Seeking to Preserve Obamacare, Chief Justice Roberts Eviscerated It

In his tortured effort to preserve the health overhaul statute, Supreme Court Chief Justice John Roberts has eviscerated it.

Conservative lawyers consoled themselves in defeat by focusing on the silver linings in Roberts’ legal rationale, but there is no such consolation from the conservative policy perspective.

And while liberals were initially elated that the court had left the law standing, they, too, are anguished. The central goal of the law was to increase access to health insurance toward their holy grail of universal coverage, but Roberts destroyed that by making enrollment in private health insurance and the Medicaid expansion optional.

Roberts appears to have dived so far into the legal weeds that he completely lost sight of the purpose of the law. This shows the tremendous folly of a justice who is not schooled in health policy rewriting the law to save it. Rather than putting it on these contrived new stilts, it would have been far better for him to declare the law unconstitutional, as four of his brethren insisted, so Congress could get started with the sensible reform we need.

Perhaps even worse, Roberts has created an entirely new taxing power for the federal government. “This is the first indirect tax on inactivity in American history,” said House Ways and Means Committee Chairman Dave Camp this week in opening a hearing on the court decision. An indirect tax on inactivity? Now the federal government can tax us for not doing what it demands of us!

In his decision, Justice Roberts seemed to believe he is giving the American people a simple choice, concluding that “the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.”

In his reading, there is nothing illegal about not paying the tax for not complying with the mandate. It’s simply a new choice we are given – to buy health insurance or pay a tax, with no implicit judgment or legal penalties.

It remains to be seen what new powers the Internal Revenue Service can devise to assure that we are given new “choices.”

Any reading of the law or of the extensive political and legislative debate leading to its passage make it very clear that the Congress intended for us to purchase health insurance and created a multi-layered set of financial penalties for failure to do so.

The law describes “penalties” for individuals who don’t comply with the mandate to purchase government-approved health insurance. The penalty taxes start at $95 a year, escalate to $2,000 for some families, and as much as $12,500 for higher income families. It clearly intended this to be a mandate and not an option. The government’s attorneys said dozens of times in lower-court arguments that the individual mandate was central to the workings of the overall law.

And Medicaid is such a key part of the expanded coverage that Congress didn’t even envision that expanding the program could be optional for the states. But the Supreme Court has now ordered it to be.

Other provisions in the law could mean that we wind up with more people uninsured than if the law had never passed.

Even before the Supreme Court decision, McKinsey and Co., an international consulting company, estimated that the number of people residually uninsured will be as high as 40 million in 2016, which includes people who forgo health insurance for a number of reasons. Now that it is optional, many more may opt out, especially because the law says health insurance companies are required to sell them a policy whenever they apply, even if they wait until they are sick.

The new authority to tax us into compliance with mandates means that purchasing long-term care insurance could well be next. Recall that the Obama administration was not able to figure out how to make the new long-term care insurance program – the CLASS Act – sustainable as long as purchasing this insurance was voluntary. With the program already on the books in ObamaCare, it’s a much smaller step for Congress to decide that we will pay yet another tax if we refuse to purchase it. And this is only the beginning.

The Chief Justice displays an incredible naiveté about health policy and the goals of this massive law in devising such an extraordinarily consequential opinion.

During his confirmation hearings, Roberts insisted he would see his role in the court as that of an umpire – calling balls and strikes according to the law. But it is a strange concept of an umpire to rewrite the rules of the game in the ninth inning so he can determine which team wins!

Now that the initial shock of the decision has worn off, it is clear no one is happy.

The silver lining that the lawyers see is the purported limits to the Commerce and Necessary and Proper Clauses and on Congress’ spending authority. But these are legal arguments. From a policy perspective, Chief Justice Roberts’ decision is a disaster. The law’s intent was to expand access to health insurance, not create a new tax. Congress never intended its mandates to be optional. But that is now what we have.

The court ruling makes it much more difficult to repair the damage than if he had struck the law entirely and sent Congress back to work to get it right. This case now goes to the voters for their final verdict in November.

Posted on Forbes: Health Matters, July 12, 2012.

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