Today, Attorney General Mike DeWine and the Warren County Commissioners (all Republicans) filed suit in federal court in Columbus in yet-another constitutional challenge to the Affordable Care Act. Specifically, the suit challenges a fee on State and local governments (and most private companies) health insurance benefit plans authorized by the ACA to fund the reinsurance pool which stabilizes health insurance premiums on the exchange in case insurers projections of health claims is off as a result of those who had been denied insurance for pre-existing conditions become insured.
Stephen Koff, the Washington Bureau Chief of the Northeast Ohio Media Group, has the best primer on the ACA provision at issue I’ve seen so far. Both his coverage today and when DeWine first started to make noise earlier this month about it provides a good walk through of the issues on what is, admittedly, a very complicated topic. He’s already found at least one constitutional attorney who thinks DeWine’s case is bunk.
The Warren County Democrats showed up at the event to call out the wasteful spending for this purely partisan frivolous lawsuit. In a released statement, Warren County Democrats declared:
“We challenge the claims by Messrs. DeWine, Young, and Fornshell that the Transitional Reinsurance Fee on state and local government employers is unconstitutional. How is this fee fundamentally any different than the employer match on Medicare fees that government employees pay?”
“We believe that the real intent of our Republican state and county leaders is to score political points by attacking the Affordable Care Act. The cost of this program is minimal, approximately 92 cents per Warren County resident per year, or $2.76 in total. The real question is, how much will Warren County spend to fight this unnecessary legal battle, led by Attorney General Mike DeWine?”
According to one reliable source who was in attendance at today’s press conference, DeWine was unable to explain how the ACA provision is different from Medicare fees that government employees pay.
DeWine, who unsuccessfully attempted to have the entire law declared unconstitutional, again declared that this provision was “an unprecedented assertion of government power.” He then cites in challenging the ACA reinsurance fee the “Tenth Amendment, the related anti-commandeering doctrine, and the doctrine of intergovernmental tax immunity.”
Here’s why DeWine’s case falls apart instantly absent incredible acts of conservative judicial activism. First, as to this being “unprecedented” I present to you this 22-page long law review article that discusses the legal cases dealing with when the State taxed the federal government and vice versa. Our history is replete with cases in which the federal government imposed taxes and fees on state government (and had those taxes and fees upheld.) Indeed, since neither the “anti-commandeering doctrine,” nor the intergovernmental tax immunity doctrine have any explicit constitutional language creating it, but is instead, judicial doctrines created by the Supreme Court, it’s pretty clear that the Courts have dealt with hundreds of these “unprecedented” cases for centuries.
DeWine’s complaint cites the U.S. Supreme Court case regarding the ACA’s Medicaid expansion to argue the re-insurance program amounts to a violation of the anti-commandeering doctrine (in which Congress commands the States to take action to enforce federal law.) But in that case, the Court took the mandate to the States regarding the Medicaid expansion and ruled it was discretionary. Then DeWine’s own complaint spells out in two paragraphs how the ACA does not, as DeWine contend, violate the “anti-commandeering doctrine when it comes to the reinsurance program:
So no, this provision does not violate such a doctrine when the State is being asked to pay a fee (that every other group insurer, essentially, must pay) to fund a federal program after electing not to create its own under federal law.
To put this in the simplest terms I can, the ACA’s reinsurance fee no more violates the 10th Amendment and constitutes as an unconstitutional violation as when the State government withholds federal income taxes from its employees’ paycheck (which has been upheld only one hundred and ten years ago in South Carolina v. United States.
The intergovernmental tax immunity principle is not as iron-clad as DeWine suggested today:
“To put this simply, governments don’t tax other governments,” said DeWine. “This illegal taxation is another example of federal overreach the administration’s refusal to operate within the boundaries of federalism.”
Again, that’s not true. As the law review article points out (you read all twenty-two pages, right?), the doctrine has been recognized as more of a bar on state taxation of the federal government than vice versa. At the risk of oversimplification, the Court has upheld federal taxes applied to State government in the following instances:
- When the tax at issue is assessed against both private sector actors and state government;
- When the tax is over something that is generally considered more of a commercial function than a traditional government function;
- When it is tied to employee compensation and not government spending on say things like building roads and schools; and
- The tax must impose a real, substantial burden on state government as opposed to an imaginary or negligible one.
It’s pretty clear that the reinsurance fee meets the first three points very easily. As to the fourth, I’ll let Warren County Commission Dave Young answer that one:
Young admits that the $113,904 fee doesn’t pose significant harm to Warren County, which has an annual budget of $65 million.
He said the larger issue centers on what he calls an “unprecedented power grab” by the Obama administration to unfairly “tax” state and local governments.
So, basically, right out of the gate, Mike DeWine has virtually no case. Today was about trying to grab headlines and making totally false, unsubstantiated claims about the Affordable Care Act that DeWine knew, or should have known, were false. DeWine and the Warren County Commissioners (and the four universities that joined this joke of a lawsuit) are abusing their offices for partisan politics.
Keep in mind, Dave Young cares so much with protecting the county’s tax dollars that despite the fact that his County can be represented by the Warren County Prosecutor’s Office for free, it has retained a D.C. attorney from the Hobby Lobby case to represent the county. How much will that cost these watchdogs of the taxpayers? It very well could be more than fees the County owes under the ACA.
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