The Benefits of Opt-In Federalism

The Affordable Care Act (“ACA”) is a controversial and historic statute that mandates people make insurance bargains. Unacknowledged is an innovative mechanism ACA uses to select the law that governs those bargains: opt-in federalism. Opt-in federalism—-in which individuals may in part choose between federal and state rules—-is a promising theoretical means to make and choose law. This Article explains why and concludes that the appeal of opt-in federalism is independent of the ACA. Whatever the statute’s constitutional fate, future policymakers should consider opt-in federalist approaches to answer fundamental but exceedingly difficult questions of health and retirement law

The Affordable Care Act, Remedy, and Litigation Reform

The Patient Protection and Affordable Care Act of 2010 (“ACA”) rewrote the law of private health insurance. How the ACA rewrote the law of civil remedies, however, is — to date — a question largely unexamined by scholars. Courts everywhere, including the United States Supreme Court, will soon confront this important issue. This Article offers a foundational treatment of the ACA on remedy. It predicts a series of flashpoints over which litigation reform battles will be fought. It identifies several themes that will animate those conflicts and trigger others. It explains how judicial construction of the statute’s functional predecessor, the Employee Retirement Income Security Act of 1974 (“ERISA”), converted a protective statute into a uniquely effective piece of federal litigation reform. And, ultimately, it considers whether the ACA — which incorporates, modifies, and rejects ERISA in several notable ways — will experience a similar fate

Pro-Choice Plans

After Dobbs v. Jackson Women’s Health Organization, the United States Constitution may no longer protect abortion, but a surprising federal statute does. That statute is called the Employee Retirement Income Security Act of 1974 (“ERISA”), and it has long been one of the most powerful preemptive statutes in the entire United States Code. ERISA regulates “employee benefit plans,” which are the vehicle by which approximately 155 million people receive their health insurance. Plans are thus a major private payer for health benefits—and therefore abortions. While many post-Dobbs anti-abortion laws directly bar abortion by making either the receipt or provision of abortion illegal, other anti-abortion laws target activities thought to facilitate abortion, most notably paying for abortions. Some of these laws, or proposed laws, attempt to punish paying for out-ofstate abortions, i.e., paying for abortions in a state where abortions are legal. ERISA says otherwise. If the plan covers abortion as a benefit, ERISA preempts laws purporting to bar plans in states where abortion is banned from paying for out-of-state abortions. It likewise preempts laws attempting to obligate plans to “report” on pending or completed abortions obtained by plan members. For the first time in the scholarly literature, this Article explains how and why that is the case—and thus the underappreciated importance of ERISA in the post-Dobbs world

The Private Option

Health care reform is once again in the air. Virtually all Democrats favor some meaningful expansion of public insurance, whether through single payer or the creation of a “public option” that would allow consumers dissatisfied with the private market to buy into a public program. Republicans, not surprisingly, have pushed back, not only against single payer, but also against the public option, saying it will drive private payors to extinction. All the political jousting implicates a larger and serious policy question; namely, what should be the role of private payors in the nation’s health care system?Arguments to date on that subject have largely overlooked two crucial realities. First, payors (public and private) perform multiple functions regarding health care delivery. That the government is better at one function does not mean, or even imply, that the government is better at all of them. By disaggregating the services payors render in connection with health care financing, debates about the ideal roles for public and private payors — as well as whether one of them will or should compete the other into extinction — can be had on understandable terms.Second, although frequent references to the competitive virtues of a public option have been made, insufficient thought has been given to the conceptual specifics of why and how private payors faced with a public option might evolve. In terms of improving care delivery, observers have underexamined how private payors might serve as welfare-enhancing big data digesters, care evaluators, choice intermediaries, and incentive innovators — all proficiencies that not only rate to improve the cost and quality of care, but are entirely harmonious with modern experience about where private actors often create value: by collecting, analyzing, packaging, presenting, and deploying information.Once these two significant theoretical refinements are brought to bear, a richer analysis of the public-private question emerges — and one that supplies good reason to doubt that private payors should or will (at least in the short term) be put to the sword by either Congress or public-option-armed consumers

Civil Judicial Subsidy

American society does not require civil litigants to bear the actual cost of using the court; those costs are borne almost entirely by the taxpayer (i.e., the “civil judicial subsidy”). In this Article I ask: is that right? Or is there a more desirable way to apportion court usage costs between the state and litigants? I develop an evaluative framework that facilitates analysis of the purpose, contours, and cost of the current judicial subsidy. We subsidize court use because, in theory, there are certain “social positives” associated with public adjudication. To date the unspoken assumption has been that these social positives - which I categorize and identify - apply with equal force to all court uses by all players in all cases. To the extent that assumption is mistaken, a precisely measured, differentiated subsidy - one which distinguishes between different court uses and different players - may be more attractive than the status quo. I propose considering a partial user pays system, with a generous access subsidy to ensure non-wealthy litigants have court access; a subsidy for appeals; and a retributive tax on losing litigants (who are not otherwise exempted from costs) equal to the winner’s share of court costs. Such could recapture a significant portion of the current subsidy without threatening the social positives arising from public adjudication

Thoughts on the Latest Battles over ERISA\u27s Remedies

It is extraordinarily unlikely that the drafters of ERISA foresaw the effect the statute would have on federal courts and American economic life. It was originally conceived as a pension bill of rights designed to ensure that workers received the fixed monthly pension payment (based on tenure and average salary) that they had been promised. It grew, however, into the most litigated statute in the United States Code; to govern increasingly popular individual retirement savings accounts, e.g., 401(k) accounts;4 to be the central statute regulating employment based health insurance, which covers over one hundred and sixty million people; to be one of the most anti-federalist statutes in force, depriving states of large swathes of power to regulate insurance, historically an area of state dominion; and to regulate almost entirely, the group of private arrangements that collectively allocates several trillion dollars for the elderly and the ill. The importance and reach of the statute, coupled with its expansive preemptive shadow, resulted in an intensified interest in ERISA\u27s remedies, which are often the only remedies a plaintiff may be able to pursue. The United States Supreme Court has repeatedly, if not habitually, addressed itself to the matter of ERISA\u27s remedies. Regrettably, frequent Supreme Court attention has done little to clarify many important questions regarding ERISA\u27s remedies. Below, the latest round of confusion on ERISA\u27s remedies is analyzed, and opinions on a resolution are offered. Part I offers a brief background on ERISA. Part II examines the pleading confusion that has arisen in response to the Supreme Court\u27s decision in Varity v. Howe. Part III considers the Court\u27s recent opinion in CIGNA v. Amara and the meaning of its holding with respect to the equitable relief now available under section 1132(a)(3) of the statute. Part IV remarks on an emerging battle concerning the scope of ERISA preemption of saved state insurance laws

Unlocking Exchanges

The fate of the Affordable Care Act is uncertain. Moreover, the nation is in an unusual state of political turmoil and may have no appetite for anything other than revolutionary changes to the ACA, if not its outright repeal. But press reports suggest even Republican officials formerly committed to its extirpation are now thinking instead about a measured path forward. In any event, one fact about the ACA should not escape the attention of serious reformers: the legislation has already accomplished the difficult task of laying the ground work for a move away from employment-based (EB) insurance, a move scholars have urged for years. That said, not all features of employment-based insurance are undesirable, and certain reforms to the ACA could preserve those salutary features while nonetheless guiding the nation away from a flawed system. For largely (but not entirely) political reasons, the ACA made it difficult for those receiving or providing EB insurance to migrate to the individual exchanges the Act took great pains to create. Yet if there is political will to modify the employer mandate and adjust the tax treatment of insurance purchases, access to the individual exchanges could be cautiously “unlocked,” and millions could migrate from EB insurance to individual, exchange-based insurance. With certain additional reforms, there is reason to believe that migration will lead to stronger, healthier exchanges; to a reduced regulatory burden on employers; to a clearer stakeholder understanding of the relationship between health insurance and wages; and perhaps a diminished need to rely on the controversial individual mandate, with individual states making that final assessment

Regulating Employment-Based Anything

Benefit regulation has been called “the most consequential subject to which no one pays enough attention.” It exhausts judges, intimidates legislators, and scares off theorists. That need not be so. Reality is less complicated than advertised. Governments often consider intervention if markets fail to make some socially desirable Good X — such as education, health care, home mortgages, or pensions, for example — sufficiently available. One obvious fix is for the government to provide the good itself. A less obvious intervention is for the government to regulate employment-based (EB) arrangements that provide Good X as a benefit to employees and their families. In the United States, such employment-based interventions are massive: they affect trillions of dollars, billions in tax breaks, and millions of people. They have been written into federal law for decades and generate constant litigation before the United States Supreme Court. Yet, while other regulatory interventions are well-theorized, employment-based interventions are not. There is no coherent account of employment-based interventions as a concept independent from the peculiarities of Good X or the relevant implementing statutes. This is a significant failure, and one that has obscured clear thinking — by legislators, courts, scholars, and the public — on the subject for decades. This Article offers a simple theory of employment-based interventions that (1) explains the common conceit of all such interventions and (2) provides a non-technical framework for evaluating any particular intervention, regardless of Good X. In so doing, it makes the relative appeal (or insufficiency) of employment-based interventions vastly easier to understand

A Response to Rules of Medical Necessity

Professors Monahan and Schwarcz’s recent Article in the Iowa Law Review, Rules of Medical Necessity, is a must-read for multiple audiences. In this short Response, I informally describe health insurance, and—using that perspective—describe and comment on why Rules of Medical Necessity is a piece of work that not only deserves attention from experts in the field, but is also one that casual readers should choose first when attempting to understand how health insurance works in theory and practice