View Full Version : The Reid Bill Is Blatantly Unconstitutional

12-24-2009, 04:52 AM
At PointOfLaw.com, the distinguished University of Chicago constitutional scholar Richard Epstein provides a painstaking, withering analysis of the healthcare legislation wending its way through the Senate.

He concludes that it is clearly unconstitutional.

The essay is lengthy and, in places, complex; but it is brilliantly done, accessible, and compelling.

Most of the constitutional analyses I've read, such as this superb one by David Rivkin and Lee Casey, have focused on the limitations on Congress's power to wit, that the Commerce Clause does not vest Congress with the authority to coerce Americans to purchase health insurance as a condition of living in our country.

Prof. Epstein's focus is very different, and a heartening reminder for capitalists in the age of Obama. Drawing on the Bill of Rights protections against takings without just compensation and deprivation of property without due process of law, and on the Supreme Court's rate-regulation jurisprudence, Epstein concludes that the Constitution assures that "any firm in a regulated market be allowed to recover a risk-adjusted competitive rate of return on its accumulated capital investment." (Citing the Supreme Court's decision in Duquesne Light Co. v. Barasch (1988)). Applying these principles, Epstein concludes:

The Reid Bill emphatically fails this test by imposing sharp limitations on the ability of health-insurance companies to raise fees or exclude coverage. Moreover, the Reid Bill forces on these regulated firms onerous new obligations that they will not be able to fund from their various revenue sources. The squeeze between the constricted revenue sources allowable under the Reid Bill and the extensive new legal obligations it imposes is likely to result in massive cash crunch that could drive the firms that serve the individual and small-group health-insurance markets into bankruptcy.