Obamacare Ruling Not So Supreme

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On June 28, 2012, the Supreme Court’s monumental decision upheld the Patient Protection and Affordable Care Act, also known as Obamacare, as being constitutional.  However, it was not due to obvious circumstances.  In fact, a majority of the Supreme Court justices believe that the Commerce Clause does not apply in this case.  While the government has broad powers in regulating interstate commerce, Chief Justice Roberts has established that there are limits to their power.  However, he justified this piece of legislation by applying a principle from the Anti-Injunction Act that gives Congress broad taxing powers.  Another aspect of the ruling is that the federal government cannot withhold federal funding to states that do not fund the expansion of Medicaid to their constituents, which will make it more difficult for the poor to obtain health care in non-participating states.

It is my opinion that Obamacare should have been judged constitutional based on the Commerce Clause.  As described in an earlier blog of mine, the individual mandate is not an unlimited exercise in power due to the unique nature of health care where private health care providers are required to perform emergency care services on individuals, even when they know that certain individuals have no ability or willingness to pay.  There is not another private sector market that is compelled to provide a service for no cost.  However, the government never made this argument and was unsuccessful in countering Supreme Court justices that asked whether government could force people to buy broccoli or pay for health care memberships.

Chief Justice Roberts’ main argument for asserting that the individual mandate is a tax, rather than a penalty, hinges on the fact that being uninsured is not an illegal act.  By characterizing it as a tax, political opponents to health reform now have a narrative to denigrate it to a general public that is already feeling over-taxed.  Even though proponents can point to Congressional Budget Office estimates of only 4 million households or less than 4% of all U.S. households that will actually pay the supposed “tax” in 2014, Republicans now have a compelling case to make this health care reform unpopular to many Americans.

It is vital to distinguish whether the individual mandate is a tax or penalty because there could be future challenges when individuals face paying the tax.  According to the Anti-Injunction Act, an individual cannot file suit on the imposing of a tax until they have paid it.  Therefore, there is no legal standing until that occurs in two years.  However as Gadi Dechter of Center for American Progress astutely suggests, taxes are usually involuntary and unavoidable.  If Americans responsibly obtain health coverage by 2014, they will not see any increase in taxes, thus are voluntary and avoidable.

Another essential component of the Affordable Care Act that was ruled unconstitutional was that the government cannot compel states to fund the expansion of Medicaid to its constituents.  Therefore, states can choose to not include the Medicaid expansion and this will result in less people being covered.  As reported in the Congressional Budget Office, it is estimated this could result in six million less people being covered under health care reform.  Even though this judicial ruling will impact the budget less with net savings of $84 million over a eleven-year period, the overall goal of universal coverage is lessened.

Certainly, one can rejoice to more people gaining health coverage, but I am afraid that many do not understand the negative impact this ruling will have on improving access to quality health care for all Americans.


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