When Pres. Trump issued an executive order phasing out DACA last month, the administration made it a constitutional issue, accusing Pres. Obama of overreaching his authority when he created the Deferred Action for Childhood Arrivals (DACA) by executive order in June 2012. Now Trump is following in Obama’s footsteps with his planned EO to expand access to “association health plans.”
From its first announcement on DACA, the Trump administration emphasized constitutional problems with the program. Attorney General Jeff Sessions called it “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.”
Sessions was correct in his assessment. The president does not have the authority to unilaterally dictate immigration policy. He certainly doesn’t have any constitutional power to simply override Congress with the stroke of a pen. DACA was unconstitutional from the get-go.
But now Trump is taking the exact same approach to healthcare reform. After Congress failed three times to “reform” Obamacare, Trump signed an EO that sets the stage to expand the availability of associated health plans. The order directs executive branch agencies to propose rules, regulations, and guidance that would give business associations the ability to negotiate with insurers to create plans for their members. The biggest advantage lies in the ability to sell these kinds of policies across state lines.
Rand Paul vocally supports this EO. In an op-ed published at Breitbart, Paul said, “associations like the National Restaurant Association will be allowed to form groups across state lines and, with the leverage of size, demand big Insurance bring down their outrageous premiums.”
The EO will accomplish something Republicans in Congress have tried to do for years. As the Washington Post reports, “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.”
So, if Congress can’t get it done, just have the president sign an order.
This sounds a whole lot like Obama’s rationale for DACA.
To borrow a phrase from Sessions, Trump deliberately seeks to achieve what the legislative branch specifically refused to authorize on multiple occasions.
The Problem Is Congress
Expanding association health plans (AHPs) may be great policy, but where does the president get the authority to write insurance rules? Apparently, the same place Obama got the authority to write immigration policy.
Paul claims, “Existing law allows the president to legalize these new groups and plans.” While this may be true as spelled out in statutes, it grossly violates the separation of powers written into the Constitution. As James Madison explained in “Helvidius” Number 1, the president’s power extends only to putting existing law into effect. He does not have the authority to make new law.
“The natural province of the executive magistrate is to execute laws, as that of the legislature is to make laws. All his acts therefore, properly executive, must pre-suppose the existence of the laws to be executed.”
When Congress passes broad “laws” that allow 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.
When a principal delegates power to an agent, that entity cannot transfer the power to another without specific direction. No such constitutional authorization exists. All legislative power was vested in Congress alone. Congress can’t turn the president into a legislator. It can’t simply give him a blank slate to formulate health care policy or immigration policy at his own discretion. Congress must pass specific laws. The president’s only job is to see that the laws are executed. He does not have a say in what the law should be.
But Congress has consistently punted its responsibility to write laws and allowed the executive branch to do the dirty work of legislating. Trump’s EO simply expands on this tradition. His actions are unconstitutional because he is working within a system that is unconstitutional. The president can’t constitutionally “fix” healthcare because the federal government lacks the authority to involve itself in the issue to begin with.
Insurance Across State Lines
It will probably surprise most Americans to know the federal government doesn’t prohibit selling insurance across state lines. Until March 2010, no federal law allowed for or prohibited cross-border purchasing of health insurance. The problem lies in the fact that a patchwork of state laws 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 protects the authority of each state to regulate its own health plans. But with every state enforcing its own rules and regulations, selling across state lines can be costly and many states prohibit it. Congress has attempted to repeal portions of this law in order to create a better framework for interstate sales without success.
Even so, six states (Wyoming, Oklahoma, Georgia, Maine, Rhode Island and Kentucky) have laws intended to facilitate the purchase of out-of-state insurance policies.
The Affordable Care Act adds another layer to the cake. It overrides aspects some portions 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.”
The Trump EO 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 AHPs. Ostensibly, this would loosen the federal rules governing these insurance policies.
The Bigger Picture
The federal government doesn’t have any authority to do any of this. The Supreme Court was wrong. Insurance has nothing to do with the constitutional definition of commerce. States should regulate their insurance industries and the federal government shouldn’t involve itself at all. The entire system is unconstitutional. So, what’s the harm in Trump using executive power to make the system better?
The problem lies in the expansion of executive authority. If Trump simply eliminates regulations enacted by the Obama administration, that would be less problematic. But it appears the president has directed his agency heads to propose new regulations. No matter how you slice it, that’s legislating.
Again, the problem ultimately lies with Congress. Nevertheless, allowing the president to continue to legislate further expands executive power. If we want to preserve the constitutional separation of powers between the executive and legislative branches, we should insist Congress address this mess – not encourage the president to take matters into his own hands because we like the policy outcome. Allowing the president to continue to legislate further expands executive power and distorts the constitutional system.The fact that the federal government is involved in healthcare at all is bad enough. We shouldn’t compound the problem by effectively putting all decision-making in the hands of one person.
Conservatives condemned Obama over and over again for overreaching executive authority. Today, I hear these same people cheering Trump’s healthcare EO. They can’t seem to see past the policy to the constitutional ramifications. The conservative response has been, “Trump is just undoing what is unconstitutional in the first place. As long as he’s reducing regulations, I’m OK with it.” But that’s like saying, “I realize I got really fat because I ate a lot of donuts. So, I’m going to eat more donuts because they taste good.”
If you just abandon the Constitution completely, and throw out the framework, on what basis do you ever try to limit federal power? Your opinion? Your trust in having the “right guy” in office? That the American people will wake up and demand “limited government” from their elected king?
The Constitution provides the only framework that exists within the American political system to rein in federal power. It’s the only thing we have to point to. Without it, no objective standard exists to look to and say, “This is off limits.”
America’s constitutional republic has devolved into an elected monarchy. Presidents rule by edict. Both parties complain when the “other guy” does it, but neither side will commit to holding presidents to their constitutionally delegated authority. In truth, people on both sides of the political aisle love having a king.