On Thursday, an unusual Supreme Court majority of “one” — Chief JusticeJohn G. Roberts Jr.— found that the healthcare law’s individual mandate is unconstitutional under the power of Congress to regulate interstate commerce. But, surprise, the mandate is constitutional as a tax.
This strange reasoning, not fully embraced even by the four concurring justices, handed judicial conservatives the most recent in a long parade of disappointments. No matter how controversial, contradictory and complex the ruling is, it represents a major legal victory for the Obama administration and other supporters of the Affordable Care Act.
Roberts closed the open-ended commerce clause door to sweeping federal regulatory authority over just about anything. This is something conservatives could have embraced — had he not then opened an even wider door that expanded the taxing powers of Congress.
Roberts first concluded that the individual mandate was not a tax when it came to jurisdictional issues under the Anti-Injunction Act (thereby allowing the court to decide the case). But, like the Decepticon villains in a “Transformer” movie, the mandate could convert into a tax for constitutional authority purposes. This flew in the face of the Affordable Care Act’s history and language. President Obama himself once insisted the law didn’t impose a tax.
Logical or not, the ruling underscores the dangers of relying too heavily on the Supreme Court to solve policy problems. Conservatives should have used the time that the court was deliberating to formulate attractive legislative proposals to both repeal and replace this unpopular law.
But they didn’t. So where does this leave us?
Millions of Americans may well opt out of the plan, given the sizable gap between the modest penalty amounts imposed for not purchasing insurance and the cost of doing so. Enforcement of the penalty (or the tax, under Roberts’ reasoning) is likely to be relatively weak. Uninsured or otherwise noncompliant Americans who do not file federal income taxes or do not expect to receive year-end tax refunds will remain free from the IRS penalty box.
On the other hand, the federal government may have a freer hand to regulate whatever it wants (broccoli, anyone?), as long as it just charges you a tax if you don’t comply. And the government doesn’t even have to openly call it a tax in advance.
We have already heard cries for repealing the law in Congress, but the fact is that most of the healthcare industry is resigned to shrugging its shoulders and falling back into line with the political deals it cut with the Obama administration several years ago. The political case for repeal will become much stronger among grass-roots voters — particularly independent ones — outside the Beltway this fall if it is combined with a credible, attractive alternative that offers better solutions to chronic health policy problems.
Those who think “Obamacare” doesn’t serve Americans need to come up with a more decentralized and market-based alternative that improves the lives of Americans. A better plan would include a combination of defined-contribution financing of taxpayer subsidies (for Medicare, Medicaid and private insurance, respectively), and a restructuring of the healthcare safety net to protect the most vulnerable individuals and their families (with such things as high-risk pools, protection against restrictions on coverage of pre-existing conditions for those who have maintained continuous insurance coverage).
The country needs a more competitive healthcare marketplace that encourages more entry and less command-and-control regulation. New insurance purchasing vehicles such as the exchanges called for under Obama’s law should remain optional, not exclusive, and should welcome all willing buyers and sellers. By providing better and more usable information about the “value” of healthcare options — including how different healthcare providers perform — but without dictating decisions, the federal and state government could empower consumers to make more responsible choices on their own.
It is just about certain that the courts and politicians will continue to disappoint us, but that’s all the more reason why the rest of us need to reclaim our roles and responsibilities in fixing what Washington keeps breaking.
Tom Miller heads the “Beyond Repeal and Replace” project at the American Enterprise Institute, and is the coauthor of “Why ObamaCare Is Wrong for America.”