Monday, March 26, 2012

The Supreme Court and Obamacare

A prediction as the Supreme Court hears arguments on the Obamacare cases.  While each case may be decided differently, my guess is a 5-4 decision upholding Obamacare.  I base this on a small, unscientific bit of reading (the briefs for the "individual mandate") and some knowledge of what the justices might base their decision on.

In terms of the briefs, I read the briefs on the individual mandate only (the total of all of the briefs submitted, including amicus briefs, totals in the tends of thousands of pages).  From these two I noticed:

  1. The government seems to have thought out their strategy.  Much of their brief is on the social need for the individual mandate and phrasing it as the "right thing" to do, which is more likely to appeal to the "liberal" justices (Breyer, Ginsberg, Sotomayor, and Kagan).  The government also argues strongly for a very broad interpretation of the commerce clause of the Constitution.  When they quote previous Supreme Court decisions favoring broad commerce powers, they appear to have made a point of quoting Justice Scalia quoting some other case, thus pointing out past broad interpretations of the "conservative" justices.
  2. The opponents of the individual mandate focus on the broadening of Congressional power into a new realm, emphasizing Congress's own doubts about constitutionality, the lack of a precedent for the individual mandate, and pointing out how Congress would now have the power to add new mandates (such as instead of bailing out GM, require all citizens to buy a new GM car or pay a tax penalty).  However, the opponents didn't give a convincing case for an alternative to the mandate other than listing a few alternatives Congress didn't have the will to pass, including a government run single payer system. Thus, the opponents didn't really give an argument for the "liberal" justices.
  3. The swing vote in the case is likely Justice Kennedy.  From what I have seen following court decisions for many years, I don't think he will be swayed by a strict constructionist argument, more likely accepting the practical need for the mandate.
  4. Another factor may be whether the court can come up with some new constitutional interpretation to allow the mandate for health insurance without obviously opening the door to Congress adding more mandates.  This implies something like the "right to privacy" which was found in sex and contraceptive cases or some variation on equal protection (that clause of the 14th amendment applies to the states, but could as easily be expanded to the Federal Government).
So I'll predict the court upholds the new health care law, perhaps striking down pieces or giving the government some hoops to jump through to make it "proper".

If, on the other hand, the government strikes down the law, what will happen?  If a few key pieces (e.g. the individual mandate) are struck down and the rest is left intact, we're likely to see a government run single payer system much faster than we would have under the current law.  There is already a good argument that Obamacare is designed to destroy the private insurance industry.  It combines a tight limit on allowed administrative costs, explicit or implicit limits on how high premiums and co-insurance payments can be, and a general vilification of profits in medicine or health insurance.  Regulations holding health insurance premiums down while costs continue to rise will result in current insurers going bankrupt or leaving the market, leaving things open for the government to take over.  The lack of an individual mandate will allow people to move in and out of health insurance as they need it, with the ban on preexisting conditions and limits on premiums ensuring that private insurance will die out all the earlier.

Unfortunately, I don't see a long term alternative to government universal health coverage.  The debate about health care has been focused on "health insurance" as the panacea which will allow everybody to get care.  It does not look at the costs of health care or the reasons for the high costs.  These costs primarily boil down to the problem of the "third party payer", meaning that the customer (the patient) does not pay directly for the product (health care).  Instead, patients rarely know what health care will cost, and are encouraged to believe that there is no way they could afford the cost without health insurance.  This is exacerbated by a system which charges the highest price to uninsured patients, while insurance companies have negotiated discounts of anywhere from 10-20% up to 80-90% depending on the procedure (I recently saw a $93,000 hospital bill, the insurance contract paid about $15,000).  Medicare pays on average less than private insurers, with Medicaid paying on average less than that.  Thus, the more it costs a doctor to be paid (in billing, forms, regulations, etc) the less the doctor is paid.