Obamacare's Final Chapter

Obamacare's Final Chapter
By Robert M. Goldberg on 2.1.11 @ 6:08AM

Judge Roger Vinson's summary judgment declaring the Patient Protection and Affordable Care Act unconstitutional goes beyond providing legal basis for overturning the requirement to buy healthcare. He demonstrates that the individual mandate is merely a means to solve a political problem created by the faulty drafting of Obamacare. In doing so, he forces the administration and the Supreme Court to overturn his decision by expanding the power of Congress in capricious ways neither the Founders intended or voters will be happy with.

The first part of Vinson's brief rejects the complaint made by the 26 states opposing Obamacare that the required expansion of Medicaid is coercive because it forces hard choices on states it did not agree to. Vinson (citing another court opinion) notes, "The difficulty if not the impropriety of making judicial judgments regarding a state's financial capabilities renders the coercion theory highly suspect as a method for resolving disputes between federal and state governments." Governments cannot use the Constitution to solve a problem created by bad policy.

In making this argument Vinson invokes the original Tea Party. He notes: "It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place."

This is more than a rhetorical flourish. Vinson is setting the stage for shredding the constitutionality and reasoning behind the individual mandate: The American Revolution was started in part by outrage against the tea tax. How greater would that reaction be if citizens were also forced by any government not only buy tea but also to purchase a specific kind of tea from specific companies or risk a penalty.

Under Obamacare, not only is a decision not to buy healthcare against the law, so too is the voluntary purchase of a product other than that specified under Obamacare would trigger a penalty.

Stephanie Cutter, Obama's health care advisor, blogged: "People who make an economic decision to forgo health insurance do not opt out of the healthcare market. As Congress found, every year millions of people without insurance obtain healthcare they cannot pay for, shifting tens of billions of dollars in added cost onto those who have insurance and onto taxpayers." The White House goes further and argues that because other parts of Obamacare might encourage people to postpone getting insurance until they need to, the individual mandate is "necessary and proper." Without it, the healthcare market would collapse.

Which leads Vinson to his second argument: The administration's claim that without the mandate costs and taxes would rise is no better a reason for judicial intervention than the claims of states that Obamacare is forcing them into a lousy financial position. It would be a huge overreach of judicial power to compel people to buy a specific product to rectify a situation created by previous policies. Congress enacted laws requiring hospitals that receive Medicaid dollars to treat all individuals and ask about cost later.

Congress has many options to address the "free-rider" problem just as the states have a range of choices in addressing rising Medicaid costs. (It could impose a healthcare tax on everyone to pay for insurance for the uninsured or bailout states. Or it could change laws to eliminate uncompensated care.)

Hence, Vinson notes: "it should be emphasized that while the individual mandate was clearly 'necessary and essential' to the Act as drafted, it is not 'necessary and essential' to health care reform in general." In fact, the mandate and penalties a prescribed actually reward businesses and individuals for dropping coverage and enrolling in Medicaid. That would -- in Cutter's words -- shift tens of billions of dollars in added cost onto those who have insurance and onto taxpayers.

If Congress can compel purchase of specific products from only government-approved health plans under the Commerce Clause to deal with financial challenges in the healthcare market created by previous policies or compensate with Obamacare's imperfections, nothing can stop it from dictating the terms and conditions of other economic decisions that have a fiscal consequence to a particular market.

Vinson has done more than overturn Obamacare. He's raised the political stakes for Obamacare supporters. Overturning his ruling would force the Supreme Court to "authorize Congress to reach and regulate far beyond the currently established 'outer limits' of the Commerce Clause and effectively remove all limits on federal power." The political response would lead to Obama's defeat or congressional action eliminating the individual mandate. Either way, it is increasingly unlikely Obamacare will be enacted.
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To read what Obama was saying about the Healthcare mandate back in the 2008 elections, click here.