The Healthcare Decision

The Supreme Court released its long awaited decision on the fate of the Affordable Care Act, or what has become known as Obamacare.  As many people might already know, the Court largely upheld the law against challenges to its constitutionality.  I was hoping to discuss the majority opinion written by Chief Justice Roberts and the dissenting opinions, but the length of the decisions means that I have not gotten through all of the opinions, so my commentary will be on the Roberts opinion alone. There are several important points of note in the opinions:

1) The individual mandate survives as a tax on those who refuse to purchase healthcare.  This was the backup argument advanced by the Government in favor of the law and it survives.  The tax is low, relative to the cost of insurance, and can only be enforced by the IRS if the individual does not pay. The law also does not allow tax levies or criminal penalties for failure to pay the tax.  Therefore, individuals will have a choice as to whether to purchase insurance or pay a tax. This will be a question faced by a lot of accountants over the next few years as to what is the better strategy.

2) The Roberts Opinion agrees with the dissent that the Commerce Clause of the Constitution does not permit the mandate as the individuals not buying insurance are choosing to refrain from commerce.  This argument is quite stretched and truly illogical, but the Conservative Movement requires that its adherents believe that the Commerce Clause has arbitrary limits, so a new one was created today.  In fact, it is really hard to understand how Scalia would allow for the regulation of intrastate usage of Marijuana (Raich v. United States), but think that a mandate to buy health insurance is too far removed from commerce to come under the Congress’ power to regulate.  In fact, the Roberts Opinion’s explanations for why the mandate was not affecting the usage of healthcare in interstate commerce is just plainly unconvincing.  This was a conclusion on federalism that Conservatives desire to reach so they reached it. It is simply without basis in prior cases or the Constitution.

3) The Medicaid expansion has been dealt a blow as the Court now says that Congress cannot take away all Medicaid funding for failing to accept the new provisions in the Affordable Care Act.  This decision also flies in the face of precedent, but is probably somewhat more defensible from a logic standpoint.  Congress is using its powers under the Spending provisions of the Constitution to insist that the States accept the regulations inherent in Medicaid.  The new provisions are on top of the old program that states have come to rely upon and according to Chief Justice Roberts are too coercive because of the potential loss of all of their Medicaid funding.  As of now, it is unclear what impact this will have, as the Court preserved the Medicaid expansion, but made it optional on the States.  At the beginning, the Federal Government will pay 100% of the cost of the expansion, but after 3 years that will be reduced to 90%.  Will states be scared off or too afraid not to take the money? My guess is that most states will take the money and there will be some stragglers until the law’s notoriety among Conservative Obama haters wears off. It will be a big blow to universal coverage if many states decline the expansion.

This outcome is not that surprising to me, as I thought Roberts might want to save the Supreme Court from its utter politicization at the hands of the new Four Horsemen (a term from the New Deal era court that liked to strike down all New Deal legislation).  In that sense, Roberts is very similar to Chief Justice Charles Evans Hughes, though he himself is quite a bit more conservative.

Either way, the law survives and will make quite a bit for lawyers trying to determine what exactly the law now is.  I am available at 201-289-5352 for all questions about the law and its effect on you, or any coverage disputes one might have with their insurance company.  The expansion of insurance will no doubt lead to more coverage disputes, and we have a very good record of success in getting money out of the insurance companies when they wrongly deny claims.

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