The Supreme Court’s ruling Thursday upholding President Obama’s healthcare reform law wasn’t the sort of ringing pronouncement that helps define the contours of government power and individual rights for decades to come. The justices were sharply divided, and Chief Justice John G. Roberts Jr.'s controlling opinion reads like an exercise in splitting the baby. But the end result is one that Americans in general, and Californians in particular, should celebrate.
The highly polarized debate about the constitutionality of “Obamacare” was so overwrought that it obscured what the Patient Protection and Affordable Care Act actually does. Far from being a government takeover of healthcare, as its critics claim, the measure seeks to improve the current system while leaving private insurers, doctors and hospitals largely intact. Its three main, interdependent goals are to significantly reduce the number of Americans who have no health insurance, promote higher-quality care and find ways to slow the growth of healthcare costs. Policymakers have little choice on the latter; out-of-control healthcare spending is draining the resources of governments, employers and families across the country.
Polls have consistently shown that the public supports most of the major provisions of the law. Some of those have already gone into effect, such as the one requiring insurers to provide coverage for preventive care with no out-of-pocket costs. Much of the rest, including the creation of new state insurance exchanges to help people shop for coverage and the availability of premium subsidies for lower-income Americans, will take effect in a little over 18 months.
The law as a whole, however, has drawn broad public opposition, largely because of the widespread misperception — fanned by conservative talk radio and Republican operatives — that it would put the government between doctors and patients and allow Washington to ration care. The lightning rod for opponents has been the individual mandate that begins in 2014, which requires almost all adult Americans to obtain insurance coverage that meets federal minimum standards; critics said it would force people to spend heavily for something that many — particularly the young and healthy — do not need or want. The federal government, they insisted, has never before imposed such a requirement and has no right to do so now.
In Congress’ construction of the law, however, the mandate is key to achieving the insurance reforms that the public strongly supports, most notably the ban on insurers denying coverage to people with preexisting conditions — i.e., the long-standing practice of turning away people who’ve been sick. One purpose of the mandate is to stop people from signing up for insurance only when they need treatment, then dropping it when they don’t. That sort of gamesmanship would leave insurers covering only the most expensive customers, and premiums would skyrocket as a result.
In two separate opinions, the court’s five conservatives concluded that Congress’ power to regulate interstate commerce did not give it the authority to regulate “inactivity,” such as by forcing people to buy products that they wouldn’t otherwise buy. These justices seem to believe that health insurance is a product, not unlike a car or broccoli, that people buy for its intrinsic appeal, when in fact it’s a way to pay in advance for a service — healthcare — that could be required at any moment, whose cost could be devastating and that everyone will eventually require.
As Justice Ruth Bader Ginsburg noted, no one is inactive in the healthcare market for long. More than 60% of the uninsured see a doctor or go to the emergency room every year, and close to 90% do so within five years. Requiring people to carry insurance is just a way to regulate how people pay for healthcare, which is an industry that clearly falls within the reach of Congress’ powers under the commerce clause.
Although the chief justice agreed with his fellow conservatives that the mandate fell afoul of the commerce clause, he surprisingly parted company with them in finding that the mandate was constitutional under Congress’ power to levy taxes. Under the Affordable Care Act, adults who don’t obtain coverage will have to pay an extra amount to the Internal Revenue Service on their annual tax returns, starting in 2015. That amount ranges from $695 to $2,085, depending on income.
Roberts evidently wanted to avoid extending federal power beyond the limits defined in previous cases, even if it meant shoehorning a mandate and a penalty into the definition of a “tax.” Almost as tortured was the compromise he struck on the law’s expansion of Medicaid to all Americans with incomes at or below 133% of the federal poverty line. Like the other conservatives, Roberts concluded that Congress improperly coerced states to expand their Medicaid programs by threatening to withhold all federal Medicaid subsidies if they didn’t — a sanction that could cost states billions of dollars. But he joined the court’s liberal wing in ruling that the problem could be fixed by making the expansion optional, removing the penalty for states that did not follow suit.
Regardless of the paths taken to get there, the court reached the right results. The individual mandate is a crucial part of the effort to make coverage available to more people by barring insurers from denying coverage to or gouging people with preexisting conditions. The Medicaid expansion also brings coverage to a huge number of the uninsured — 1 million in Los Angeles County alone. And reducing the number of uninsured, in turn, helps the efforts to slow the growth of healthcare costs by enabling more people to get preventive care, manage chronic ailments more efficiently and reduce the demand for high-cost emergency room services.
The Affordable Care Act provides just a framework for a better healthcare system, not a complete solution, and there’s much work to be done. That work would have been significantly harder, though, had the four conservative dissenters on the court prevailed in their call for tossing the entire act. Granted, a new president and a new Congress could still repeal the law, which will almost certainly play a more prominent role in the November election now that the Supreme Court has let it stand. But unless and until that day comes, policymakers and healthcare leaders should continue to build on the foundation the law created for a more efficient, effective and affordable healthcare system focused on keeping people healthy, not treating them when they’re sick.