The Czar, as you know, is not the kind of guy who relies on hysteria for very long. This evening, he read the Supreme Court’s decision, written by Justice Roberts. What we find there is not a total capitulation, but rather a serious smackdown of Obamacare.
Much ado is being made that the law was upheld. Yes, clearly it was—but only on a technicality of taxation. What you folks are not hearing—because it would be embarrassing to the Democrats—is that the individual mandate is out. Your participation in Obamacare is now purely a tax procedure.
Roberts explains that the law carefully explains that the method of penalizing people who do not participate in Obamacare (as explained in the law itself) follows IRS procedures, rules, and tests. As a result, Roberts writes that this reveals that Obamacare was indeed a tax from the beginning, regardless of what the government argued.
And as a tax, he reminds readers that it can be subjected to legal challenge once the tax is enacted in 2014. More on that later.
Roberts also acknlowedges that the very structure of the law, as written, ensures healthcare costs will climb due to cost shifting, simply because not enough healthy people will be available to cover the costs of those needing care but presently unable to obtain insurance. Indeed, he details what a mess the legislation is. Indeed, the only way to counter this problem is for the government to enforce an individual mandate: every individual must, by law, purchase insurance in order to generate a big enough risk pool. Curiously, it is now a matter of legal record that Obamacare will not lower healthcare costs.
Roberts adds that the government claims it has the authority to do this under the Commerce clause of the Constitution: Congress has the ability to regulate commerce. However, Roberts states that the law fails to explain how not purchasing insurance constitutes commerce that can be regulated. You cannot regulate the absence of pre-established commerce. Not buying something is not tangible commercial activity. The individual mandate was rejected. III.A.1.
Another argument for the individual mandate came out of the Necessary and Proper Clause: that Congress can extend its authority to create laws necessary to the proper execution of another law. In other words, if the law says Obamacare is legal, then the individual mandate is necessary to make it work; therefore, the individual mandate is legal. The Supreme Court says that this necessity was not proven, and that use of the Necessary and Proper Clause to legalize the individual mandate is usurpation. Again, the individual mandate is illegal. III.A.2.
The counterpart to this is whether the individual mandate is legal as a tax; specifically, a tax on those who refuse to purchase insurance. Roberts notes in the introduction to III.B that the government really was hoping to avoid this specific angle, but it must be addressed.
Unfortunately, there is too much precedent for the ability of Congress to tax an activity. Not buying insurance is of course an inactivity, but one that could be easily rephrased as opting out. Opting out of purchasing insurance is an activity because a choice was made—and that this is indeed a valid argument. In other words, yes: Congress can tax you for choosing not to buy insurance. The Constitution does not prohibit it.
Roberts, however, adds that there are legitimate legal process challenges to this—but that power rests with the voters, not with the Supreme Court.
In Part IV, Justice Roberts looks at the Spending Clause, which allows the Federal government to penalize State governments by withholding federal dollars if they do not comply with Federal law. In other words, some of the states argued that Obamacare requires them to cough up serious cash to meet some of the Medicaid financial shortfalls Roberts acknowledged earlier.
However, the Supreme Court found that Obamacare’s requirements for the states to participate is illegal, because it will require the states to pass legislation on behalf of the Federal government where none might exist. It basically is like the individual mandate argument: the Feds can’t force any state to participate in commerce if it elects not to. The Feds can encourage participation in a Federal law by controlling spending, but not coerce.
In short, the law cannot mess around with the states’ Medicaid dollars. However, any Obamacare money collected by the tax outside of Medicaid can be subject to Federal requirements. That said, this decouples Medicaid from Obamacare enforcement, which is a serious blow to Obamacare’s supporters because that was one of the weasely ways they were going to hide the losses.
More to the point, Justice Roberts upheld the law only on a taxation technicality. He effectively clarifies that the individual mandate as we understood it is null and void; you can opt out, but you will be taxed on it. And if you are taxed on it, you now have legal remedies to get that refunded.
This is a big boon to Republican plans, because it provides a legal roadmap to the GOP.
Likewise, he clarifies that all 57 states will not have their existing state Medicaid programs destroyed, which paves a path for state-by-state waivers.
So reading the 59-page majority opinion, a good 95% of it is slamming Obamacare, with 1% explaining why precedent allows it to be treated as a tax and 4% grumpy commentary from Justice Ginsburg where she disagrees with his explanations.
Before conservatives get all pitchforky and torchy toward Justice Roberts, they might want to actually read what he wrote. It is clear to the Czar why many, many people initially thought he was striking down the entire bill.