Supreme Court, The Day After

Today’s Courier Herald Column:

The Supreme Court ended its session with a flourish, surprising most observers with not only the decision to uphold the Affordable Care Act, but the way it was upheld.  Chief Justice Roberts wrote the opinion, as expected.  It was not at all expected that he would side with the court’s four more liberal justices to form the majority opinion. 

I will not pretend to be a legal or constitutional scholar, nor will I pretend that I have read the decision, dissent, or a lot of legal commentary since the decision was released.  There will be plenty of time for that later.  Today’s column is merely about the immediate reaction and a few first impressions about where we go from here.

First, initial impressions and a 24 hour news cycle are not conducive to the nuance of a complex legal decision.  Most of the first reports as the decision was released were that the individual mandate had been struck down.  Atlanta based CNN and FoxNews both initially reported the wrong decision, creating much confusion for those attempting to consume instant news. 

Supreme Court decisions rely heavily on word choice, tone, and complex thoughts that do not parse well into bullet points.  Television’s “talking heads” are not the best suited individuals to relay these complicated decisions and their meaning in a real time format.  I personally intend on ignoring most of the reaction to the decision for the first 48 hours, as more people are reacting to the reaction than to the multiple implications to law regarding the use of the Commerce Clause, the federal government’s taxing authority, health care policy, and all of the above’s impact on our state and us as individuals.

Second, anyone watching too closely the run-up to the decision by partisans may be suffering whiplash this morning.  Left leaning opinion makers who were prepared to declare the Supreme Court illegitimate are now praising John Roberts as a defender and protector of the institution.  Those on the right are in the unusual position of criticizing the court for being non-activists in replacing their will over that of the legislative and executive branches.  It is important to remember that partisan talking points are not deeply rooted in anything other than potential electoral advantage, and are subject to change as quickly as the facts of the moment.

Third, for matters that we normally focus on in this space, this greatly complicates matters for those planning policy and budgets at the state level for the upcoming year.  The state will likely be receiving more than a half million additional Georgians on the Medicaid rolls, and is behind schedule in setting up health care exchanges mandated by the Affordable Care Act.  Governor Deal downplayed the idea of a special session to deal with these upcoming problems, but also indicated an extension for a deadline from the Centers for Medicare and Medicaid Services would likely be needed to avoid that.

Fourth, politics for the general election is now in full play over heath care, and not just at the Presidential level.  Because the Affordable Care Act is now the law of the land as a “tax” bill, it faces different rules for repeal than it would have before the ruling.  Specifically, tax bills often face the process of “reconciliation” in the Senate, which does not require the 60 votes for cloture that has been used to maintain the gridlock keeping both Democratic and Republican initiatives bottled up in Congress.  With reconciliation a possibility, health care is not just an issue in the Presidential race, but in every Senate race as well.  Control of the Senate is now a major benchmark for mobilizing each party’s base for November.

Finally, the sun came up today.  And it will again tomorrow.  Many on the far right are lamenting that this is the end of liberty and the Republic as we know it.  We are a resourceful people and a resilient nation.  While disappointed in the ruling, there was a clearer and much easier path to overturning the law through legislative means than had previously existed.

The will of the people in a Republic is to be expressed through elections, not through the courts.  If the Affordable Care Act is to be repealed, then let it be by the hands of the Congress and under the signature of the President. 

Both are on the table this November.  So conservatives can either wring hands and gnash teeth, or they can get to work.

41 comments

  1. saltycracker says:

    The Republicans may want to repeal the plan but at the same time we need a very clear plan “B” of a different approach or plan “C” how Obamacare will be modified. Odds of repeal are less than 50%.

    It will be a while before we figure out what is in the tax law. The hospitals, health insurance companies & big pharma will sort it out to their advantage fairly quickly.

    A Federal law impacts the compliant while the deadbeats and scam artists are usually advantaged by the lax or unwilling enforcement.

    Below are a couple AJC articles noting that the IRS can’t do much about violations and half the newly insured will be for taxpayer paid Medicaid.

    AJC:

    “Not everyone without insurance will be docked. By 2016, about 4 million people will pay the penalty to the Internal Revenue Service, the Congressional Budget Office has estimated. They would pay $695 for each uninsured adult or 2.5 percent of family income, up to $12,500 a year.”

    “The IRS can’t prosecute violators or place liens against them, however. Its only enforcement option may be withholding money from refunds.”

    http://www.ajc.com/news/nation-world/a-look-at-the-1466321.html

    “Roughly half of the patients gaining insurance will be covered by Medicaid, the federal-state program for poor and disabled people. ”

    http://www.ajc.com/health/high-court-ruling-benefits-1466297.html

  2. Calypso says:

    Serious questions below, replies appreciated:

    If one chooses not to buy the insurance and pays the $695 or 2.5% ‘tax’, is that person now somehow ‘insured’ by the government? Is the person penalized the ‘tax’ and still uninsured?Where does that ‘tax’ money go and to what use? US Treasury general fund? Some sort of federal insurance fund?

    • saltycracker says:

      Good question.
      Even if the money went back into the pot to pay for uninsured care and such, my bet is the penalty tax collection percentage will be lousy. There can be exemptions to the penalty tax for financial hardship or religious beliefs. And the IRS won’t make much effort beyond tagging the computer to get lucky on a long shot tax return to the SS#.

      At least, the numbers of the uninsured will drop, which is good for the hospitals.

      • saltycracker says:

        You can bet while the Feds say they are going to cut reimbursements to hospitals all the programs for hospitals to apply for reimbursement and their staffs will go on:

        By far the biggest uninsured group will be illegals who are not under the affordable care act and millions of them will continue as it is today. Here’s the program:

        Federal Reimbursement Of Emergency Health Services Furnished To Undocumented Aliens (93.784)

    • Baker says:

      I’ve been buying my own insurance for years. I would definitely have dropped my coverage and paid the penalty. It’s way cheaper than my insurance. I have a high-deductible plan, am under 30 (barely), and have been to a hospital once in 10 yrs for a broken finger.

      Thus the “pool” would shrink right? And I don’t think I’d be alone in doing this. Wouldn’t the amount of people leaving the “pool” more than cancel out those adding in?

      • To answer this and earlier questions, the mandate penalty/tax will essentially function as a subsidy to those who currently have insurance and a pre-payment on your ability to buy insurance when you do get sick.

        I looked at the Massachusetts Connector webpage (the only functioning exchange similar to what Georgia will eventually have). Here are the rates for a 29 year old who makes more than $33,000…

        $233/mo. $2,000 annual deductible. $5,000 out of pocket max. $25 copay for doctor visits after annual deductible reached, $15 copay for RX after annual deductible reached. $100 copay for ER after annual deductible reached, and 20% co-insurance on hospital stays after annual deductible.

        Let’s just assume you make $60,000/year. In reality I have no idea but we have to start somewhere with assumptions. You basically have a choice – pay roughly $1,500 in penalties or pay roughly $2,796 for a high deductible plan. Now of course, you do get some preventative care and it’s hard to say exactly how similar the national exchanges will be to Mass’s, but that’s where it stands.

        So in this instance you’d have to decide if the $1,296 difference is worth it.

        Now let’s say you choose to pay the penalty instead. Basically there are a lot of subsidies (ie tax outflows) in the law that go to helping people get coverage thru Medicaid or subsidized exchanges. These are (hopefully) matched by tax inflows – some from people paying penalties, some from new taxes on employers who offer (currently subsidized) Cadillac coverage, some from high earners. But essentially, if you choose to pay the penalty you’re just subsidising current people who do need insurance but would otherwise be priced out and you’ll eventually be in that group when the next generation of 29 year olds will be subsidising you.

        Now let’s assume no one pays the penalty because everyone buys insurance. In theory, they would be able to offer you a plan closer to the price of the penalty. But the bottom line is that if you pay the penalty you’re basically guaranteeing yourself the ability to buy insurance later when you do need it – obviously the government is doing tax collecting and spending as opposed to the libertarian response to the libertarian idea of the mandate which is paying a small fee now to go without insurance but have the right to buy it later – Wisconsin and other states tried this and I still think without some kind of mandate you still have the free rider problem.

        Essentially with the mandate, the government is nationalizing that potential market – the pay now for the right to do it later. Look around the world, you pretty much have to nationalize either that market or the catastrophic market. If I had my druthers I’d probably say nationalize the catastrophic market and unleash the free market on the preventaive care and non-catastrophic care market, and hey may I remind you that Obama would have let Olympia Snowe write the bill if she wasn’t so worried about a tea party primary (ironically she is now retiring).

        I always said at the time the Republican strategy of blocking at any cost instead of compromising to get what they wanted and could have gotten would bite them in the ass. Now we’re here.

    • Bill Dawers says:

      Calypso, I touched upon a couple of points in my blog yesterday (http://www.billdawers.com/2012/06/28/my-first-take-on-the-supreme-court-ruling-on-obamacare/). I’ll take a stab at your questions.

      If one chooses not to buy insurance and to pay the penalty instead, he is not insured. Of course, he would still get emergency service as needed, as the uninsured do now. A significant percentage of Americans who are now among the lower-income uninsured would qualify for coverage through Medicaid (if Georgia opts to do that).

      I don’t think the money goes into any specific account, but it might. Clearly, that money is meant to offset in part expenditures in the bill, but there are other offsetting revenues (taxes) too.

      As I understand it (someone please correct me if I’m wrong!), the enforcement mechanisms at the individual level are largely toothless — if someone refuses to pay the $695 and is not due a refund from which the tax/penalty can be deducted, the IRS cannot pursue legal remedies as it can for other unpaid taxes.

        • Bill Dawers says:

          On Washington Week earlier tonight, Pete Williams said that the IRS can contact people who haven’t paid the tax but that it cannot be collected or enforced through the usual legal mechanisms.

  3. Ed says:

    My favorite part of yesterday was Rand Paul insisting that a SCOTUS ruling doesn’t mean something is constitutional. Something that, you know, flies in the face of what the Constitution actually says.

    • Blake says:

      The Constitution does not actually say that SCOTUS gets to say what is constitutional. In fact, SCOTUS said that, in Marbury v. Madison, which is still (mostly) good law. Rand Paul can be quite the loon, but he’s on solid ground here.

  4. Bob Loblaw says:

    its a penalty that goes into the general treasury. Don’t you guys remember the “no earmarks” stuff? Arguments are surely going to take place for specific use of such funds to pay for these programs but a dollar is a dollar when you mix ’em altogether.

  5. cheapseats says:

    Charlie – Thank you most especially for this sentence:
    “The will of the people in a Republic is to be expressed through elections, not through the courts.”

    Would that people could wrap their heads around this. I’ve already heard of people calling for “recall elections” for members of the SCOTUS.

    In terms of American Exceptionalism, we seem to have an exceptional population of morons. Are we the world’s leader in uninformed citizens? *sigh*

    • Calypso says:

      “I’ve already heard of people calling for “recall elections” for members of the SCOTUS.”

      An honest and easy to make mistake on their part. They most likely got it confused with the phone in votes as to how they select the next American Idol.

    • Charlie says:

      I saw several mentions on Facebook yesterday with folks saying the way to fix the Supreme Court was to make SC Justice an elected position.

      I’m not 100% sure, but I think some of these folks are the same ones that occasionally call for the repeal of the direct election of Senators.

      Talking points and political positions often do vary based on what and who you’re pissed at that day.

  6. ZazaPachulia says:

    I took a couple Constitutional Law classes in college, which of course makes me an expert on all of this… But seriously, they were phenomenal classes with a great professor and we actually visited the Supreme Court for oral arguments and had both Kennedy and Souter as guest lecturers (proximity to D.C. helped).

    The single biggest takeaway from those two semesters was that the press gets it wrong all the time. Charlie touched on this in his thoughtful column. Supreme Court decisions are complex and rarely about what we think they are… One of the big cases that year was the challenge to the Oregon Death with Dignity Act. The decision came down and we studied it. The question the court decided actually had nothing to do with whether or not euthanasia was legal. The court was actually determining the powers of the Attorney General of the U.S. in relation to enforcing the Controlled Substances Act. You’d never understand that by reading the media reports around the case.

  7. Jimmie says:

    Hey….Can we get Affordable Auto Insurance too? How many out there don’t have auto insurance and need to buy it? It really doesn’t matter if they own a car or not. The more we can increase the pool of insured citizens the more it will drive down my own costs, no? Why stop at just Healthcare? Homeowners Insurance! At first I thought it horrible that the Fed Govt can make an indiv. purchase something from the private sector, but we can really run with this now that the Constitution is completely meaningless.

    • What an idiotic response. Affordable auto insurance exists, it’s already got a mandate. You don’t have to have a car, you will eventually need healthcare and if you’re 25 and bitching now about having to buy something you don’t need you’ll be 45 and bitching about how expensive it is one day.

      You’ve no doubt heard that there are no atheists in the trenches in World War I. Similarly there is no such thing as a Randian who is clinging to life unconscious after a serious car accident.

  8. debbie0040 says:

    We support free market exchanges not dictated by government. Government’s role in the exchange should be to create an environment conducive for exchanges to thrive..

    A good friend of mine has a sister in Canada and she said the healthcare there is terrible and so are the doctors- if you get to see one. I don’t want to see America’s healthcare destroyed to be like Canada’s. Here sister moved to Canada thinking it was a dream to have free healthcare but soon realized it was a nightmare-not a dream.

    • Lea Thrace says:

      Debbie,

      Respectfully, MY sister lives in and is a Canadian citizen. Shes says the exact opposite of what your friend of a friend says. She has dealt with minor and major health issues and has had phenomenal care with very little in cost to her. My in-laws (all Canadian citizens) all say the same. My father in-law was diagnosed with Lung Cancer a year ago. He immediately received the chemo and radiation that he needed. It was not enough so he ended up needing a transplant. That occurred quickly as well. He is now in remission and doing well, with great aftercare from his doctors.

      Are there flaws in the healthcare system up there? Of course. It’s run by humans. That is to be expected. But by no means is it this disorganized, unwieldy, heartless, money sucking monster that talking heads make it out to be. Please do not malign a system that you know nothing about.

      • Jimmie says:

        Is the problem the “for profit” Insurance Companies? How much sense does it make to guarantee them 330 Million customers then?

        • saltycracker says:

          Lots of sense providing we get the regulations right so the purchasers don’t get blindsided somewhere. Open doors of competition can provide the services of this type a lot more efficiently and managed than a bureaucratic, political, fraud infested government program swayed by every special interest going. Let them duke it out across state lines, technology, pricing and management skills and prices might drop like a stone.

          We can go the individual decision route as threejack says but that also requires the right of refusal of services, the irresponsible cannot burden the responsible. There won’t be enough charity hospitals to handle those folks. To get enough skin in the game we’ll need some kind of mandated program in a free but well regulated market.

          The current polarized bunch in congress can’t figure that out and for good or bad, Justice Roberts gave it back to the voters to do just that.

          • I don’t understand why it’s so hard for you guys to understand what is essentially a conservative idea – the mandate. Every country in the world that has a functioning healthcare system except for the US has some sort of mandate. They either mandate that you are part of a single payer system that the government runs by paying taxes, or they mandate that you purchase a regulated product from one or more eligible providers – think how the electricity of gas company works here.

            Here we have three systems. In one system we have the government running healthcare for seniors and the poor. For seniors because we decided to socialize that market, for the poor because they can’t afford it and we want to provide some minimal level of health. That’s one system. The second system is taxpayer subsidized healthcare for large private pools – typically run by companies and labor unions. If Coca-Cola has more than 1,000 employees and their families, it is safe to say that their pool will include both healthy and non-healthy people and the government says to them you have to charge everyone the same amount if we subsidize it and they are able to spread out the risk and make it affordable for their employees.

            Now we get to the third system – the small business and individual market. This is about 30% of the population. This 30% of the population has sick and healthy people in it – just like the the government pool and just like Coke’s pool. Unfortunately for the insurers who manage it, there are basically four types of consumers in this marketplace.

            1. The risktakers – mostly younger people who could afford insurance but use the implicit government backstop (free treatment at hospitals plus the bankruptcy code) to go without it.
            2. The high cost sick – the people who need insurance the most and hope that someone will offer it to them even at a high price.
            3. The responsible – they have the money and are insuring themselves and their family but are probably not getting a net benefit from having insurance, but are using it mostly to protect themselves in the event they do need a major procedure or get sick.
            4. Those who want to be responsible and buy insurance but can’t afford it due to not making enough money or being priced out due to illness or pre-existing condition.

            This pool of people doesn’t work – because #1 is never in the pool to begin with, and as people move from #3 to #2, people are priced from #3 to #4 because the pool always gets more expensive. Because insurance companies need to make a profit, their version of competition is with each other to see who can make dealing with the #2 people most unattractive so they’ll move to another insurance company (or the government) instead of competing for consumers in #2,#3,#4 unlike the rest of corporate America.

            Because the government can’t mandate that you buy an actual product from a company, they are choosing to tax group #1 (if they go without insurance) to redistribute subsidies mostly to #4 so that the pool of people is overall healthier and costs go down for #2 and #3.

            As far as the conservative options you mention such as buying across state lines, technology, pricing etc. Once #1-#4 are participating (either directly or through a tax that subsidizes some groups) THEN insurance companies should be encouraged to do just that to try to hold down costs and attract customers. But when the pool for insurance is broken, they can’t really compete on other metrics. The only thing they can focus on at that point if they want to stay in business is not ending up with too much of #2.

            This is, by the way, why I wasn’t for the public option. Even with a regulated mandate, insurance companies will still have some incentive to drop their most expensive customers, the sick. With a public option, I was worried that it would turn into the last insurance company of resort for just those people.

            I’m happy with what we’re getting – I thought it was a good idea when it was called Romney care and I think it’s a good idea now that he prefers to call it Obamacare.

            • saltycracker says:

              You must have missed that I support the mandate with conditions. The government doesn’t need to tell anyone where to buy but they can regulate the standards. Like, no exclusion for preexisting conditions.

              In my opinion the profits from private health providers is less than the waste, fraud, unwillingess to enforce, political tweaking, overpaid, over benefited layers of employees, coverage or non-coverage that defies common sense, cottage industries of getting folks qualified, a multi-billion dollar business of electric wheelchairs for the grossly obese………..that we have with government programs.

              • I think people smarter than both of us who have studied it say that Medicare pays about the same in fraud as private insurers pay for fraud prevention. Which I guess is unfortunate – pick your poison.

      • debbie0040 says:

        My friends sister is a now a Canadian citizen . We are going to be gathering stories from Canadian citizens about their health care experience and publish them on our web site. If the Canadian system is so good, then why do so many Canadians come to America and pay for medical treatment when they could get if free in Canada?

        • Um obvious question alert. If Canada is so bad why did she choose to become a citizen? Sounds to me like your friend’s sister is an idiot, no offense.

          • Three Jack says:

            Note Canada spends almost $200B annually on healthcare, approximately $5500 per person. If America just ignored that whole defense thing, we too could become a wussy country like Canada having to rely upon other countries for our defense.

            • Blake says:

              Considering the US spends about $866B annually on healthcare, approximately $2780 per person, I don’t think we’d have to ignore defense to match Canada.

              Also, massive non sequitur.

      • Bob Loblaw says:

        Its ok, Lea. Debbie is new to critiquing Canadian medical care as much as she is transportation policy, taxation, voter registration and most recently, correctly interpreting a holding of the U.S. Supreme Court. Please don’t bring facts to the table. That will only skew the conversation.

    • So you want the government to set up an exchange that can thrive. Sounds like Obamacare/Romney care to me. But let’s not quibble on that.

      Answer me this question. You’re a roughly 50 year old healthy woman. You would probably do pretty well in exchange. Now say that you had a twin sister who had breast cancer. Should the exchange charge both of you the same amount?

      If not, why not? If not, and your twin sister couldn’t afford healthcare, what should she do?

    • And a further question – the government estimates (based in part on Massachusetts experience) that only about 2% of citizens will choose to pay the tax penalty for not following the mandate. Why are you more concerned with the rights of this 2% who will pay no more than 2.5% of their income in taxes than with the very many people who can’t afford insurance right now because the small business and individual market’s pool is so broken that no insurer can offer affordable care to allcomers without going bankrupt?

        • So do you – explain to me the difference between these two scenarios…

          1. The government mandates that you own your home, and is willing to give you a subsidy to do so. If you don’t own your home, you’ll pay a penalty – higher taxes.

          2. The government mandates that you have health insurance, and is willing to give you a subsidy to do so. If you don’t have health insurance you’ll pay a penalty – higher taxes.

          Of course the primary difference between these two scenarios is that the people who really benefit from the subsidy for home ownership are high income individuals because their mortgage interest greatly exceeds the standard deduction. But for healthcare the subsidy will go to the middle class – around 300% of the poverty level.

          What’s the difference? You don’t like the government taxing for you vote for someone else. You have the right to be taxed in America, though.

    • Blake says:

      Wow, Debbie–you thought this fact-free, untruthful comment was so good you had to post it twice, once in each SCOTUS-PPACA thread?

      With a leader like you, I’m getting less and less worried about the TEA Party every day.

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