Sustaining Obamacare

Except for one minor provision, the Supreme Court on June 28^th upheld President Obama’s signature Affordable Care Act (ACA), as Linda Greenhouse had predicted, with Chief Justice Roberts writing the opinion of the court and providing the swing 5-4 vote.  But Roberts’ opinion is so convoluted that both CNN and Fox initially reported that ACA had been ruled unconstitutional.

Most of the case concerned the constitutionality of the Act’s individual mandate that will require most people lacking health care insurance to pay a penalty added to their federal taxes and collected by the Internal Revenue Service.  Roberts’ opinion, part of which represents the opinion of the Court and part his own (minority) opinion, starts off by denying that the mandate is justified by the Commerce Clause of the Constitution since not buying insurance is not “commerce”—and shouldn’t be because then Congress could require everyone to buy broccoli to improve their health.  The opinion then goes on to deny that the individual mandate is justified by the Constitution’s Necessary and Proper Clause since even if it’s a “necessary” part of the ACA, it is not a “proper” one.

Finally, after 30 tedious pages during which he apparently exceeded the attention span of CNN and Fox, Roberts gets around to Congress’ power under the Constitution to “lay and collect Taxes.”  On page 44, he concludes (for the Court) that what the ACA describes as a “penalty” is really a tax and within Congress’ power to enact and is therefore constitutional.  But previously, on page 15, while again writing for the Court, Roberts dismisses the federal Anti-Injunction Act, which forbids lawsuits like this one “for the purpose of restraining the assessment or collection of any tax,” on the grounds that the penalty is really a “penalty” and not a “tax.”

Justice Ginsburg, whose opinion follows that of the Chief Justice, argues that all parts of the ACA are constitutional as written, particularly under the Commerce Clause.

The provision of health care is today a concern of national dimension, just as the provision of old-age and survivors’ benefits was in the 1930’s.  In the Social Security Act, Congress installed a federal system to provide monthly benefits to retired wage earners and, eventually, to their survivors.  Beyond question, Congress could have adopted a similar scheme for health care.  Congress chose, instead, to preserve a central role for private insurers and state governments.  According to the Chief Justice, the Commerce Clause does not permit that preservation.  This rigid reading of the Clause makes scant sense and is stunningly retrogressive.

Roberts’ “crabbed reading of the Commerce Clause,” writes Ginsburg, “should not have staying power.”  I believe there are good reasons why it won’t.  Roberts’ many pages describing what portions of the Constitution do not support the ACA’s individual mandate are actually irrelevant to the Court’s holding that the mandate is supported by the taxing power.  As such they’re considered (in legal lingo) “dicta” which, unlike the Court’s holdings, do not represent precedents for subsequent decisions.

Furthermore, the Commerce Clause is too important to the Constitution and US history to suffer a crabbed interpretation.  The federal government’s supremacy in interstate commerce was arguably the founders’ number one priority in establishing the Constitution to replace the Articles of Confederation and is arguably the number one reason why in early in the 20^th century the US became the economic powerhouse of the world.  Europeans have recently tried to create the economic equivalent of the US market with their Common Market.  The Common Market’s flaw, as we see today, is the lack of a single, strong government to regulate it.

The only other opinion in the ACA case except for a short solo dissent by Justice Thomas is a bizarre joint dissent signed by Justices Scalia, Kennedy, Thomas and Alito asserting that the ACA is entirely unconstitutional.  It’s as if the opinion of four of the Court’s five conservative choirboys was designed to be a majority per curiam opinion, an anonymously written opinion “by the court.”

While it would have been a scandalous departure from Supreme Court practice if a 5-4 opinion striking down the landmark ACA had been written per curiam, that may have been exactly what the four anticipated when their opinion was written.  In a follow-up column, Linda Greenhouse suggests that Roberts’ vote affirming ACA may have been a last-minute switch that left his four conservative colleagues in the minority.  Minority dissents are by definition not by the court, so without Roberts’ support what may have been intended as an anonymously written majority opinion became an anonymously written minority opinion.

In the end, the Supreme Court’s validation of the most significant piece of social legislation since Medicare and Medicaid ultimately depended on a halting, awkward and inconsistent opinion of the Chief Justice that eventually found its way to a place in the Constitution that sheltered the individual mandate and saved the Act.  Although the opinion did not persuade any of his fellow-conservatives, not even the supposed swing-voter Justice Kennedy, Roberts has received praise for a courageous vote.  I’m not persuaded that he deserves it.  After donning the mask of someone who respects legal precedent and tradition for his Senate confirmation hearings, he led a coalition of five of the nine justices that ravaged the judicial landscape and in its most notable case destroyed a century of campaign finance reform.  Its clownish behavior at several days of argument for and against the ACA changed public expectation that the Court would surely uphold the Act to one of expectation that it well might not.

And who knows?  Perhaps that’s where it was going, but Roberts changed his vote.  Perhaps he worried about his place in history.  Since Bush v. Gore, when the candidate with the majority of the people’s votes lost the Presidency by one vote on the Supreme Court, the public has soured on the Court that it once respected, and Roberts has done nothing to restore that respect.  Until June 28^th, maybe.  We’ll see.

Annulling Healthcare?

It seems unreal that the Supreme Court might kill the Affordable Care Act (ACA) on the grounds that requiring everyone who can afford health care insurance to have it by 2014 or pay a compensatory penalty is unconstitutional.  Although Congress can regulate health care and insurance under the Constitution’s grant of power to Congress “To regulate Commerce . . . among the several States,” a majority of five justices may decide that the individual mandate (as the requirement is called) isn’t included in that power.

ACA is complex, but its purpose is clear – and clearly tied up with the individual mandate.  In an e-book I recently published, Vote 99 Percent, which is about key issues that voters in 2012 need to understand, I undertook to explain the gist of each issue in 200-300 words.  Here’s what I wrote about ACA:

The purpose of the Affordable Care Act (ACA) of 2010, most of which doesn’t take effect until 2014, is to provide American citizens and legally resident aliens with access to affordable health care through affordable health care insurance.  People who can’t obtain affordable insurance through an employer and don’t qualify for Medicaid will be guaranteed access to insurance through new health benefit exchanges, with subsidies for those with low income.

Uninsured people who can’t afford health care when they have to have it are often treated at public cost in hospital emergency rooms.  Under ACA they will also be able to obtain insurance at normal rates since insurers will no longer be able to deny coverage or charge more because of current illness or preexisting medical conditions.  But letting people avoid buying insurance until they’re sick increases the insurance risk and its cost for everyone else.  To minimize these costs, ACA’s “individual mandate” requires almost everyone who can afford insurance to have it by 2014 or pay an annual penalty.

Since ACA defers to our current for-profit health insurance system rather than replacing it with a single government payer like Medicare, which insures seniors, ACA’s version of universal health care is less efficient and more expensive than in other industrialized countries like Canada.  But along with Medicare and safety-net programs like Medicaid, ACA will be as vital to the economic security of the 99% as Social Security.

Congress should not eliminate or privatize or cut back on any of these programs.

                                                                —

Insurance companies control their risks by excluding people with higher risks of illness either by denying them coverage in the first place or by capping the amount of their coverage or canceling their policies when they get sick.  ACA will eliminate these practices, thereby increasing the risk and consequently the cost of insurance.  But requiring healthy people to buy insurance will lower the risk and cost of insurance, offsetting in some measure the increased risk and cost of covering less healthy people.

That’s the essential scheme of ACA—finance the cost of extending health care to high-risk people who really need it but can’t get it without ACA by creating the individual mandate.  Universal health care means everyone’s in, and taxes on insurance and pharmaceutical companies and wealthier individuals will subsidize health care for poorer people who can’t afford to buy insurance.

For the Supreme Court to decide that buying health care insurance is part of interstate commerce that Congress can regulate but not buying insurance is not part of interstate commerce would be truly bizarre.  All the more so since universal health care could be achieved by expanding Medicare to cover everyone and financing the additional coverage through payroll taxes.  Doing so would rely on Congress’ Constitutional power to lay and collect taxes to provide for the general welfare, the power that Congress exercised when it created Social Security and Medicare in its present form.  Everyone is taxed, so wouldn’t need an individual mandate—or for that matter private health insurance.

During oral argument the most senior associate justice on the court suggested that if the power to regulate interstate commerce justified the individual mandate, it could justify anything, including making people buy broccoli.  “Everybody has to buy food sooner or later, so you define the market as food.  Therefore, everybody is in the market.  Therefore, you can make people buy broccoli.”

Well, maybe.  But since the price of commodities like broccoli is largely determined (in the absence of scarcity) by the costs of producing and distributing them, making everyone buy them isn’t likely to lower their price very much.  But the price of health insurance is determined by the health risks that determine when (if ever), how often and how much money the insurer will have to pay out.  Adding healthy people to the insured pool lowers its health risks and therefore its price.

Economists understand this, and indeed the leading expert on the individual mandate is MIT economist Jonathan Gruber.  He estimates that losing the individual mandate would reduce the number of currently insured people who will be covered by ACA from 32 million to 8 million and perpetuate “our unfair individual insurance markets in a world where employer-based insurance is rapidly disappearing.”

Economists understand the difference between health insurance and broccoli, but if five of the nine lawyers on the Supreme Court don’t, ACA will be gutted.  We’ll find out in June.