What is the law
Herewith the principal provisions of the law from Wikipedia:
Common Sense wonders if those making the most noise about this law actually know what it provides.
- Guaranteed issue and partial community rating will require insurers to offer the same premium to all applicants of the same age and geographical location without regard to most pre-existing conditions (excluding tobacco use).[18]
- A shared responsibility requirement, commonly called an individual mandate,[19] requires that all persons not covered by anemployer sponsored health plan, Medicaid, Medicare or other public insurance programs, purchase and comply with an approved private insurance policy or pay a penalty, unless the applicable individual is a member of a recognized religious sect exempted by the Internal Revenue Service, or waived in cases of financial hardship.[20]
- Medicaid eligibility is expanded to include all individuals and families with incomes up to 133% of the poverty level along with a simplified CHIP enrollment process.[21][22]
- Health insurance exchanges will commence operation in each state, offering a marketplace where individuals and small businesses can compare policies and premiums, and buy insurance (with a government subsidy if eligible).[23]
- Low income persons and families above the Medicaid level and up to 400% of the federal poverty level will receive federal subsidies[24] on a sliding scale if they choose to purchase insurance via an exchange (persons at 150% of the poverty level would be subsidized such that their premium cost would be of 2% of income or $50 a month for a family of 4).[25]
- Minimum standards for health insurance policies are to be established and annual and lifetime coverage caps will be banned.[26]
- Firms employing 50 or more people but not offering health insurance will also pay a shared responsibility requirement if the government has had to subsidize an employee's health care.[27]
- Very small businesses will be able to get subsidies if they purchase insurance through an exchange.[28]
- Co-payments, co-insurance, and deductibles are to be eliminated for select health care insurance benefits considered to be part of an "essential benefits package"[29] for Level A or Level B preventive care.[30]
- Changes are enacted that allow a restructuring of Medicare reimbursement from "fee-for-service" to "bundled payments."[31][32]
- Additional support is provided for medical research and the National Institutes of Health.[33]
Why health care reform
Any rational consideration of health care reform needs to address the base issue of why should the government get involved in health care. There are several reasons supporting this involvement.
The first and arguably most compelling from a cost point of view is that the government is already the dominant health care payer. US health care spending in 2010 was some $2.6 trillion, 17.9% of the US GDP. In 2011 federal spending on Medicare, Medicaid, and Children's Health Insurance Program (CHIP) was 21% of federal spending, some $769 billion. Wikipedia says that 60-65% of all health care spending is government funded. Absent effective reform future government health care spending will increase and continue to be a major contributor to federal deficits.
In addition various federal and state laws require certain health care providers, notably hospitals, to provide health care services independent of the recipients ability to pay. Other government programs regulate drugs, treatment technology, and services. In addition to being the largest payer for health care, government is the principal health care regulator.
US per-capita health care spending is over twice that of other first world nations yet key measures of health in the US are lower, often far lower than other nations. The WHO ranks the US health care system as 37th in overall performance despite being highest in cost.
Clearly, the current US health care system is seriously broken. Common Sense believes that notwithstanding any arguments of private sector v. public sector efficiency, the current system's inability to deliver reasonable health care results at a reasonable cost is undeniable.
Issues before the Supreme Court
The Court has scheduled an unusual three days of hearings on the law addressing the following issues:
- Does the Tax Anti-Injunction Act apply to that portion of the law requiring all consumers to buy health insurance or pay a fine. If it's a fine then the Court can rule on the law soon. If it's a tax, then the court must wait until 2015 this portion of the law.
- Did Congress overstep its bounds by including the individual mandate itself in the law. This question hinges on the Commerce Clause of the constitution.
- Can the rest of the law stand if the individual mandate is deemed unconstitutional. Many argue that the premise of the law rest on requiring all consumers to buy health insurance to pay for the other previsions of the law.
Common Sense notes that only one provision of the law proper is before the court, the individual mandate. Other provisions of the law are only at issue as a consequence of the severability argument.
Support for the lawMuch, most of it stunningly self serving and distorted, has been said about support for the law. The facts are that general support and opposition are fairly evenly divided with significant numbers of Americans undecided.
Other polls vary.
Interestingly, support for most provisions of the law is generally high with the individual mandate/penalty the notable exception.
Clearly, the central support issue is the individual mandate/penalty. Just as clearly support is sharply divided along political parties.
Conservative principles and health care
Conservative principles would argue for a free market approach to health care. Historically, the US has had a free market health care system with a mix of profit and not-for-profit hospitals and for-profit insurers. Obamacare preserves this system. It does have provisions that regulate insurers. These provisions have broad support. To fund these provisions it establishes an individual mandate/penalty.
Common Sense notes that this is, in fact, a generally conservative approach, at least in so far as profit making hospitals and insurers remain at the heart of the system. This is in sharp contrast to single payer models common in much of the industrialized world.
Where conservatives find issue is the individual mandate/penalty. They see it as an intrusion by the federal government in individual rights and a violation of the Constitution's Commerce Clause.
Common Sense notes that an alternative would be a single payer system. Such a system would be based on existing principles that allow medicare/medicaid and the federal government's ability to tax. Of course, the history of Obamacare and other health care reforms strongly suggests that conservatives would find this equally unacceptable. The US would be forced to continue using a health care system that is both expensive and ineffective to the point of jeopardize the entire economy.
The commerce clause
At the heart of the constitutional questions before the court is the commerce clause as interpreted by the courts. The commerce clause is one of the enumerated powers in the constitution. It states simply
[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;The clause has been the subject of at least 46 historic supreme court cases and as interpreted by the courts has served as the legal basis for among other things
- federal regulation of in-state industrial production,
- federal regulation of worker hours and wages
- federal regulation of state activity when it has a "substantial economic effect" on interstate commerce or if the "cumulative effect" could have such an effect
- federal Civil Rights acts outlawing segregation and prohibited discrimination
There are some noteworthy limits on what is permissible under the Commerce Clause. In particular Lopez v. United States. 514 U.S. 549 (1995) that struck down the federal Gun Free School Zones Act of 1990 and Morrison v. United States which overturned the Violence Against Women Act. Taken together, Lopez and Morrison have made clear that while the Court is still willing to recognize a broad interpretation of the Commerce Clause, if it does not find activity substantial enough to constitute interstate commerce it will not accept Congress's stated reason for federal regulation.
The Commerce Clause and the Individual Mandate
The Individual Mandate provision is the commerce clause issue before the court. Various lower federal courts have either dodged the issue or decided differently from one another. While much has been written about the issue at root the central question is does an individual decision to NOT purchase health insurance constitute commerce. The federal government argues that it does. Opponents argue that it doesn't. Intimately connected to this issue is the question of what limits the scope of the commerce clause. Given the history of the Commerce Clause litigation it is nearly impossible to predict what the Supreme Court will decide.
Severability
Obamacare contains many provisions beyond the individual mandate. Opponents of the law argue that absent the individual mandate the other provisions must fall. Proponents argue that they should stand. Common Sense notes that where similar laws exist without an individual mandate health insurance premiums have skyrocketed largely because of preexisting condition provision.
Common Sense and Obamacare
Common Sense believes unequivocally that health care reform is necessary. Further that absent such reform health care cost are likely unsustainable. That is not to say that Obamacare is good law. Common Sense believes that it is not on the argument that it does not in fact address the issue of health care cost or does it do much to address the issue of health care results. What it does do is address the issue of mandated treatment v. cost by the individual mandate and to address some of the most egregious health insurance practices.
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