The Best Policy

Without Merit

Even as politics, the states’ lawsuit against health care reform makes no sense.

Barack Obama

Now come 14 attorneys general, all but one Republican, filing a constitutional challenge to the Patient Protection and Affordable Care Act, otherwise known as health care reform, alleging that certain critical components of the law exceed the power of the federal government. The suit cites two elements: first, the requirement that all individuals either purchase health insurance or pay a tax, and second, that states modify their Medicaid programs so they cover more poor people.

As virtually all constitutional scholars agree, the odds that this suit will succeed are at best marginal. The federal government has vast power to tax and to regulate interstate commerce on a rational basis. The statute’s rationale—that a person’s failure to purchase insurance has a negative impact on health care delivery and the structure of the insurance industry, so can be taxed—is squarely within that constitutional standard. Health care and health insurance, after all, are quintessential examples of interstate commerce. Moreover, although the attorneys general may not appreciate the modifications made by Congress to Medicaid coverage, Medicaid is still a voluntary program; states can opt out. For a court to invalidate either of these two central prongs of the statute, it would have to reverse jurisprudence that predates the New Deal.

So much for the legal analysis. A more enlightening way to view this litigation is as a political statement. Yes, much significant litigation—indeed some might say all—is imbued with an ideological component. But litigation should not be brought by government agencies when the chance of success is so slight as to make the filing of the suit the only visible and hoped for outcome.

There are several aspects of this lawsuit that deserve more attention. First, the attorneys’ actions represent a last-gasp effort to retain a remnant of the Reagan revolution. The congressional and executive branches of the federal government have squarely turned away from the Reagan worldview of a minimalist government. Expansive new federal statutes, or sweeping new powers granted to executive agencies, already have or are about to redefine the health care, financial services, environmental, educational, and energy sectors. Having lost in the overtly political and democratic branches of government, opponents of health care reform are turning to the one remaining branch of government—the courts. The state attorneys general are hoping to find the Reagan worldview enshrined in the Constitution. It isn’t.

In asserting their case, the attorneys general are bringing back an ideological talking point whose intellectual hollowness has already been proved: the “new federalism.” During the 30 years they dominated the executive and legislative branches in Washington, Reagan “new federalists” often justified limits on the scope of federal activity by pointing to the expansive powers retained by the states. The logical extension of their argument was a rise in state activism—especially in prosecuting market abuses, where the intentionally neutered role of the federal government cried out for some body to fill the void.

The conservative response to this development was predictable: horror that any body at the state level would interfere in matters of national economic scope. The incoherence of the “new federalist” position became evident when its proponents opposed the use of power by either the federal or state governments. So-called “new federalism” was then seen for what it is: little more than an excuse to oppose any governmental activism or intervention in the marketplace. In truth, “new federalism” was not a theory about the proper allocation of power between the states and the federal government. It was an intellectual cover for a “new libertarianism.” The price we have paid for that position is now clear to all.

Interestingly, the increase in state-led use of the courts for traditional enforcement that was spawned by the “new federalism” will continue to be successful, even as the federal government returns to its traditional role. In this area, at least, the counterrevolution it spawned may be more lasting than the Reagan revolution itself. If “new federalism” was supposed to be merely an ideological cover for political opposition to any governmental intervention in the market, it has failed, for in its wake there will be an increase in both federal and state intervention.

On a more practical political level, credit must be given where credit is due: On one point, the attorneys’ case is factually correct. Going forward, the states are going to be forced to pay for a significant part of the expanded Medicaid coverage that will result from health care reform’s expansion of Medicaid eligibility to those with incomes below 133 percent of the federal poverty level. Once a transitional federal subsidy to help pay for this increased coverage expires, however, states will have to pay a larger bill. But this is a policy issue for political resolution, not a legal matter for judicial involvement. State finances are a shambles, and will be for some time, given the structural problems they are facing. But this is not a reason to strike down the statute.

Yet in a broader context, the political concerns of the state attorneys general are misplaced. Not only will their litigation efforts fail, so will their political calculus. The public opposition to the health care bill, while initially virulent in some quarters, was to a great extent driven by the process of enactment, not the underlying substance. As the “teabaggers” have become more incoherent and as the provisions of the law have become better known, public support in most quarters has expanded. As a purely political matter, many of those who filed the cases will ultimately regret their opposition to what is sure to be a very popular law.

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