Crowdfunding As Socialized Healthcare

Charity, ostensibly a central moral and social American institution, is alive and flourishing–online, on crowdfunding sites, as thousands and thousands of perfect strangers and sometimes acquaintances and friends and family, line up to donate to the latest plea for help. (Perhaps someone needs a vital organ transplant, extended chemotherapy and radiation, or a new, life-saving alternative therapy; or perhaps, like most Americans, they went into a hospital hoping to emerge healthier, and instead, found themselves facing a foreclosure-inducing medical bill.) As Bloomberg reports in an article unironically titled ‘America’s Healthcare Crisis Is a Gold Mine For Crowdfunding–later changed to ‘American Health Care Tragedies Are Taking Over Crowdfunding’:

Crowdfunding platforms such as GoFundMe and YouCaring have turned sympathy for Americans drowning in medical expenses into a cottage industry….Business is already booming, and its leaders expect the rapid growth to continue no matter what happens on the Hill. “Whether it’s Obamacare or Trumpcare, the weight of health-care costs on consumers will only increase,” said Dan Saper, chief executive officer of YouCaring. “It will drive more people to try and figure out how to pay health-care needs, and crowdfunding is in its early days as a way to help those people.”

Indeed:

Growth has been rapid….one million campaigns set up over the previous year had raised $1 billion from nearly 12 million donors. By February 2016, the total was $2 billion. In October 2016, it was $3 billion, from 25 million donors….GoFundMe had indicated that $930 million of the $2 billion raised in the period the study analyzed was from medical campaigns….medical fundraisers made up 70 percent of GiveForward’s campaigns. The combined companies have 8 million donors who have contributed $800 million to a wide range of campaigns. A big part…was donated to medical campaigns…It was approaching 50 percent of all fundraisers at YouCaring before the acquisition, and the growth rate is set to triple this year.

Indeed, no matter what the flavor of the current healthcare system, it will not take care of most Americans, and neither will it do anything to drive down the rising costs of healthcare. Short of progressive taxation, a national single-payer system, and extensive structural reform to bring the American healthcare system into line with the ‘best practices’–both financial and clinical–of the best national healthcare systems in the world, Americans look destined to continue pay the highest rates for healthcare in the world, while receiving outcomes that can be described, at best, as ‘mediocre.’ In these conditions, the success of crowdfunding campaigns is entirely unexpected and unsurprising; ‘look to private resources’ is the fairly explicit message of the current healthcare system, and it is there that Americans have turned. ‘Private resources’ are normally taken to mean financial support from family; Americans seem to have found a much larger family of sorts; a blessing of a kind, one supposes.

But mostly, reactions to this state of affairs can hardly afford to be sanguine. Such methods of paying for healthcare costs suffer from too much contingency; some campaigns succeed, yet others fail. Perhaps your pitch was not ‘moving’ enough; perhaps you did not include the right pictures of cute families; perhaps potential donors were financially exhausted. The health of the citizens of any country, let alone one with pretensions to greatness, should not be riven by so much uncertainty, so much dependence on the unpredictable largesse of others.

‘But Already It Was Impossible To Say Which Was Which’

It is almost accepted wisdom among political punditry that in recent times, American political and cultural life is characterized by two revolutions: the Fiscal Rectitude one and the Cultural License one. The former was won by the Republican party: it is committed to austere deficit reduction and budget balancing by attenuating social programs and tax cuts to ‘wealth makers’ as an essential component of trickle-down economics. (These serve as vital prongs of polemical and rhetorical attacks on big government and serve to provide the Tea Party much of its bombastic ballast.) The latter was won by the Democrats: it is committed to gay marriage, feminism, gay rights, and multiculturalism (among other things; please insert your own favored Godless activity here).

This is an exceedingly crude picture–and certain to appear to be a caricature to supposed ideologues on both sides of the political and cultural spectrum–but it works as a rough heuristic. It is especially crude when one considers that most Americans benefit from Big Bad Scary Government and would like some form of it to continue to loom large in their lives, and conversely when, for example, women and African-Americans still do not find themselves adequately represented in either economic or political leadership, and when gays, outside of urban concentrations, still need to keep their heads low. But, like I said, it’s a rough picture.

It is an apparent consequence of these two ‘revolutions’ that in the Battle of Who Can Display More Fiscal Rectitude Democrats have steadily moved rightwards in an effort to minimize their electoral losses, thus slowly coming to occupy much of the so-called center, which, much like the magnetic pole, appears to be a shifting locale; thus, the current American political center is certainly rightward of many of its earlier positionings. This current location of the ‘center’ and the Democrats’ move towards it perhaps explains why in the first presidential debate Barack Obama found himself in so much agreement with his opponent.

For instance, on Social Security:

You know, I suspect that on Social Security, we’ve got a somewhat similar position. Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker — Democratic Speaker Tip O’Neill.

Barack Obama also found himself in so much agreement with his opponent, because besides being a matter of substantive policy, like the free-market-and insurance company-friendly healthcare plan called Obamacare, he is a compromiser first and foremost, even when in possession of a strong political hand. Psychological analysis of this need to be approved of by his opponents is already a favored pastime among many who gnashing their teeth over his invertebrate tendencies. It is unsurprising then too, that Obama found himself unable to summon up much passion when it comes to debating policy details. Wow could anyone generate heat and light in the midst of broad agreement? By quibbling over details? Hardly the stuff of fire and brimstone debates.

I do not doubt audiences for the second and third debates will see a different Obama, one prepared to be more contentious. His handlers will have apprised him of the disastrous feedback from ‘focus groups’, I’m sure. But those prepared to look beyond the huffing and puffing, will, I’m afraid, resemble nothing so much as the creatures clustered around Mr. Jones’ Manor farmhouse, looking in, desperately trying to find a distinction with a difference.

Note: Many will find my characterization of Obama and the Democrats unfair: surely, they are better on the environment, on their commitment to healthcare, and so on? But the devil lurks in the details, and it is in the bare particulars of actual legislation that we find broad agreement among those who inhabit Capitol Hill.

Richard Epstein’s Overdetermined Critique of the Roberts Ruling

Richard Epstein offers an interesting critique–based on the alleged inseparability of the power to regulate commerce and the power to tax–of John Roberts’ ruling in the ACA case. If it’s not an activity the government can regulate, then it’s not something the government can tax either. Thus, Justice Roberts should have struck down the individual mandate:

As a matter of constitutional text, legal history and logic, the power to regulate commerce and the power to tax should not be separated. It is not good for the court or the country that the chief justice’s position in such an important case is confused at its core.

Epstein finds ample precedent for his understanding of the inseparability of the power to regulate and the power to tax:

In the Child Labor Tax case of 1922, the Supreme Court refused to uphold a tax equal to 10 percent of the net profits of any firm that shipped goods into interstate commerce if the firm used child labor anywhere in its plants. Chief Justice William Howard Taft noted that…Hammer v. Dagenhart (1918) forbade Congress to use its commerce power to prohibit outright the shipment of ordinary goods across state lines because they were made in factories that used child labor. A heavy tax…could not be used to mount an end run around this constitutional obstacle to its own power.

The same point was reinforced in 1936 in United States v. Butler, which struck down a tax on agricultural commodities because it sought to achieve the then unconstitutional regulatory aim of reducing the total acreage in agricultural production. After the 1942 case Wickard v. Filburn, when the Commerce Clause was held to permit such regulation, the tax became just as permissible as direct regulation. Wickard expanded the scope of federal power, but it did nothing to upset the constitutional parity between the taxing and commerce powers.

So Epstein only needs the inseparability doctrine for his argument to work. For having found the activity in question–non-participation in the healthcare market–was not something the government could regulate via the Commerce clause, then it failed to be an activity the government could tax either.

But Epstein seems to also think that the tax argument fails on its own merits. For he offers us an ‘originalist’ reading of the relevant Constitutional clause:

By giving Congress independent powers over taxation and other revenue sources, the Constitution ended that dependency. But as a quid pro quo, the Constitution also restricted the use of these revenues to classical public goods — benefits that must be given to all citizens, if given to any — like paying off national debts and paying for the nation’s defense. General welfare, mentioned in parallel with these two phrases, is best read as covering only matters that advance the welfare of the United States as a whole. The redistribution of income, or “transfer payments” among citizens, like those mandated under the Affordable Care Act, doesn’t qualify for taxation in this originalist reading of the Constitution.

This is a curious business now. Remember, this supposedly optimal reading is not required for Epstein’s argument to work. It does however, let him deploy some additional ideological machinery.  It suggests that ‘healthcare’ is not a ‘classical public good’ like the payment of national debts or the budgetary requirements of national defense.  It suggests that ‘healthcare’ cannot thus, be understood as ‘general welfare,’ which rather is to be understood in more abstract terms as that which might benefit the nation–but presumably, not its people–‘as a whole.’ (Note that provisions for healthcare are defined as ‘redistribution of income’–the horror!)

The real problem, it emerges, is not the separation of the powers to regulate and tax for which, in fact, there is a great deal of precedent; witness, for instance, the greater reliance on taxation, as opposed to direct regulation, of alcohol and tobacco consumption. The substantive issue for Epstein is that Roberts has suggested that ‘healthcare’ might have something to do with ‘public goods,’ with ‘general welfare.’ In short, it might be a business that government could concern itself with.

Justice Roberts is Playing a Long Game

Time now to tabulate the damage done by yesterday’s Supreme Court ruling in  National Federation of Independent Business et al. vs Sebelius, Secretary of Health and Human Services et al. While Justice Roberts has made himself look extremely distinguished, statesmanlike, non-partisan, and touchingly concerned about his place in posterity, an appraisal that I’m sure he was soaking up yesterday, he might be playing a long game, gutting the Commerce Clause as  a ‘fundamental lever of constitutional power for the left’–from Corey Robin, who I’m sure will hand out some contrarian commentary on this ruling pretty soon–, redefining  the relationship between Federal government and State administrations, and further problematizing the notion of judicial restraint. (I realize that Justice Roberts is only one of five who signed on to the majority ruling, but I suspect he had a great deal to do with its crafting.)

My unease was sparked by the first few comments I read on the SCOTUS live blog yesterday:

[T]he entire ACA is upheld, with the exception that the federal government’s power to terminate states’ Medicaid funds is narrowly read.

A reminder. Part of the majority opinion reads:

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.” (p. 55)

This is an interesting claim to make, for as Neal Katyal notes,

[U]ntil now, it had been understood that when the federal government gave money to a state in exchange for the state’s doing something, the federal government was free to do so as long as a reasonable relationship existed between the federal funds and the act the federal government wanted the state to perform.

In potentially ominous language, the decision says, for the first time, that such a threat is coercive and that the states cannot be penalized for not expanding their Medicaid coverage after receiving funds. And it does so in the context of Medicaid, which Congress created and can alter, amend or abolish at any time.

And in striking down the individual mandate under the commerce clause, especially by relying on the specious distinction between activity and inactivity in the healthcare market, the ruling is even more problematic.  (Pages 16-27 of the ruling are worth reading in their entirety.)

These aspects of the ruling have now been adequately commented on. Indeed, those opposed to the ACA see it as a strategic victory, one likely to have long-term repercussions, an especially significant factor given the long-term conservative bent this Court is likely to have. Randy Barnett, for instance, notes that,

Today, the Roberts Court reaffirmed the “first principle” announced by Chief Justice Rehnquist some 17 years ago in Lopez: the federal government is one of limited and enumerated powers. It accepted all of our arguments about why the individual insurance mandate exceeded the commerce power  “The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause,” wrote Chief Justice Roberts. “That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.”  Then the Court went farther to invalidate the withholding of existing Medicaid funding as coercive, thereby finding an enforceable limit on the Spending Power.

Lastly, and even more interestingly, the court reasoned its way to its conclusions in a way that is sure to raise questions about judicial restraint. Katyal again:

The court had to rewrite the statute to save it from a constitutional problem by eliminating the part of the law that permitted the federal government to withdraw Medicaid financing. The result, as Justice Anthony M. Kennedy warned, was effectively to leave in place a statute that Congress never enacted….[Thus] courts are given the power to rewrite legislation altogether, and leave legislation in place (like health care) in a form that Congress might never have approved and that would be difficult to ever repeal.

Of equal concern is the court’s analysis of the constitutionality of the individual mandate. While the court upheld the mandate, it did so by rejecting the federal government’s claim that it was regulating commerce. There is no judicial precedent or language in the Constitution that compelled that result; instead, the majority reasoned by constitutional inference.

The Supreme Court’s reliance on this ruling in other cases that require the relationship between the Center and states to be clarified will soon make clear what its true significance really is.

The End is Nigh: The ACA Is Upheld (Sort Of)

Today’s blog post writing hasn’t gone so well. I thought of writing a post on the correspondence between Voltaire and Rousseau, as a way of reminding ourselves of the 300th birth anniversary of the latter, then, perhaps commenting on the connections between Frankenstein and Romanticism, and then finally, noting Aquinas’ resolution of the theological problems caused by cannibalism. But nothing went anywhere. (Perhaps I’ll return to these fascinating topics at a future point in time.) I was distracted, as most people this morning were, by the impending news of the Supreme Court’s ruling on you-know-what (more precisely, National Federation of Independent Business et al. vs Sebelius, Secretary of Health and Human Services et al. ) So, the sheer force of circumstance have forced me to junk all those drafts and turn to noting this momentous decision.

Then, finally at 10:08 AM, the news. A 5-4 ruling (Roberts, Ginsburg, Breyer, Sotomayor, Kagan for; Kennedy, Scalia, Alito, Thomas against) that rules ‘ the entire ACA is upheld, with the exception that the federal government’s power to terminate states’ Medicaid funds is narrowly read.’ (from the SCOTUS live blog).

More: the individual mandate is a violation of the Commerce Clause, but survives as a tax:

Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it.

So, the individual mandate survives as a tax. Frank Pasquale has just pointed me to a remark made by Mark Weiner in 2010:

As a constitutional matter, the bottom line is that challenges to Congress’s power to tax and spend are never successful, and I think it would absolutely stun the tax community if this tax were held unconstitutional.

The SCOTUS live blog continues:

[A] majority of the Court holds that the Medicaid expansion is constitutional but that it w/b unconstitutional for the federal government to withhold Medicaid funds for non-compliance with the expansion provisions….the Constitution requires that states have a choice about whether to participate in the expansion of eligibility; if they decide not to, they can continue to receive funds for the rest of the program.

Part of the majority opinion reads:

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.” (p. 55)

Plenty more to come later. For the time being, in lieu of serious commentary on the ruling, I’ve been juvenile, sending off a series of Tweets and Facebook updates:

The stars and stripes have been morphed into the hammer and sickle

The hammer and the sickle are gleaming, because a crescent moon is shining on them

Starting today, turbans replace baseball caps as symbols of America

No more, “Wassup bro?” – from now on it’s “Greeting comrades!”

Alternatively, you could say “Salaam brothers!”

Lame, yes, I know, but come on, why so serious?

And with that, I’m going to wind up this morning’s ‘blogging,’ one spectacularly derailed by the Supreme Court, and the millions who decided to tune in to this piece of political theater.