Obamacare: Full Steam Ahead for Implementation of Act

July 6, 2012Articles
As seen in Business First of Louisville.

By a 5-4 vote and on the strength of an opinion by Chief Justice John Roberts, the United States Supreme Court upheld the individual mandate in President Obama’s signature Patient Protection and Affordable Care Act. Strictly speaking, Roberts’ opinion may have shown Congress excessive deference. But by upholding the individual mandate, Roberts has empowered the voters to finally decide the fate of Obamacare.

The Court’s opinion is complex. The Justices agreed the individual mandate was not a “tax” under the Anti-Injunction Act, which prohibits legal challenges to taxes before they take effect, because Congress termed it a “shared responsibility payment.” Seven of the nine Justices also agreed that Congress lacked the constitutional Spending Clause authority to punish states that refused to expand Medicaid as provided by the ACA and violated basic federalism principles by doing so. But on the mandate, the Court fractured.

Four “liberal” justices (Ginsberg, Sotomayor, Kagin and Breyer) argued that the Commerce Clause authorized the mandate. Four “conservative” justices (Alito, Kennedy, Scalia and Thomas) argued that the Act was unconstitutional in its entirety. The Chief Justice took a different tack. He rejected the liberals’ argument that Congress had the authority under the Commerce Clause to require individuals to purchase health insurance. However, he rejected the conservatives’ call to strike down the law, instead finding that the individual mandate was a “tax” (notwithstanding Congress’s refusal to do so) and that Congress could constitutionally tax people for not buying insurance. Concluding his opinion, Roberts wrote “the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.”

On its face, the Chief Justice’s opinion seems internally contradictory. However, the larger political context explains the interpretive gymnastics. In 2008, candidate Obama promised transparency, free health care to those who could not afford or obtain private insurance and economy-wide cost reductions. President Obama ultimately delivered a 2000-page legislative monstrosity that was negotiated behind closed doors and proved so convoluted that then-House Speaker Nancy Pelosi said enactment was required “so we can find out what’s in it.”

Obamacare has proven to be one of the most socially disruptive measures ever enacted by Congress. The circus of its passage included massive demonstrations by angry citizens opposed to individual mandate and vitriolic accusations by prominent supporters that the opponents were racist and “un-American.” It also included unprecedented procedural gamesmanship by Congressional leaders, without which the Act would not have become law. Then, the President publicly warned the Court, in the midst of deliberations, that it “would be an unprecedented, extraordinary step” to find the law unconstitutional. Influential political voices were heard urging the President to run a tough political campaign against the Court if the ACA was overturned.

By characterizing the mandate as a tax and setting limits on federal Commerce Clause and Spending Clause powers, Roberts defused these attacks and took the Court out of the Administration’s political gun-sights. At the same time, he cemented a foundation for future cases limiting federal power, energized the same political forces that shifted Congress’s political balance in 2010 and forced President Obama to take ownership of a massive federal tax increase and all of the associated baggage.

Nevertheless, the Court’s decision translates into “full steam ahead” for Act implementation without effective checks, balances or limits. Employers and health care providers face a monumentally heavy regulatory and tax burden. Although most patients with existing insurance plans won’t see major changes or deterioration in the availability or quality of health care overnight, their world will soon be very different. The Act front-loaded benefits (e.g. removal of pre-existing condition limits) but back-loaded burdens (e.g. limits on care, taxes, insurance pools). These burdens soon will be felt in full force.

Absent Obamacare repeal or modification, it seems the rich will keep the healthcare they have, the uninsured and a class of government bureaucrats will benefit from a new entitlement, and middle-class Americans will pay more in taxes for less care. As Chief Justice Roberts made clear, it is now up to the people, acting through their elected representatives in Congress, to fix the problem.