The path to ObamaCare's implosion
A willow, not an oak. So said conservatives of Chief Justice John Roberts when he rescued ObamaCare from being found unconstitutional. But the manner in which he did this might have made it unworkable, thereby putting it on a path to ultimate extinction.
This plausible judgment comes from professor Thomas A. Lambert of the University of Missouri Law School, writing in Regulation quarterly, a publication of the libertarian Cato Institute. The crucial decision, he says, was four liberal justices joining Roberts' opinion declaring that ObamaCare's penalty for not complying with the mandate to purchase health insurance is actually a tax on not purchasing it. With this reasoning, the court severely limited the ability of the new health care regime to cope with its own predictable consequences.
What was supposed to be, constitutionally, the dispositive question turned out not to be. Conservatives said the mandate — the requirement that people engage in commerce by purchasing health insurance — exceeded Congress' enumerated power to regulate interstate commerce. Liberals ridiculed this argument, noting that since the judicial revolution wrought during the New Deal, courts have given vast deference to Congress regarding that power. The ridicule stopped when five justices, including Roberts, agreed with the conservative argument.
This did not, however, doom ObamaCare because Roberts invoked what Lambert calls “a longstanding interpretive canon that calls for the court, if possible, to interpret statutes in a way that preserves their constitutionality.” Roberts did this by ruling that what Congress called a “penalty” for not obeying the mandate was really a tax on noncompliance. This must, Lambert thinks, have momentous — and deleterious — implications for the functioning of the health care act. The problems arise from the interplay of two ObamaCare provisions — “guaranteed issue” and “community rating.”
The former forbids insurance companies from denying coverage because of a person's pre-existing health condition. The latter, says Lambert, requires insurers to price premiums “solely on the basis of age, smoker status, and geographic area, without charging higher premiums to sick people or those susceptible to sickness.”
The point of the penalty to enforce the mandate was to prevent healthy people — particularly healthy young people — from declining to purchase insurance, or dropping their insurance, which would leave an insured pool of mostly old and infirm people.
This would cause the cost of insurance premiums to soar, making it more and more sensible for the healthy to pay the ObamaCare tax, which is much less than the price of insurance.
Roberts noted that a person earning $35,000 a year would pay a $60 monthly tax and someone earning $100,000 would pay $200. But the cost of a qualifying insurance policy is projected to be $400 a month. Clearly, it would be sensible to pay $60 or $200 rather than $400, because if one becomes ill, “guaranteed issue” assures coverage and “community rating” means that one's illness will not result in higher insurance rates.
So, Lambert says, ObamaCare's penalties are too low to prod the healthy to purchase insurance, even given its subsidies for purchasers. The act's authors probably understood this perverse incentive and assumed that once Congress passed the measure with penalties low enough to be politically palatable, Congress could increase them.
But Roberts' decision limits Congress' latitude by holding that the small size of the penalty is part of the reason it is, for constitutional purposes, a tax. It is not a “financial punishment” because it is not so steep that it effectively prohibits the choice of paying it.
And, Roberts noted, “by statute, it can never be more.” As Lambert says, the penalty for refusing to purchase insurance counts as a tax only if it remains so small as to be largely ineffective.
Unable to increase penalties substantially, Congress, in the context of “guaranteed issue” and “community rating,” has only one way to induce healthy people to purchase insurance. This is by the hugely expensive process of increasing premium subsidies enough to make negligible the difference between the cost of insurance to purchasers and the penalty for not purchasing. Republicans will ferociously resist exacerbating the nation's financial crisis in order to rescue ObamaCare.
Because the penalties are constitutionally limited by the reasoning whereby Roberts declared them taxes, he might have saved ObamaCare's constitutionality by sacrificing its feasibility. So as the president begins his second term, the signature achievement of his first term looks remarkably rickety.
George F. Will is a columnist for The Washington Post and Newsweek.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Ford City budget may not be final
- Babies welcomed to the world in holiday style
- Angel trees feature pets from shelter
- 2,200 union employees of ATI lose coverage
- November spared Valley effects of wintry weather
- Mentor takes young Brackenridge hunter under his wing
- Eastern Pa. man jailed in Armstrong County
- Shoppers can buy gifts for seniors through Home Instead program
- Starkey: Tomlin lived in his fears
- Penguins’ reshuffled top line of Crosby, Dupuis, Kunitz looks familiar
- Demand for surveillance systems boosts sales for Vector Security