complying with new Medicaid policies.

This occurs in two different ways. First, if a State does not comply with the ObamaCare eligibility expansion, it would lose all of its Federal Medicaid funds--even for patient populations that the State had already covered long before ObamaCare was passed. Few if any States would be able to continue their existing Medicaid Programs if they lost all of this Federal funding.

An amicus brief signed by over 100 economists examined Medicaid data to determine the economic impact of States losing all of their Medicaid funds, and it found that if States were forced to absorb Federal Medicaid expenditures into their own State budgets, ``the State's total budgetary expenditures would jump by 22.5 percent.'' In other words, there is no real choice. The options for States are to do as the Federal Government says or leave Medicaid, which by now is so engrained in the care for the indigent that unwinding it, in effect, disentangling it from existing Federal-State relationships, would be virtually impossible and would obviously jeopardize care for the population without other health coverage.

This is coercion, plain and simple. It is unconstitutional.

Second, ObamaCare expands Medicaid eligibility to everyone under 138 percent of the Federal poverty level. For individuals who make less than 138 percent of the poverty level, ObamaCare provides no means for complying with the individual mandate other than enrolling in Medicaid. In their brief to the Supreme Court, the States suing over the Medicaid expansion said it best:

When Congress mandates that Medicaid-eligible individuals maintain insurance, but provides no alternative means for them to obtain it, it is impossible to label the States' participation in Medicaid voluntary.

If it is the only way someone can get it, it is not voluntary.

Well, ObamaCare, as a whole, cannot survive without these unconstitutional provisions, and these are the reasons I believe it will and can be struck down as unconstitutional.

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