Category Archives: debate

What is the Individual Mandate? Plus: Oral Argument Audio from 4th Circuit Court of Appeals Released

Written by Evan Farr

Today, two key cases concerning the constitutionality of the hotly debated federal health care law took place in the U.S. 4th Circuit Court of Appeals.  The two cases: Liberty University v. Geithner, No. 10-2347, and Commonwealth v. Sebelius, No. 11-1057.  The audio of the oral arguments are now available for download! Click here to listen.

The federal government brought out its big gun: Acting Solicitor General Neal K. Katyal, a “top appellate lawyer,” according to Virginia Lawyer’s Weekly.  Dean Mathew D. Stayer of Liberty University Law School and Virginia Solicitor General E. Duncan Getchell Jr. argued against Katyal. 

is the District Court Opinion from Liberty.  The court in that case granted the defendant’s (federal government) motion to dismiss the case.  In opining on possible application of The Guarantee Clause, the court said:

The Guarantee Clause provides that “[t]he United States shall guarantee to every State in this Union a Republican Form of Government . . . .” U.S. CONST. art. IV, § 4. The meaning of the Guarantee Clause has not been clearly delineated, but it is rarely a basis for finding an act of Congress unconstitutional. See Largess v. Sup. Jud. Ct. for the State of Mass., 373 F.3d 219, 226-27 (1st Cir. 2004) (“If there is any role for federal courts under the Clause, it is restricted to real threats to a republican form of government.”) (Emphasis added).

The U.S. District Court in Sebelius, however, reached a different conclusion: read the opinion here.   That opinion, representing the Republican consensus, states:

Section 1501 of the Patient Protection and Affordable Care Act – specifically the Minimum Essential Coverage Provision – exceeds the constitutional boundaries of congress.”  The court held that “Article I, Secion 8 of the Constitution confers . . . only discrete enumerated governmental powers…The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the states respectively, or to the people.

There is no skirting around the reality that this is a partisan issue.  By and large, Republicans feel the Individual Mandate is unconstitutional, whereas Democrats think just the opposite.

You may recall earlier this year, just a few months ago, when the Senate blocked an effort to repeal the reform bill.  There has even been chatter that Republicans may attempt to prevent funding of the bill, and so today’s cases are critical…but there will be many cases to follow.  After all, the provision that is at the center of this debate is not event scheduled to take effect for three years. 

What exactly is this “Individual Mandate?” From the Liberty opinion referenced above:

According to the “Requirement to Maintain Minimum Essential Coverage,” § 1501 . . .  [requires that] . . .  every “applicable individual” must obtain “minimum essential coverage” for each month or pay a penalty, which is included with the individual’s tax return. Act § 1501(a)-(b).  An “applicable individual” is any individual except one who qualifies for a religious exemption, who is not a United States citizen, national, or an alien lawfully present in the United States, or who is incarcerated. Act § 1501(d).

But note:

An “applicable individual” may still be exempted from the requirement to purchase health insurance if she cannot afford such coverage because the required contribution exceeds eight percent of her household income.  Act § 1501(e). Taxpayers with income under 100 percent of the poverty line, members of Indian tribes, and individuals determined to suffer “a hardship” with respect to the capability to obtain coverage are also exempted.

Alluding to the ongoing nature of this controversy, the opinion from the Richmond U.S. District Court, which ruled against the federal government and in favor of Virginia, states . . .

“[T]his case . . . turns on atypical and uncharted applications of constitutional law interwoven with subtle political undercurrents. The outcome of this case has significant public policy implications. And the final word will undoubtedly reside with a higher court.”

Check back with us as we continue to provide you with updates on the status of health care reform in America.  

Image: anankkml /

Image: jscreationzs /

Virginia Health Care Case Lingers On

Written by Evan Farr

Virginia, the 27th state to challenge the constitutionality of President Obama’s health care law, appears to have been unsuccessful (at least for the time being) in an effort to convince the Supreme Court to elevate the case so that it may proceed faster.

Attorney General (Virginia) Ken Cuccinelli “asked the court to resolve questions about the law quickly, without usual consideration by federal appellate judges and over objection of the Obama administration,” according to PilotOnline.

The Pilot reports that since the case was scheduled for private discussion late last week, and based on the fact that no news broke about the case today, that some debate may be going on behind closed doors.

Our National Elder Law Blog, Everything Elder Law, raised awareness of this (then impending) showdown late last year. You may review that article, entitled “Obama v. GOP: Healthcare showdown,” here.

No More Reverse Mortgages, Announces Bank of America

Written by Evan Farr

Since 2007, my opinions on reverse mortgages have been mixed.  Today, I re-examine my previous articles and prior concerns, due to Bank of America’s monumental announcement Friday that it is exiting the reverse mortgage industry.

Initially, I was strongly optimistic about the use of reverse mortgages by senior citizens.  However, over the past year I have been forced to retract much of my praise due to problems (and possibly discrimination) faced by some of my own clients.

In my first article, back in 2007, I explained why I thought (at the time) that many seniors ought to familiarize themselves with the basic advantages of a reverse mortgage.  My second article came almost three years later in early 2010, in which I took the previous article a step further.  Using a Reverse Mortgage to Pay for Home Care expounded upon the possible benefits to seniors who elect to take advantage of a reverse mortgage.  But my enthusiasm was short-lived.

My feelings towards the reverse mortgage industry turned for the worse by the time I wrote my third article, Huge Problem with Reverse Mortgage Industry, in which I stated my concerns with a seemingly industry-wide practice of second-guessing the legitimacy of crucial power of attorney (POA) documents.  I wrote about how two of my clients’ agents, both of whom used a different reverse mortgage lender, were met with a lender’s refusal to honor the POA needed to commence the application process.  They were told to go on what could be referred to as a scavenger hunt – to obtain a letter declaring the mental competency of the applicant when the POA was signed, and a second letter stating the applicant is now not mentally competent.  By the end of the article, I concluded that because of the arbitrary and capricious roadblocks imposed by the reverse mortgage lender in connection with the use of the POA, a child acting as the parent’s agent may be more likely to sell the home and place the parent in a nursing home.  This result is a far cry from the user-friendly tool I anticipated.

In my most recent article, Reverse Mortgage Rules Changing Again, I reported on more problems – this time on new laws which would increase expenses for seniors including an increase in the Mortgage Insurance Premium.  Today, besides followomg up on these concerns, I also think it necessary to offer my thoughts on a tell-tale strategic move, announced by Bank of America on Friday, that it will withdrawal from its once-thriving reverse mortgage business.

The Expense Issue

In my last article, I quoted a Reverse Mortgage Consultant with MetLife Bank, noting that “HUD’s ongoing Mortgage Insurance Premium will be increasing from 0.5% to 1.25% (a 150% increase!), and that the size of new HECM reverse mortgages will shrink anywhere from 1% to 5% depending on the applicant’s age.”

Unfortunately, this issue persists.  According to Money Watch, “[L]ast year’s annual audit . . .  revealed that the [Federal Housing Administration] had fallen below the 2 percent capital reserves required by Congress.” As a result, the FHA proposes to increase the mortgage insurance premium from 1.75% to 2.25%, and will seek approval to raise the annual mortgage insurance premium from its 55% level.  This affects millions of Americans, as the above article notes that the “FHA has become the only lender available for many Americans.  Over the past few years, FHA has gone from insuring around 3 percent of loans to more than 25 percent.”

Bank of America’s Exit from the Reverse Mortgage Industry

Doug Jones, Consumer Sales and Institutional Mortgage Services executive for Bank of America Home Loans said the Bank made a “strategic decision to exit the reverse business due to competing demand and priorities that require investments and resources [to] be focused [elsewhere].”  At least for existing Bank of America Reverse Mortgage customers, this decision will not affect their service, as Jones explained, “[Bank of America] fully understand[s] the critical sensitivity of ensuring that our senior customers are provided with the same level of excellent customer service that we have provided in the past.”

Bank of America Home Loans entered the Reverse Mortgage Business five years ago in 2006 and grew quickly after its acquisition of Countrywide Financial and Reverse Mortgage of America, but that growth has now been hampered by bigger problems within the bank.

“What’s really going on here?” The Bank of America decision comes in the wake of bad press related to its conventional mortgage business, and peaked recently when a temporary restraining order was issued January 20 of this year against ReconTrust, a subsidiary of Bank of America.  “ReconTrust is trustee on thousands of loans that are in some stage of foreclosure and approximately 8,920 of such loans have already been directly affected by this injunction,” reported the Las Vegas Sun.   The order was issued based on a woman’s suit against Bank of America for “fraudulently trying to foreclose on her home,” as reported by The Street.  According to a motion filed by the bank, “[The order] has created enormous upheaval and confusion in the foreclosure process across Nevada and immediate review is required.” The order forbids the foreclosures of thousands of Nevada properties until a hearing takes place, scheduled for February 28.  Is the Bank allocating resources away from reverse mortgage operations in order to ensure that its larger, conventional mortgage business does not falter amidst this corporate crisis?

To give credit where credit is due, this past September, Bank of America became the first loan servicer to voluntarily suspend foreclosure sales in the United States while it evaluated its procedures.  As a result, it promised to improve its “staffing, customer impact, and quality controls,” reported Mortgage Professional Magazine.

With Bank of America out of the reverse mortgage equation, only time will tell if the battered reverse mortgage industry as a whole will fully recover in the foreseeable future.  I will provide updates as they develop and can only hope reverse mortgages become the efficient, user-friendly tool they once were.

Image Credit – Photographer: Filomena Scalise

Obamacare Warfare: Why is the Public Positively Puzzled on Health Reform?

Written by Evan Farr

Struggling to make sense of the status of health care reform in America? Don’t worry; neither can Congress, the White House, nor the Courts say with certainty whether The Patient Protection and Affordable Care Act (the Act) will ultimately be considered successful legislation, whether it will be repealed, or if certain contested provisions are constitutional. The goal of this article is one of education and not political persuasion.

Last year, I discussed how the health reforms will help Medicare recipients and early retirees in my article entitled, Health Reform: Changes in Store for the Elderly.  This year, I want to briefly reiterate the most important 2011 changes.  As you may know, the sweeping health reform law passed last year is designed for long-term implementation.

Two Important 2011 Reforms for Seniors

There are two monumental changes worth mentioning briefly.  First, preventive services (including annual physicals and cancer screenings) will now be free for most beneficiaries, including people who enrolled in private plans as of last September.

Second, a 50% discount on brand-name medicines will be available for people in the Medicare Part D “donut hole.” Seniors on the Medicare Part D drug plan subject to the donut hole pay out-of-pocket when their annual drug costs are between $2,840 and $4,550.

Illustrating the likely unpopularity of health reform repeal, US News quoted Kenneth Thrope, Head of the Department of Health Policy and Management at Emory University:

“If you do repeal the law, you’ll have to start charging people for preventive benefits.  You’ll have to increase what seniors pay for prescription drugs . . . . [n]either one of those would be very popular.”

My goal is not to convince my readers to support or oppose the Act, nor is my goal to explain it: consisting of over 1,000 pages of law and policy reform, it is becoming increasingly clear that top lawmakers do not even fully understand or agree on the law.  Instead, I seek to enlighten my readers on the law’s current status.  Paradoxically, the same principle that ensures Democracy in America is the source of the maddening confusion, delay, and uncertainty: “the Separation of Powers.”

If you are interested in a summary of the Act, you can view the bill on OpenCongress here.  For information on related legislation that will modernize America’s health system, you may want to read my recent article on the HI-TECH Act, How New Health Information Technology Will Save Money and Lives.

For those who may feel lost, allow me to quickly bring you up to speed

Obama signed the Act in March of 2010

The Act was introduced September 17, 2009, passed both the House and Senate by late December, 2009, and was later signed into law by the President on March 23, 2010.  Republicans vow to repeal the law, while Democrats dismiss repeal of reform as an impossibility.  One thing is certain; this is a major piece of legislation that implicates millions of lives and billions of dollars.

Virginia Attorney General Ken Cuccinilli and 13 other states sued the federal government shortly after the law took effect. Presently, more than 20 states have filed suit against the federal government over the legislation. Virginia Governor Bob McDonnell said the new laws would have “a significant and unavoidable impact on the bottom line of [Virginia’s] state budget,” reported Richmond Times-DispatchThe Virginia Interfaith Center for Public Policy has voiced its opposition to Cuccinelli and McDonnell’s challenge, proclaiming, “[T]he political actions of Attorney General Ken Cuccinelli may simply allow health-insurance industry abuse of small business, seniors and children to continue.”

Sources of Confusion

Opposition from state Governors and their Attorney Generals is a major source of the public confusion.  The New York Times criticized such efforts and said these state suits “create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.” The media’s undivided attention to the individual mandate provision has been broad, as opposed to the seemingly jaded level of concentration allocated to the other stories related to the law.  For example, beginning September 23, 2010, a key provision took effect prohibiting insurance companies from denying coverage to children based on health status.  But America is divided, as evidenced by a recently introduced state law in California: According to, the backlash from insurance companies started in California when large insurers announced that they would no longer offer “child-only” policies.  Only after a law was introduced that would penalize these insurers for such behavior by banning them from the individual market for five years did the insurers reconsider their policy.  This is but one example of how important news stories are being overshadowed by the “individual mandate” debate.

What Role does Virginia Play in Shaping America’s Health Care Reform Debate?

Fast-forward to the present day, and Republicans in the House vow to repeal the law, while Democrats insist it isn’t possible (because they control the Senate).  On the other hand, there is speculation that it would be possible for the House to “de-fund” the legislation because they control the “purse strings.”  It is no wonder that the American public is confused.  Meanwhile, states are challenging provisions of the law in Federal Courts, and there is likely a Supreme Court case in the making, because Federal Courts can’t seem to agree on the constitutionality of a key provision – the “Individual Mandate.”

The "Individual Mandate" of the Act has been challenged in Federal District Courts

Henry Hudson, a federal judge for the United States District Court for the Eastern District of Virginia, recently found, this key provision of the Act to be unconstitutional.  Hudson did not undermine the Act and even refused to suspend its implementation pending appeal he referred to Congress’s enactment as laudable but disagreed that the Commerce Clause granted the powers contained in the Act.  The New York Times provides the full opinion here.  Judge Hudson is the third federal district court judge to decide one of these cases on the merits; more than 20 other judges have cases pending which seek to challenge the law.

Demonstrating the “tit-for-tat” nature of the debate, the Obama administration responded just one day after the Virginia decision in an op-ed piece posted on the Washington Post website.  U.S. Attorney General Eric Holder along with Health and Human Services Secretary Kathleen Sebelius are of the belief that Americans who are presently insured are paying too much for their insurance, because of an inequitable burden placed upon them by those who don’t have health insurance. “Every insured family pays an average of $1,000 more a year in premiums to cover the care of those who have no insurance,” they said, reported CNN.

Though analysts agree that there may be a Supreme Court case in the making, it will most likely take some time before winding its way up to our nation’s highest court.  Illinois State University Political Science Professor Bob Bradley commented on the aftermath of the Virginia case, stating, “The Supreme Court [is] not going to hear this for awhile…what they’re going to do is let this play through all the other federal district court challenges.” Lawyers involved say it could take two years for the Supreme Court to hear the case.

“The problem is that if [state challenges succeed], they’ll all be left high and dry with half-baked reform plans that won’t work.”  Bnet offered this interesting take on the irony of state-developed reform plans, which would provide more state-autonomy but could do so at the expense of federal grant money.

An American tragedy has delayed the Republican effort to repeal.

Because of the recent shooting of Rep. Gabrielle Giffords (D-Ariz) that left six dead, the vote to repeal the Act has been postponed.  Scheduled to take place this week, the vote was delayed by House majority Leader Eric Cantor (R-Va.), along with the rest of the legislative agenda.

Major Groups that Support and Oppose Health Reform.

Of the groups that  support the Act, OpenCongress lists health professionals, consumer groups, elder groups, the U.S. military, and various trade unions.  The opposition is composed of groups such as accident and health insurance companies, construction companies, security brokers, investment companies, and milk and dairy producers.

To conclude this article, I would like to reiterate that you should not feel bad if you are still confused about the status of the U.S. health reform law. Every day, the mainstream media plasters headlines across its networks and they can be very misleading.  Some headlines I have seen could lead a casual reader to assume the Act never became law.  Still others may perhaps lead one to think the Act is doomed.  Whether you support health reform or not, and no matter what your political philosophy may be, something everyone can agree on is that patience is needed as Congress, the White House, and the Courts sort it out.  Here is the bottom line: the Affordable Care Act is currently law.  Any potential attempt at repeal or prospective landmark Supreme Court case is pure speculation at this point.

Image Credits:

Image: renjith krishnan /

Image: renjith krishnan /