My Supreme Court Obamacare prediction

In June, the Supreme Court will announce what it decided on Friday about Obamacare.   I’ve read through some of the oral argument transcripts and the theme is pretty clear.

First the issues:

The core concept of Obamacare is that you can’t demand that an insurance company issue a policy at a standard price to a person who walks in the door after they are already sick.   The only way insurance works is if EVERYONE is part of the insurance pool and the costs of treating everyone are born by everyone in the communisty.   That is the law that Congress passed and the President signed.   It is the law.

So the sequence of decisions are:

1)  Is the mandate to buy insurance (or pay a penalty/tax) a violation of the US Constitution?

2)  Without the mandate, does it make community rating and “must issue” health insurance that covers preexisting conditions unworkable?

3)  If you believe the “must issue” requirement is so key to the operation of the new health insurance system (with state run insurance exchanges) that you have to invalidate the entire law.

4)  If you decide that the mandate has to go, and the things tightly dependent on it have to go but the rest should stay, who decides what to chop out of the 2700 page bill?

The women of the court – Ginsburg, Sotomayor and Kagan are not discussing the Constitution.  They are liberal activists whose only frame of reference is “What do I want the outcome to be?”.     They clearly want the law to stand as written because they want the law to go into effect as written – the ends justify the means.

Clarence Thomas did not participate.   He is considered a reliable Conservative vote, but it isn’t likely his opinion will add much to the private discussion (“So why didn’t you ask that during the arguments?”)

The Conservatives who did participate are troubled by the law, but also realize it isn’t their job to make the law or take the law passed by Congress and carve it up based on the whims of who thinks what part is dependent on the mandate.

My prediction is that they will declare the mandate to be beyond the scope of what Congress is allowed to do under its Interstate Commerce powers.  They will let the rest of the act stand as written, knowing that it creates an unworkable framework for health insurance that will probably fail.  They’ll say something along the lines of “We are not experts in insurance.  We don’t know if this will work without the mandate.   Congress has the responsibility to fix or repeal the law if the lack of the mandate makes it unworkable”.

Allowing only sick people to join in state run pools and the other provisions will cause the community rated premiums to zoom upward, making it not affordable to employers to cover their employees and they will dump their employees into the state pools or they’ll go uninsured or the companies will go out of business – further turning the pools into nothing but sick people, and dumping large numbers of people onto state Medicaid (which will be forced by the law to only look at income, not assets).

The message will be to Congress  – no mandate.   We know it creates a mess.  You have a year to fix it.   Get working.

The “simple” solution is to just rewrite the mandate.   Insurance companies love to contribute to politicians.  They don’t want something that destroys their industry.    Instead of making it a “penalty”, make it a “tax”.   The only reason for the semantic games had to do with the mechanism of cramming the bill through the Senate without 60 votes by passing it as a reconciliation bill that is not allowed to change taxes.

John Boehner loves to “Fix” things.   Failing to put the mandate back in won’t stop 95% of what Obamacare does.

Another possibility – more likely if Obama is reelected and the Republicans don’t get the mandate they expect would to be just Federalize the entire health insurance system and take it out of the hands of the states.   If Medicaid was run by HHS (like Medicare) instead of 50 states, the entire situation changes.   Insurance has always been something regulated by the states, not by the Federal Government.   There are many people in many places who derive their income and power from 50 separate insurance systems.   Maybe their time is up, just as banking used to be a “State” power, but now has essentially been Federalized.

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6 Responses to My Supreme Court Obamacare prediction

  1. Art Stone says:

    Another aspect of this (pointed out by a guest on John Batchelor, I think) is the whole “Cram down” of Medicaid on the states. This directly affects me (assuming I don’t go back to a real job that pays an income).

    Today, Medicaid is a program for “poor” people. If you have more than $2000 in liquid assets, you can’t get it, although you can own a house and a car.

    The Obamacare change is that if your income is below 133% of the “poverty level” (about $14k a year for a single person) you qualify for Medicaid regardless of the amount of assets you own. Since interest rates are being held close to 0%, you would have to have a -lot- of money to earn more than $14k interest income.

    So Obamacare requires states to make that change, or they lose all federal funding for medicaid, but are still required to provide it without Federal money. If the Supreme Court ruled that you can’t use “Federal money” as a way to coerce states to do things that the Federal government has no right to regulate, that would be a huge sweeping change rolling back things like connecting Federal highway funding to states having to pass 21 year old drinking minimums, etc… Since that would be a huge change, I think it is unlikely to happen.

    • foyle says:

      Yeah, they would have to restore the 10th amendment and they wiped that one off the books back in the 1860’s. The Federal Government has ruled virtually unhindered since then (the nasty law of unintended consequences — or was that the actual intention and purpose of the civil war?)

      So, you are probably right Art, one way or another Obamacare is here to stay.

      • Art Stone says:

        Having grown up in Pennsylvania, then attending high school and college in North Carolina, there is no doubt that’s the narrative in the South. Even if there hadn’t been a slavery issue, the merchants and the bankers and the mill operators of the North had discovered they could use the Federal government to limit the South’s ability to engage in international commerce outside of their control.

        I’ve mentioned that I worked for NCNB. That was very much the narrative of Hugh McColl – that in the 1970s, the “New York Bankers” have control of all the mechanisms of global commerce, and he was out to create an alternative for Southern Businessmen. One of the larger customers of the International Banking department was a well known retailer of shoes. They had the need to arrange payments using letters of credit and bankers acceptances, usually in a foreign currency. That’s the stuff you used to only do through the big banks in New York. First Bank of Anzio in Italy has never heard of NCNB and doesn’t trust that their banker’s acceptance is reliable.

        At the tail end of Biden’s gun comments, he went in a very dangerous direction – so far, none of the pundits have picked up on it. He said something to the effect that since the Federal Government is limited in what it can do by the Second amendments, it was going to have to be up to the states to do something.

        Joe Biden believes in States’ rights? Is he suggesting that Arizona should enforce immigration laws? Do states have the right to overrule the Federal Constitution? Could Delaware say “Sorry, women can’t vote here”?

  2. foyle says:

    I can’t speak for everyone, but I certainly was NOT taught that “narrative” in the South. In my public school we were taught that Honest Abe was the greatest President that ever lived and that he saved the Union. My views on what effect the Civil War had on the 10th Amendment came from personal research in my post-college years (when I was living in Michigan no less).

    I don’t see any other event in American history except the Civil War from whence we can trace the erosion of the 10th Amendment and the growth of a strong central government. There would have been no Teddy Roosevelt progressive Republicans nor Woodrow Wilson progressive Democrats in the early 20th century without the erosion of state power that the Constitution had enshrined as essential to check federal power.

    There were certainly battles over these issues going all the way back to Hamilton and Jefferson’s feud during the nation’s founding, but it was the Civil War that decided the matter and the Federal behemoth has been expanding ever since.

    • Art Stone says:

      And I admit I go back and forth on this myself. A couple years ago, I was pushing the point that his is not the 1780s and so much has changed that the framework that made sense then may not make sense today. They wisely created the amendment process to prevent Democracy from unraveling what they did, unless there was an overwhelming consensus among all the states that it was time for change.

      A number of my early “poll” are related to the proper role of the federal government and what those boundaries are. One of the questions was “Who owns the water in a river?”. The Federal government wields enormous power by building water projects and then creating an allocation system of who gets how much of the water. Since rivers usually cross state boundaries and some with Mexico and Canada, is that something that can be left to the states?

      What Joe Biden was alluding to without saying it – is he is counting on the “Shadow Government”. The United States have uniform traffic signs and operation of traffic signals, and built the US highway system (the precursor of the Interstate Highway system) without Federal Control. All of that was done by having the 50 states form quasi-governmental agencies. Those agencies would decide things like Stop signs are red and have 8 sides and what a blinking yellow traffic light meant. Those things created that rules without Congress getting involved. The only role of the Transportation Department was to say that if you wanted government money from the highway trust fund, you had to follow the rules created by the independent agency – just as the FCC is not part of the Federal Government – it is an “independent” commission created with a very broad mandate, then their regulations have the force of law without ever being based on something approved by Congress.

      Interestingly, that’s a strategic mistake to Obamacare and could be why it gets thrown out. Pushing 2000 pages of detail into the US Code isn’t how the shadow government works. The “Bill” should only have been a few pages of enabling legislation setting out the goals in general terms. Once the “Agency” was established, that is when you spring the 2000 pages of details on the public. Having all the trivial details in the legislation means the people empowered to actually implement it will have their hands tied by all the details, and will require further Congressional action to modify.

    • Arlen says:

      About the end of States Rights, that was expressly stated by Judge Bork who said that the” Civil War ended states rights”. Like you I was taught that the war was fought over slavery ( not true) and didn’t give it any further thought.
      Just goes to show that the consequences of government action are often and usually worse than the “problem” they were trying to correct.

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