Thursday, June 28, 2012

US Supremes -- courage in upholding health care

Who would have thunk it?   The Chief Justice of the United States, John G. Roberts -- and not Associate Justice Anthony Kennedy -- proved to be the swing vote in upholding most of Barack Obama's health care initiative.   (Text of decision in National Federation of Independent Business v. Sebelius, and dissents here, PDF.  -- the defendant is Kathleen Sebelius, Secretary of Health and Human Services, or  HHS.) *   This is a huge win for Barack Obama to say the least.    The law was nowhere near his election promise to expand the health insurance federal bureaucrats, civilian and military, to all people; but it does put his opponent Mitt Romney in a corner unless he can explain what he would do to make the program more universal, not less.

Remember that what got most of the GOP so up in arms over the so-called "Obamacare" program (actually, the Affordable Care Act, or ACA) was the concept of mandatory insurance -- that those over a certain income level had to get their own insurance or pay a penalty.    Obama has long insisted the rationale for this is the same for the compulsory auto insurance laws in 46 states and Washington DC:  By spreading the risk across the whole population it reduces premiums for all, including for the "uninsured motorist" provision found in nearly all auto policies in the States -- as well as (incidentally) in all 13 jurisdictions in Canada -- i.e. if a motorist causing an accident is not carrying insurance, the victim will get compensated by the insured's underwriter; and then and his or her hammock, such that it is, will then sue the at-fault motorist for recovery of the payout).

So it is with health insurance.   A universal plan is less expensive across the board than those who can afford to pay -- they end up subsidizing the bare minimum care for uninsured people at far greater cost.

Here's how Roberts' decision, as I read it, breaks down. 26 States and a major lobby group for independent business challenged the law on several grounds.
  1.  A long standing principle in the States is if you think a tax ruling is unfair, you must pay the disputed tax first as a "deposit", then sue the government for recovery.   The plaintiffs claimed this concept violated their right to sue.    The Court said that although the ACA characterizes the "pay or play" levy as a penalty and not a tax, the plaintiffs had standing to sue.
  2. The plaintiffs claimed the ACA violated the Commerce clause of the Constitution.    The Court didn't quite go as far, but it did point out the Commerce clause was only meant to regulate B2B or B2C transactions -- not to regulate the behaviour of individuals (the old "invisible hand" argument).
  3. As for the "necessary and proper" clause, the Court stated Congress couldn't pass the ACA on that ground.
  4. In regards to the so-called "penalty" the Court said they were ruling on the basis the penalty is a tax.   (Well, duh!)
  5. The penalty is not so high that it would deter people who would rather not have insurance from buying it regardless.    And in any case, Congress has taxing authority, as well as the right to charge different people different levels of tax, permitted under the Sixteenth Amendment since 1913 -- and not just a head tax; therefore, the "penalty" is entirely permissable under the Constitution.    On the principles here and above, the Court ruled 5 to 4 in favour of upholding most of the ACA.
As far as requiring States to expand the range who is eligible for Medicaid (the health insurance program for indigents) under penalty of a reduction or even total elimination of transfer payments from the federal government, the Court said that was unconstitutional.    In this case, the ACA reset the limit for eligibility for Medicaid to a third above the poverty line -- without even consulting the States, many of which are very cash strapped as it is, let alone having to find the money to pay for tens of thousands of new "clients".
(This provision was struck down, 7-2).

In a twist of logic, the Court rebuffed the plaintiff's argument that a violation of "States' Rights" (uh, yeah -- the right to impose segregation) would cause the whole law to collapse.   Instead it has suggested that Ms Sebelius try to rework the Medicaid guidelines to ensure that States don't lose their funding just because they don't want to expand their program for whatever reason -- financial or otherwise.

As for the dissenters -- Scalia, Kennedy, Thomas and Alito -- well, judge the dissents for yourself.

 My sense however is that both sides were wrong on one point -- the Commerce Clause should have been used to sustain the ACA, not the income tax clause.   The logic for that is the same as when the Supremes upheld the civil rights reforms of 1964, segregation impeded people's ability to conduct business within and outside their home states.   In the same way, ensuring people can get the best possible insurance rates, even if they want to shop outside their home states for a better premium, ensures people can get coverage period and not get ripped off simply because they live in a jurisdiction where the number of companies offering coverage in that state is less than the digits on one's hand (bizarre when the States has 1500 health insurance firms, not including the Blue Cross / Blue Shield ™ cooperative).

But at least the Court also upheld the insurance exchange, which should help drive down premiums nationwide.     Nowhere near what Canada has, but it's a start.

*  This case was combined with two other cases -- a cross appeal between Florida and HHS suing each other.

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