Pros of ObamaCare: It's Constitutional!
The Republicans finally had their shot. ObamaCare (or The Patient Protection and Affordability Act) would finally see its end when it is put up before the Supreme Court, in the case 'National Federation of Independent Business v. Sebelius'. Ideally, that's how they would have preferred it to go, but that was not to be. In the landmark case, the Supreme Court actually upheld ObamaCare, albeit with a few restrictions. Let's go a little more in depth, shall we?
The individual mandate
What exactly is the individual mandate? Well, it's quite simple, actually. It requires that every adult buys health insurance by 2014 and if you don't, there's a penalty. More on that later.
That seems like an overreach of power. Why can they tell me to get health insurance?
This was certainly a controversial provision. The reason for it is simple. To make the extra amount of patients that would be covered under ObamaCare feasible for the health insurance companies, there needs to be plenty of healthy people paying premiums, as well. They are a net gain for the health insurance companies because they don't need much medical care, but continue to pay premiums every month. This is why you see health insurance companies actually in support of ObamaCare, despite their original opposition. What health insurance company wouldn't want more customers? But, the part that most people felt to be unconstitutional was the penalty that customers would receive if they didn't buy insurance.
What was the reason for it being upheld?
First off, a majority of justices agreed that congress could not use the Commerce clause to enforce ObamaCare. The Commerce clause states, "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." To further break down the lawyer jargon, Commerce's definition is this: Commerce is the whole system of an economy that constitutes an environment for business. So, the logic was that healthcare is directly related to business because of rising healthcare costs and the fact that most employers offer a health insurance plan to their employees. Not to mention, a large part of our deficit problem relates to healthcare costs in America. This was not to be, however.
But, a majority of justices did agree that it fell within the congressional power to tax, which is Article 1, Section 8, Clause 1 of the U.S Constitution. So, in essence, the requirement to buy health insurance is a tax on the American public, which funds the overall healthcare system, thus benefiting everyone.
Is there any precedent for this type of taxation?
Why, yes there is. The congress has used taxation for purposes other than increased revenue before. There are a few alternative forms of taxation: regulatory taxation (taxing commerce), prohibitive taxation (to discourage or suppress; ex: taxing cigarettes), and tariffs (taxes on imported goods, which therefore reduce the quantity of goods to benefit local goods). Therefore, the ObamaCare individual mandate penalty falls within the prohibitive taxation area. It is suppressing people from not buying insurance, which allows the health insurance companies to support the 20 million or so uninsured who will join their ranks.
Side note: Isn't this the "liberal takeover of healthcare" I have heard about?
It's not actually a liberal idea, as some would have you believe. The individual mandate was also part of RomneyCare in Massachusetts, which was based on a framework by The Heritage Foundation, a conservative think-tank.
You mentioned some restrictions?
I did, indeed. The major restriction comes to the Medicaid expansion I talked about earlier. In the original bill, if a State opted out of the Medicaid expansion (as many GOP Governors have done), it would lose all of its Medicaid funding. The Supreme Court found this to be an overreach of their spending power. It amounted to coercion. So, the middle ground is this: States can opt-out of the expansion, but that will only cause them to lose the extra Medicaid funds they would have received had they approved the expansion.
Some Justices (Scalia, Kennedy, etc.) wanted to strike down the Medicaid expansion entirely and the entire bill, in fact. But, Justice Roberts did not agree with such a ruling.
Not so bad, was it?
The ObamaCare individual mandate penalty is a tax, completely constitutional, and not without precedent. It's not something to fear and it will gradually reduce our national healthcare costs, which are higher than most nations, and yet we receive worse care overall.
It's a small step in the right direction and more can certainly be done to bring us up to par with the rest of the world. But, at this moment, it seems fitting to bask in the progress we've made, as ObamaCare will start to come fully into effect in 2014.
In my next piece, I will look at the deficit implications of ObamaCare. Stay tuned!