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Adventures in Ad Law, cont’d

The whole idea of “administrative law” — regulations with the force of law promulgated by executive agencies pursuant to powers delegated by Congress — squares uneasily at best with the Constitution and its scheme of separated powers. Obamacare presents us with a case study that amounts to a reductio ad absurdum. The agencies promulgating Obamacare regulations will produce a code that rivals the United States Code in length and complexity. As we can see with the controversy over the “preventive services” regulation for women, these regulations will seriously impinge on constitutional liberties — as the Obamacare law itself does — only more so. God help us.

The “preventive services” regulation essentially compels all institutions other than churches to include contraception, sterilization and abortifacients in the health insurance provided to employees. The “accommodation” subsequently announced by President Obama and Secretary Sebelius compels the health insurers (rather than otherwise compelled religious institutions) to provide these services for free. Here we move from absurdity to despotism, or to absurdity combined with despotism. King Barack has spoken.

How does that work? I would love to see the regulation. There is just one problem: the regulation doesn’t exist.

How did we get here? The “preventive services” regulation followed the course prescribed for notice-and-comment rule making under the Administrative Procedure Act. It is a faux legislative process. Despite the sudden controversy aroused by the regulation, it’s been a long time comin’.

Once Congress passes a law delegating its lawmaking powers, the agency publishes a proposed regulation and asks for public comments. The “preventive services” regulation appears to go back to a 2010 announcement that led to the promulgation of an interim final rule in August 2011. Here is HHS’s description of the background to the promulgation of the interim final rule:

The Affordable Care Act – the health insurance reform legislation passed by Congress and signed into law by President Obama on March 23, 2010 – helps make prevention affordable and accessible for all Americans by requiring health plans to cover recommended preventive services without cost sharing.

Under the Affordable Care Act, women’s preventive health care services – such as mammograms, screenings for cervical cancer, and other services – are already covered with no cost sharing for new health plans. The Affordable Care Act also made recommended preventive services free for people on Medicare. However, the law recognizes and HHS understands the need to take into account the unique health needs of women throughout their lifespan.

On August 1, 2011, the Department of Health and Human Services (HHS) adopted additional Guidelines for Women’s Preventive Services – including well-woman visits, support for breastfeeding equipment, contraception, and domestic violence screening – that will be covered without cost sharing in new health plans starting in August 2012. The guidelines were recommended by the independent Institute of Medicine (IOM) and based on scientific evidence.

It’s a little bloodless, a little propagandistic, a little deceptive, a little chilling. Having taken public comments into account following the announcement of its interim final rule, HHS returned in the same spirit on January 20, 2012, with the announcement of its final rule, like Moses coming down from the mountain with the tablets in hand:

Today the department is announcing that the final rule on preventive health services will ensure that women with health insurance coverage will have access to the full range of the Institute of Medicine’s recommended preventive services, including all FDA -approved forms of contraception. Women will not have to forego these services because of expensive co-pays or deductibles, or because an insurance plan doesn’t include contraceptive services. This rule is consistent with the laws in a majority of states which already require contraception coverage in health plans, and includes the exemption in the interim final rule allowing certain religious organizations not to provide contraception coverage. Beginning August 1, 2012, most new and renewed health plans will be required to cover these services without cost sharing for women across the country.

After evaluating comments, we have decided to add an additional element [sic] to the final rule. Nonprofit employers who, based on religious beliefs, do not currently provide contraceptive coverage in their insurance plan, will be provided an additional year, until August 1, 2013, to comply with the new law. Employers wishing to take advantage of the additional year must certify that they qualify for the delayed implementation. This additional year will allow these organizations more time and flexibility to adapt to this new rule. We intend to require employers that do not offer coverage of contraceptive services to provide notice to employees, which will also state that contraceptive services are available at sites such as community health centers, public clinics, and hospitals with income-based support. We will continue to work closely with religious groups during this transitional period to discuss their concerns.

Scientists have abundant evidence that birth control has significant health benefits for women and their families, is documented to significantly reduce health costs, and is the most commonly taken drug in America by young and middle-aged women. This rule will provide women with greater access to contraception by requiring coverage and by prohibiting cost sharing.

This decision was made after very careful consideration, including the important concerns some have raised about religious liberty. I believe this proposal strikes the appropriate balance between respecting religious freedom and increasing access to important preventive services. The administration remains fully committed to its partnerships with faith-based organizations, which promote healthy communities and serve the common good. And this final rule will have no impact on the protections that existing conscience laws and regulations give to health care providers.

Which brings us to the controversy of the past few months, with the uprising of the Catholic bishops and the related protests to HHS regulation. With his “accommodation,” President Obama announced that he had come to bring peace:

The President…announce[d] that his Administration will propose and finalize a new regulation during this transition year to address the religious objections of the non-exempted non-profit religious organizations. The new regulation will require insurance companies to cover contraception if the religious organization chooses not to. Under the policy:

o Religious organizations will not have to provide contraceptive coverage or refer their employees to organizations that provide contraception.

o Religious organizations will not be required to subsidize the cost of contraception.

o Contraception coverage will be offered to women by their employers’ insurance companies directly, with no role for religious employers who oppose contraception.

o Insurance companies will be required to provide contraception coverage to these women free of charge.

o The new policy does not affect existing state requirements concerning contraception coverage.

I love this deep cost-benefit analysis that is tacked on to the announcement of the new dispensation:

Covering contraception is cost neutral since it saves money by keeping women healthy and preventing spending on other health services. For example, there was no increase in premiums when contraception was added to the Federal Employees Health Benefit System and required of non-religious employers in Hawaii. One study found that covering contraception saved employees $97 per year, per employee.

Where does this fit in under the Administrative Procedure Act and its supposedly deliberative process? it sounds like one-man rule to me. I’ve been waiting for our friends at The Volokh Conspiracy to explain. Now comes Jonathan Adler to review the action so far:

The Obama Administration’s January announcement it would not exempt most religious employers from the so-called “contraception mandate” sparked substantial controversy. The policy infuriated many religious groups, including some that have been otherwise supportive of the Administration’s health care reform efforts. In response to public pressure, [on February 10] the Administration announced a compromise designed to assuage the concerns of some religious groups. Yet this has not yet put the matter to rest. Some groups find the compromise inadequate, characterizing it as a fig-leaf or subterfuge. They might be right, but the truth is we don’t yet know, because the details of the compromise have yet to be drafted, let alone finalized. In fact, on the same day the President announced the compromise, the Department of Health and Human Services (HHS) went ahead and finalized the rule as originally proposed. So for now, the compromise is nothing more than a vague assurance of changes to come.

Here’s some background. Under the Patient Protection and Affordable Care Act, employers are required to provide baseline coverage for preventative care as part of the health insurance plans they provide, and the federal government gets to decide what must be covered. Pursuant to this authority, and based on the recommendation of the Institute of Medicine, HHS concluded that this baseline coverage should include all forms of FDA-approved contraception, including some that are capable of acting as abortifacents. Such coverage is important for women, HHS concluded, and can actually help reduce overall health costs.

Recognizing that some religious groups are staunchly opposed to contraception – and that the First Amendment’s free exercise clause provides some protection for religious institutions against government mandates – HHS proposed a narrow exemption. As explained by HHS Secretary Kathleen Sebelius in January, this exemption would be limited to those religious employers that are primarily focused on the inculcation of religious values and primarily serve and employ those of the same religious faith. In other words, houses of worship are exempt, as are those religious institutions that exclude non-believers. All other religious employers, including schools, hospitals, universities, charities, and welfare organizations that serve the general public, would have to comply or pay fines of approximately $2,000 per employee. The only way to avoid the mandate would be for these institutions to segregate themselves from society at large, confining their services and employment to members of their own faith, or shutting down altogether.

The policy announced by HHS was not only controversial, but potentially illegal as well. Whether or not the contraception mandate violates the First Amendment’s “free exercise” clause (and I doubt it did, at least under current doctrine), it is almost certainly violates the Religious Freedom Restoration Act (RFRA), a law enacted in 1993 to provide additional protection for religious institutions under federal law (for reasons explained by Ed Whelan in these posts). Under RFRA, the federal government is barred from imposing a substantial burden on the free exercise of religion, even if the burden is the result of an otherwise-valid government policy that does not target religious practice, unless the policy satisfies strict scrutiny (i.e. it is the least restrictive means of advancing a compelling governmental interest). This is a substantially more demanding test than is currently imposed under the First Amendment and it is a test the Administration’s policy would have had a hard time satisfying. (Indeed, it’s a test it’s unclear the Administration even considered.)

Such legal concerns may have contributed to the Administration’s decision to offer the compromise announced [on February 10]. Under the new policy, religious institutions would no longer have to pay for health insurance plans that cover contraception. Their insurance companies, however, would have to provide such coverage to covered employees free of charge. This shift satisfied some groups, but others see it as an accounting gimmick. After all, when a religious institution contracts with an insurance company to cover its employees, the insurer knows contraception must be provided, even if it is not formally part of the plan. On the other hand, contraception – like some forms of preventative care – can actually lower health care costs in the long run, so it’s not clear the new policy will really cost insurers. But this will not help those religious institutions that self-insure. In such cases, the employer and insurer are effectively one and the same.

The real difficulty in assessing the Administration’s compromise, however, comes from the fact that it has yet to be formally proposed, let alone adopted by HHS, as noted by Cary Coglianese on RegBlog. (See also here.) To the contrary, on the same day the compromise was announced, HHS finalized the rule as it had been originally proposed “without change.” HHS had previously announced that religious employers would be given an extra year before they have to comply with the rule, and this “safe harbor” remains (with some conditions detailed in an accompanying guidance). But the new compromise is nothing more than a promise of a new rule at some point in the future. According to HHS, it will “work with stakeholders” to develop and finalize a new compromise policy before the year is up. This pledge may be comforting to those religious institutions that opposed the mandate, but it has no legal force. Promulgating a new regulation on a controversial subject can be quite time-consuming, and agencies miss regulatory deadlines with some regularity, even when operating under court orders or statutorily required schedules. So there’s no guarantee this compromise will ever be put in place, or that it will achieve the stated goal of preventing religious institutions from having to pay for forms of medical treatment they consider sinful.

Adler’s post is full of links that should be read along with the post; I’ve only included the links that the text requires.

If the mainstream media were not in the bag for Obama and Obamacare, this story would be on the front pages of the newspapers and leading off the network news broadcasts every day. It is a sign and symbol of the lawlessness and tyranny of Obamacare. As it is, however, the Democrat Media Complex is busy providing nothing but misdirection. The misdirection provides the cover under which the un-American contraption of Obamacare is flying.

Recommend this Power Line article to your Facebook friends.

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