.

.

Tenth Amendment Center: Executive Orders, Obamacare and the Constitution

...from Tenth Amendment Center

On Oct. 12, 2017, Pres. Donald Trump signed an executive order (EO) broadly intended to facilitate the sale of health insurance across state lines. Conservatives let out a collective cheer, believing the measure will lower the cost of health insurance, something the poorly named Affordable Care Act failed to do. But few even paused to consider the constitutional ramifications of the executive order.

In fact, there exists little substantive difference between the Trump executive order and Pres. Obama’s 2012 EO that created the Deferred Action for Childhood Arrivals (DACA). Both measures used executive power to implement policies Congress had previously refused to approve. Attorney General Jeff Sessions called the DACA EO a “unilateral executive amnesty,” and said Obama “deliberately sought to achieve what the legislative branch specifically refused to authorize on multiple occasions. Such an open-ended circumvention of immigration laws was an unconstitutional exercise of authority by the executive branch.”

The Trump EO takes the same approach. As the Washington Post reported, “The executive order will fulfill a quest by conservative Republicans, especially in the House, who have unsuccessfully sought for more than two decades to expand the availability of association health plans, allowing them to be sold, unregulated, across state lines.”

While the Obamacare executive order may well achieve some worthwhile policy objectives, we should also consider the constitutional ramifications. Does Pres. Trump have the authority to make these proposed regulatory changes to Obamacare, and more general interstate insurance sales?

Simply put – no.

Constitutional Background

The federal government has involved itself deeply in virtually every aspect of America’s healthcare system – from insurance to actual health care delivery. This federal intrusion started long before the passage of the ACA. Medicare and Medicaid effectively established a nationalized healthcare system years ago. Obamacare merely expanded on that foundation.

To understand the constitutional issues surrounding the Trump EO, we need to peel back a number of layers. As we do, you will find unconstitutional federal action at every level.

To begin with, Obamacare, Medicaid and Medicare are all unconstitutional based on original intent of the Constitution as ratified. Congress was never delegated any power over healthcare policy. It was made clear during the ratification campaign that all powers in the general government were expressly delegated, most of which are enumerated in Article I, Section 8. The Tenth Amendment makes this rule of construction explicit by reiterating that all unlisted powers are reserved to the states or the people.

Despite the unconstitutionality of any federal healthcare program or law, Congress, the president and the courts all operate on the basis that these healthcare initiatives are perfectly legal. State-level Obamacare exchanges have already been set up, and federal agencies have acted as enforcement mechanisms for the law. Though its very existence is also unconstitutional, the Health and Human Services Department has been at the forefront of carrying out healthcare policy out at a national level – particularly when it comes to the implementation of Obamacare.

All legislative authority is vested in Congress. This point is so salient that the drafters of the Constitution made it made overt and explicit in Article I, Section 1. Therefore, Congress has sole power to create law and does not possess any authority to delegate this power to other actors within the government, including the president. When Congress passes broad “laws” allowing the president to essentially fill in the blanks and dictate policy as he sees fit, it abrogates its constitutional responsibility. Doing so violates a basic rule of legal construction – “Delegata potestas non potest delegar” – no delegated power can be further delegated.

Article II makes clear that the president’s duty is to “faithfully execute the laws of the union.” In other words, he puts the laws Congress makes into effect.

However, the president can refuse to enforce a law on the basis that the law is unconstitutional (and thus no law at all), instructing his subordinates not to take action on it. Thomas Jefferson stressed the importance of this in a famous letter:

“My construction of the Constitution is…that each department is truly independent of the others and has an equal right to decide for itself what is the meaning of the Constitution in the cases submitted to its action; and especially where it is to act ultimately and without appeal.”

In another letter, Jefferson went beyond this to write that each branch “is to act ultimately and without appeal on any law, is the rightful expositor of the validity of the law, uncontrolled by the opinions of the other co-ordinate authorities.”

If Congress feels that the president’s refusal to enforce a law on the basis of its perceived unconstitutionality is particularly egregious, the president makes himself subject to the impeachment power.

Selling Insurance Across State Lines

The federal government doesn’t expressly prohibit selling insurance across state lines. Until March 2010, no federal law allowed for or prohibited cross-border purchasing of health insurance. So, why don’t we see companies selling interstate policies? The main problem lies in the complex patchwork of state laws that creates barriers to entry. In order to facilitate a robust interstate insurance market, the federal government would have to step in and create uniform regulations that override existing state laws.

Up until the Supreme Court decision in United States v. South-Eastern Underwriters Association (1944), the federal government was correctly understood to have no authority to regulate insurance and left it completely to the states. The 4-3 decision held that the feds could regulate insurance based on the commerce clause.

In response, Congress passed the McCarran-Ferguson Act (1945). The law grants states the authority to regulate the “business of insurance” within their borders without interference from federal regulation unless federal law specifically provides otherwise.

To some degree, McCarran-Ferguson limits federal power and forces the federal government to recognize a state’s inherent right to promulgate and enforce its own insurance regulations. But because of the SCOTUS decision in U.S. v. Southeastern Underwriters, the specter of federal insurance regulations always hangs over the states.

With every state enforcing its own rules and regulations, selling insurance across state lines can be costly, and many states outright prohibit it. Congress has attempted to pass laws that would override McCarran-Ferguson and allow the feds to create a framework to encourage interstate sales on multiple occasions without success.

So, when it comes to selling insurance across state lines, it’s not simply a matter of the federal government tearing down barriers that it put in place that hinder interstate sales. They don’t exist. To facilitate such sales, the federal government must override existing individual state regulatory schemes and impose its own universal regulations on all of the states.

The Affordable Care Act adds another layer to the cake. It overrides aspects of McCarran-Ferguson to permit states to form healthcare choice interstate compacts allowing insurers to sell policies in any participating state. But any such policies are heavily regulated by federal law, as the National Conference of State Legislatures outlines.

“The insurer would remain subject to the market conduct, unfair trade practices, network adequacy, consumer protection, and dispute resolution standards of any state in which the insurance was sold, be licensed in each state, and notify consumers that it was not otherwise subject to the laws of the selling state. HHS would have to approve interstate insurance sales, certifying that the coverage would be as least as comprehensive as that sold through the exchange, provide coverage and cost-sharing protections at least as affordable and cover at least as many residents as coverage under Title I, and not increase the federal deficit.”

Trump’s Executive Order

The Trump executive order directs the Department of Labor to consider proposing regulations or revising guidance that would expand access to health coverage by allowing more employers to form association health plans. AHPs allow groups, such as an association of small businesses, to pool together and buy insurance. Sales can cross state lines. Ostensibly, execution of the EO would loosen the federal rules governing these insurance policies.

The EO positively authorizes the facilitation of healthcare services over state lines. However, it does this not by voiding aspects of the Affordable Care Act, but by embracing them. Because the Affordable Care Act grants (unconstitutionally) the president a large amount of power to alter the law himself, he is acting within the unconstitutional intentions of the law. This transfer of power implies that Congress can negate the explicit boundary of legislative power in Article I, Section 1, simply by deferring it to the president.

It cannot.

Far from considering parts of the Affordable Care Act unconstitutional, the executive order actually assumes the law constitutionality legitimate and that it should just be enforced in a different manner. Section 7, titled “General Provisions,” makes plain that nothing in the order “shall be construed to impair or otherwise affect… the authority granted by law to an executive department or agency, or the head thereof,” and iterates that the law “shall be implemented consistent with applicable law and subject to the availability of appropriations.”

The order also instructs the various unconstitutional agencies to propose different unconstitutional regulations – which they cannot constitutionality do – impeding upon the reserved power of the states. Through the order, the president is not only writing policy himself, he is instructing various agencies to write policy as well. Effectively, he is crafting the law through executive fiat for his own expediency.

The action is illegitimate and unconstitutional, and is eerily reminiscent of Obama’s pledge to utilize the “pen and phone” to write policy when Congress did not act in the way he liked. This time, none of the Republicans who railed against Obama for doing so are anywhere to be found.

Conclusion:

An unconstitutional exercise of executive power takes no step forward for liberty, even if it advances a policy that may seem to expand freedom. In the first place, it only remains in effect at the whim of the current president. The next president can completely reverse the effects with a stroke of his or her pen. Even Trump could change his mind and reverse course.

All it takes is another EO.

More significantly, the power you favor granting to the executive today will be the same power that egresses upon your liberties in the future. Allowing the president to craft his own policy – any policy – is detrimental to the masses. It allows power to be siphoned away from its intended repository and places it in the hands of a virtual monarchy.

This is government by individual decree – not by a representative legislature. Under this kind of system, one would just as well do away with Congress altogether. To undermine the travesty that is Obamacare, the true remedy available is for the president to instruct the executive agencies not to enforce the law at all.

When it comes to executive orders, it is a tragic mistake to base one’s support upon specific outcomes rather than the legitimacy of the power itself. Even if a particular order’s outcome seems to be a desirable one, utilizing illegitimate power conferred to the executive to bring about the outcome solidifies a precedent for future occupants of the office. This process compounds over time and gradually transforms office of the executive into essentially an all-powerful king.

Wherever the president can act where Congress doesn’t by imposing his own views upon the populace, craft policy within the executive branch, and guide unconstitutional agencies to his own dictums, we have accepted the same arbitrary government that the founders sought so vigorously to unravel.

Mike Maharrey contributed to this article


Dave Benner
October 21, 2017 at 11:48AM

Popular posts from this blog

Tenth Amendment Center: Modern Nullification: A Winning Policy

Tenth Amendment Center: Colorado Committee Passes Bill to Repeal High-Capacity Magazine Ban

Tenth Amendment Center: The Purge Ramps Up as Banking Institutions Get Involved: Good Morning Liberty 08-22-18