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Opinion: The Supreme Court's ACA Decision


How much will the Court's decision to uphold the individual mandate really matter, in the long run? Less than you think.

Just a few thoughts on the Supreme Court decision today:

First, it turns out that the Court knows a tax when it sees one. The penalty for not purchasing health insurance is indeed a tax, according to both common sense and the Court. (A political observation: If the Court's decision generally is good news for the president, this bit about the tax is the bad news. He promised during his campaign that he wouldn’t raise taxes on the middle class. It’s now clear that he broke that promise.)

Second, the fact that the Court has declared the penalty a tax makes me feel a lot better about its Constitutionality. On some level, the difference between a penalty and a tax may seem like semantics, but it’s not. That Congress would simply require everyone to buy a product on the private market, however inadequate or overpriced, is chilling. But Congress using its taxing authority to encourage people to purchase something on the private is garden variety stuff. To say that the tax on the uninsured is unfair is to say the mortgage-interest deduction for homeowners is an unfair tax on renters. Now, that may be true. (I think it is.) But unfair does not equal “unconstitutional.”

Third, just as unfair does not equal “unconstitutional,” neither does “constitutional” equal good policy. The big question about the mandate is whether it will work as intended: Will the uninsured who don’t qualify for financial assistance choose to purchase health insurance, even though it would be cheaper to pay the tax? Whatever they decide, the healthy can get insurance at any time, under the law. I think you’ll start to see stories, about a year after the mandate takes effect, about how it wasn’t a mandate after all, but a choice, and that a lot of people are choosing to blow it off and pay the tax. Anyone who’s young, healthy, and uninsured, and who doesn’t have a significant amount of expendable income to burn, and who chooses to buy insurance because of the “mandate” is someone who doesn’t understand the law and is just making a dumb economic decision. Now, that would not be so surprising. People make dumb decisions for themselves all the time. But when American policy needs people to act against their own interests in order for the policy to work - well, that’s pretty weird, folks.

Fourth, on the subject of expanding access to insurance, the Court’s decision regarding Medicaid is very interesting. It might be the most important aspect of the decision. Here’s what the Washington Post said: “On the Medicaid question, the judges found that the law’s expansion of Medicaid can move forward, but not its provision that threatens states with the loss of their existing Medicaid funding if the states declined to comply with the expansion. The finding immediately raises questions as to how effectively the federal government will be able to implement the expansion of the joint federal-state insurance program for the poor.” In other words, the Medicaid expansion is now optional for the states, and opting out will quickly become a political requirement for Republican governors and legislatures. Many strapped blue states may opt out, too. That is a very, very, big blow to the administration’s efforts to lower the rate of uninsured. It’s a bigger defeat, I think, than the upholding of the mandate is a victory. Stay tuned.

Finally, as many others have noted, and as we have been saying in our own coverage here, the mandate is the least of your concerns, physicians. The big changes for you in a post-reform world concern how you will be paid for your services, what if any degree of autonomy you’ll be able to maintain, and what your relationship with your hospital will be.

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