Are Health Care Waivers Unconstitutional?

Columbia Law School’s Philip Hamburger had an interesting essay on NRO this week questioning the constitutionality of federal authority to grant waivers under the federal health care law.  A taste:

The Department of Health and Human Services has granted 733 waivers from one of the statute’s key requirements. The recipients of the waivers include insurers such as Oxford Health Insurance, labor organizations such as the Service Employees International Union, and employers such as PepsiCo. This is disturbing for many reasons. At the very least, it suggests the impracticability of the health-care law; HHS gave the waivers because it fears the law will cost many Americans their jobs and insurance.

More seriously, it raises questions about whether we live under a government of laws. Congress can pass statutes that apply to some businesses and not others, but once a law has passed — and therefore is binding — how can the executive branch relieve some Americans of their obligation to obey it? . . .

Waivers can be used for good purposes. But since the time of Matthew Paris, they have been recognized as a power above the law — a power used by government to co-opt powerful constituencies by freeing them from the law. Like old English kings, the current administration is claiming such a power to decide that some people do not have to follow the law. This is dangerous, above the law, and unauthorized by the Constitution.

Professor Hamburger’s essay highlights why there is a tension between a nation of laws and the widespread use of waivers to provide selective exemptions from a complex regulatory scheme. But are such waivers unconstitutional?

I’ll defer to Professor Hamburger on how such power was viewed during the founding period, but much has happened since then. Perhaps most importantly, the broad delegation of legislative authority to executive agencies has become commonplace. Along with such power has come the authority to waive some statutory or regulatory requirements. Waiver provisions facilitated state-level welfare reforms in the 1980s and 1990s. The FCC has authority to “forebear” enforcement of provisions of federal communications law. And so on.  (I’ve also advocated more widespread use of waivers in environmental law to encourage more experimentation and policy innovation.)

An argument that any executive waiver authority is unconstitutional is a hard sell, particularly given the extent to which Congress may delegate legislative-like authority.   But the concerns that motivate such arguments, particularly that such power is prone to abuse and can undermine the rule of law, are serious.  What to do?  I think such concerns can be addressed through the creation of administrative procedures designed to ensure greater transparency, consistency, and accountability.  In the case of the FCC, for example, forbearance requests must go through a notice-and-comment rulemaking.  This slows down the approval process, to be sure, but it also facilitates judicial review and constrains the Commission’s ability to approve waivers arbitrarily or selectively.  I don’t think this is a constitutional requirement, but it would certainly reinforce the constitutional values Professor Hamburger identifies, and enable waiver authority to provide legal flexibility without undermining the rule of law.