The Roberts Decision in the Healthcare Case
The Supreme Court case on Obamacare or the Affordable Care Act (ACA) is entitled National Federation of Independent Business v. Sebelius. Chief Justice Roberts wrote the decision and the majority was comprised of Roberts, Ginsburg, Breyer, Sotomayor, and Kagan. I want to underline this because the opinion is very much a victory for the corporations and illustrates the corporatist nature of the so-called liberal wing of the Court.
With a Roberts' opinion, I expect it to be well written with solid documentation, and legal thinking that looks superficially good but on further consideration is trite and reflective of his political biases.
That said, Roberts is correct that both the government's Commerce Clause and Necessary and Proper Clause arguments fail. Obamacare sought to force a group of Americans (the uninsured) into commerce (buying insurance). Its intent was not to regulate commerce but, first to create commerce and then regulate it.
The Constitution gives Congress the power to do certain things in certain areas of the national life. The Necessary and Proper Clause is the grant of Constitutional authority to write laws in those areas. This is where things begin to go haywire in the Roberts opinion. Roberts could have just said that if the Commerce Clause is inapplicable with regard to the individual mandate, then its enabling legislation goes by the boards as well. Or put more simply if Congress doesn't have the authority to write legislation in a certain area, then it can't write legislation in that area.
But Roberts says something tellingly different. He says yes, the individual mandate is necessary to Obamacare but its mandatory nature is not proper to the enumerated power of Congress (I would assume this means the Commerce Clause) to write legislation in this area. Again this statement is superfluous because Roberts has already thrown out the Commerce Clause argument, --unless Roberts means to go somewhere else with it. And he does.
Roberts, you have to understand, is a past master of the sophistic argument. He needs a justification for the universal application of the individual mandate, and he finds one in the Taxing Clause. He does this even though he acknowledges that the Affordable Care Act law specifically calls the penalty for not buying insurance a "penalty" not a tax. Not to be hindered by anything so minor as the black letter of the law, Roberts says forget what it's called. If it acts like a tax, that is the IRS collects it, it's a tax. That the purpose is to force people to buy insurance is, for Roberts, beside the point.
Now consider this a minute and the sophistry behind it. Roberts thought that the mandate's universal application (and penalty) under both the Commerce Clause and the Necessary and Proper Clause represented a vast and inadmissible expansion of Congressional power. But call it a tax, have the IRS collect it, and he has no problem with it. Under this kind of reasoning you could penalize anyone for almost anything. You could penalize all voting age adults for not having a photo voter ID, tea drinkers for not drinking coffee, cat owners for not being dog owners. If the purpose doesn't matter, which is Roberts' position, there really is no limit to this. Any group could be penalized for not behaving like some other group.
Nor do I think subtracting out the purpose of the penalty is accidental or incidental for Roberts. The whole rationale behind the mandate and its penalties is to force people to buy a product from a private corporation. And no, this is not like car insurance. It is not saying that if you drive, you must have insurance. It is saying that even if you don't own a car, even if you don't have a license, you must still buy car insurance or face a penalty. You see the characterization of the individual mandate penalty as a tax on the public is completely at odds with its purpose. The tax is being levied against those who do not or refuse to engage in commerce with a private corporation. What kind of a tax is that?
Besides the mandate, the other issue treated in the decision regards the expansion of Medicaid. Obamacare split the uninsured into two groups. In the first were those who were deemed to be able to afford insurance. The individual mandate targeted these. The rest, those who made up to 133% of the poverty line, were to be steered into Medicaid. This represented an expansion of Medicaid, which is a federal/state program. Currently, the program covers mainly the disabled and families with children (37% of the poverty line if they are unemployed and 63% of it, if employed). Services would also be increased to levels comparable to those covered by the mandate. The Affordable Care Act sought to induce state participation in this expansion by giving states the choice between joining the expanded Medicaid program or losing all of the federal share of their existing Medicaid funding. Roberts describes this choice as coercive and a "gun to the head" of the states. However, he would find acceptable a milder inducement involving the withholding of "a relatively small percentage" of federal funds and cites the example of the federal law the Court upheld withholding 5% of highway funds from states that did not raise the legal drinking age to 21.
If you want Roberts' overarching legal theory to this case, it is here. He is affirming the government's right to use what he considers "mild" inducements (i.e. penalties) to participate in government programs. For individuals, this is the mandate. For states, it might be small cuts to the federal share of Medicaid funding. You can see in all this Roberts seeking to be the soul of reasonableness. The question is, is he? I would say, no. The mandate with its penalty has been upheld. The penalty for failure to participate in the Medicaid expansion has just been struck down. Congress revisiting this issue and acting on it is doubtful. So on the one hand we have a penalty in place and another which is for now theoretical. Moreover, what becomes of the uninsured poor in those states which opt out of the Medicaid expansion?
Nor are the two penalties symmetric. Roberts talks about the federal portion of Medicaid funding making up around 10% of a state's budget and he indicates in his decision that he would be OK with a 5% reduction in this, that is 0.5% of the state's budget. A comparable penalty for someone making $30,000 would be $150 a year, but the ACA rate in 2016 would be $60 a month or $720 a year, that is nearly 5 times higher than the state penalty.
Nor are states and individuals symmetric. Individuals need food and shelter. Those the state services would be disadvantaged by a cut, but the state itself has no nerve endings to worry about.
Nor are the purposes of the penalties the same. In the case of the Medicaid expansion, the federal government is seeking to induce another public entity, the states, to participate in a public program. In the case of the mandate, the federal government seeks to induce individuals to buy a product from a private entity, a corporation. And this product will in most cases be too expensive to use. So while the benefit to the corporation is clear, easy profit from the sale of an unusable product, and that of the government is clear, gaining revenue from the mandate penalties, what is the benefit for the individual subject to the mandate in all this? As was pointed out at the very beginning of the healthcare debate, healthcare and healthcare insurance are not the same thing.
[This started out as a comment at Naked Capitalism]