Winning Progressive

(By NCrissie B)

Yesterday we parsed the legal issues of the Supreme Court decision on the Affordable Care Act, and how each judge voted on each issue. Today we look at what the decision will likely mean, in terms of precedent, policy, and politics.

Precedent Winners and Losers

Since the Court’s decision was released, there have been both concerns and celebrations about whether Chief Justice Roberts’ opinion set “conservative traps” for future cases. We’ll discuss the political issues below, but the legal argument for a “conservative trap” presumes the ACA fell within Commerce Clause precedent, thus this decision “narrowed” Congress’ authority to regulate commerce.

I disagree. There are reasonable arguments for why health care presents a unique case for Congress to require people to buy health insurance. Yet this fact remains: there was no Supreme Court precedent reading the Commerce Clause as giving Congress authority to compel demand for a private good or service. The Court has long held that Congress can regulate the supply of goods and services, from production to distribution to marketing to whether some businesses can refuse some customers. Chief Justice Roberts’ holding did not “narrow” those precedents. He and the dissenters refused to extend that Commerce Clause regulatory power to demand, holding that Congress cannot make it illegal to not buy a private good or service. (Note: In a separate opinion, Justice Clarence Thomas would have narrowed Congress’ regulatory power under the Commerce Clause. His lone opinion is not binding.)

Instead, Chief Justice Roberts and the majority held the ACA can be read not as compelling demand, but rather as using the tax code to induce demand, an authority the Court has long recognized in the Taxing and Spending Clause. Congress could not order people to buy health insurance under penalty of criminal prosecution, but Congress could (and did) make health insurance more attractive by offering premium subsidies for median- and lower-income Americans, as well as by imposing a “shared responsibility payment” – a tax – on people who could afford insurance but refuse to buy it.

The “shared responsibility payment” prescribed in the ACA will not be more than the cost of health insurance, and it may be less depending on one’s income and other factors. As Chief Justice Roberts noted, some families may decide their best economic course is to forgo insurance and pay the tax. If they stay healthy, that may be indeed be their best choice. But if they get seriously injured or suddenly ill, the insurance they buy might not cover costs incurred before they bought the policy, and they may find that paying the tax rather than having insurance wasn’t so smart after all. If they can’t pay those pre-insurance costs, losses incurred by the hospital and other health care providers will be offset, in part, by the “shared responsibility payment” the uninsured person had been paying.

Here are my winners and losers, in terms of legal precedent:

• Winners: Congress, Supreme Court, Nudgers, Voters – Congress won, as the Court recognized that the ACA fell within long-standing constitutional precedent. The Supreme Court did not interpose themselves as a super-legislature, and issued a reasoned opinion. Nudge advocates won, as the Court reaffirmed Congress’ authority to use the tax code to encourage socially beneficial behavior and discourage socially harmful behavior. And voters won. Chief Justice Roberts and the majority held that, so long as Congress and the president do not transgress the Constitution, elections and their consequences must be respected.
• Losers: Paul Ryan, Republicans – The surprising losers are Rep. Paul Ryan (R-WI) and Republicans, whose Medicare ‘reform’ plan would have given vouchers to seniors and required them to buy their own health insurance. Unless the plan is rewritten to make private insurance an option and/or include a tax penalty for seniors who don’t buy insurance, I don’t see how it would survive Court scrutiny under this precedent.

Policy Winners and Losers

In terms of policy, the outcomes are a little clearer:

• Winners: – As Paul Krugman and many others noted, the big winners Thursday were most Americans who need health insurance. Once the exchanges and Medicaid expansion are fully implemented, almost all Americans will be able to get health insurance through their employers, or individually in a better-regulated market, or through federal or state programs. While the ACA is not a perfect bill, it is a huge step forward.
• Losers: – Yet not everyone will benefit immediately. Many Republican-led states may refuse to implement the Medicaid expansion, at least until they and voters no longer associate it with President Obama and Democrats, denying affordable care tens of thousands of low-income Americans. While Gov. Bobby Jindal (R-LA) and some other Republican governors have declared they will not implement state insurance exchanges, that is less troublesome. Under the ACA, if a state refuses to create a health insurance exchange, the federal government will create it instead.

Political Winners & Losers

Although pundits and other prognosticators began weighing in on this within seconds after the decision was released, I left it for last. While elections are important, we progressives cannot forget that government must be about something more than who wins the next election. The ACA is a legislative landmark, and a huge step toward ensuring universal access to health care in the U.S.

But there’s also some self-interest involved. I didn’t make a prediction about the Court’s ruling on the ACA, because my experience has been that Court decisions are not very predictable. Likewise with the political responses to Court decisions.

Those on the right have been dancing with joy over Chief Justice Roberts “declaring ObamaCare a tax,” even as some of them say that must have happened in an epileptic fit. In the RedState article linked above, Erick Erickson claimed the Supreme Court “just handed Mitt Romney the White House,” by firing up a dormant Tea Party while lulling progressives into a false sense of security. I wouldn’t measure the drapes yet.

While studying Go in Okinawa, I once asked my sensei if I’d just made a good move. He replied: “Good move, bad move, all is next move.” And here as well.

If President Obama, Democratic candidates, and we activists use this decision as a springboard to discuss the many positive (and popular!) elements of the Affordable Care Act, this becomes a win-win. We should emphasize that the Supreme Court found the ACA is a kind of solution, authorized by an enumerated power, that our federal government has used and our courts have upheld for two centuries.

And we should emphasize that – contrary to spin from Republicans and some on the Professional Left – the Supreme Court did not rule that health insurance premiums are taxes paid to a private corporation. Instead, the Court said people can refuse to buy health insurance, but they can’t be freeloaders. They owe a “shared participation payment,” a tax to offset the inevitable costs when they need health care and haven’t prepared to pay for it. That is called “personal responsibility.”

If progressive Democrats make the right “next moves,” this landmark Supreme Court decision on this landmark Democratic achievement will become a political win-win. It’s your move….

(Crossposted from Blogistan Polytechnic Institute (BPICampus.com))

(By NCrissie B)

The media reporting a 5-4 Supreme Court decision upholding the Affordable Care Act is not wrong, but it’s not exactly right either. In their 193-page decision, the Court weighed several issues: whether the case was premature under the Tax Anti-Injunction Act, whether the individual mandate was authorized by the Commerce, Necessary and Proper, or Taxing and Spending Clauses, and whether the Medicaid expansion was a legitimate inducement or an unconstitutional coercion of state action. The votes were different on each issue, and those differences may be significant in future cases.

Was the case premature under the Tax Anti-Injunction Act? NO (9-0)

The Tax Anti-Injunction Act (TAIA), first passed in 1867 and reenacted in 1954, prohibits courts from blocking the collection of taxes enacted by Congress. Instead, individuals must first pay the tax. Then, if they have legal grounds to object, they may petition the IRS for a refund and file a lawsuit if the IRS does not respond. Thus, a tax cannot be challenged in court until it has been paid.

As mechanism for enforcing the individual mandate is a “penalty” paid to the IRS, and as neither the mandate nor the “penalty” take effect until 2014, no one has yet paid that “penalty.” Some legal scholars argued that – because the “penalty” looks a lot like a “tax” – the individual mandate could not be challenged until the “tax” was due and paid, in 2014. The Obama administration did not raise this defense, but the Court solicited briefs from other parties and considered the issue.

– Chief Justice Roberts held that as the TAIA was enacted by Congress, Congress has the authority to decide whether the TAIA will apply to a law. Congress expresses such decisions by using or not using “tax” and related words in drafting a law. As Congress did not term the individual mandate “penalty” a “tax” – Chief Justice Roberts held – Congress did not intend the TAIA to apply to that provision and the challenges to the ACA were not premature. No Justices dissented.

Was the individual mandate authorized by the Commerce, Necessary and Proper, or Taxing and Spending Clauses? NO (1-3-1-4), NO (5-4), YES (5-4)

The Obama administration claimed the individual mandate was authorized by the Commerce Clause, the Necessary and Proper Clause, and/or the Taxing and Spending Clause. Note that the Court did not have to find the individual mandate was authorized by all three or even two of these three clauses. Any one would suffice. The Court split differently on each clause:

• Commerce Clause: NO (1-3-1-4)– Chief Justice Roberts held that while Congress has long regulated the supply of goods and services, Congress may not regulate the demand for goods and services under the Commerce Clause. That is, Congress may regulate market “activity,” but not market “inactivity.” Contrary to some media reports, Chief Justice Roberts did not “narrow” Congress’ authority under the Commerce Clause. He simply refused to expand that authority to cover demand or “inactivity.”

  – Justices Scalia, Kennedy, and Alito concurred, making essentially the same argument (but with more mentions of broccoli).

  –Justice Thomas concurred in a separate opinion that would have narrowed Congress’ authority under the Commerce Clause.

  – Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented, writing that almost everyone buys health care at some point, either through health insurance or “self-insurance.” Thus, they argued, almost everyone “participates in” the health care market and Congress may regulate that under the Commerce Clause.

• Necessary and Proper Clause: NO (5-4)– Chief Justice Roberts, joined by Justices Scalia, Kennedy, Thomas, and Alito in a separate opinion, held that the Necessary and Proper Clause could not stand alone to authorize an act of Congress that was not authorized under another provision of the Constitution. It was not, in Chief Justice Roberts’ wording, a “by any means necessary” provision.

  – Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented, arguing that the guaranteed issue and community rating provisions of the ACA would fail without the individual mandate, thus the mandate was “necessary and proper.”

• Taxing and Spending Clause: YES (5-4)– Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, held that the individual mandate could reasonably be read to establish a tax for people who did not buy health insurance. While Congress did not invoke the TAIA by calling the “shared responsibility fee” a tax, Chief Justice Roberts held that the TAIA issue was a statutory decision of Congress, while the Taxing and Spending Clause issue was a separate constitutional decision for the Court.

  – Justices Scalia, Kennedy, Thomas, and Alito dissented, arguing the Court must either find the “penalty” or “shared responsibility fee” was a “tax” (making the entire case premature under the TAIA) or was not a “tax” (making the individual mandate unconstitutional).

– Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan held that because the individual mandate was constitutional under the Taxing and Spending Clause, there was no need to consider whether the rest of the ACA could survive without the mandate.

– Justices Scalia, Kennedy, Thomas, and Alito dissented, arguing that Congress had not specified that the rest of the ACA could be upheld without the individual mandate, and indeed that the rest of the ACA would be unworkable without the mandate. They would have overturned the entire ACA.

Did the Medicaid expansion induce or coerce state action? PENALTY NARROWED: 3-2-4

– Chief Justice Roberts, joined by Justices Breyer and Kagan, held that the Medicaid expansion provision – which would have withheld all of Medicaid funding unless a state expanded Medicaid eligibility to all adults earning less than 133% of the federal poverty level – was indeed unconstitutionally coercive. Cutting off all federal Medicaid funds to states that did not expand eligibility would have gutted their budgets, forcing them to end existing Medicaid programs, raise taxes to make up for lost federal funding, or cut other state programs. However, they held that the provision was constitutional if read to apply only to new federal funds designated for expanded Medicaid eligibility, and thus they interpreted the provision that way.

– Justices Ginsburg and Sotomayor dissented in part, arguing that the Medicaid expansion provision was an inducement similar to previous federal changes in Medicaid, and concurred in part, accepting Chief Justice Roberts’ remedy.

– Justices Scalia, Kennedy, Thomas, and Alito concurred in part, agreeing that the Medicaid expansion was coercive rather than an inducement, and dissented in part, arguing the only remedy was to strike the entire Medicaid expansion provision.

Tomorrow we’ll discuss what the decision means – and what it doesn’t – for the future of the ACA, Medicaid, and the Commerce Clause.

(Crossposted from Blogistan Polytechnic Institute (BPICampus.com))