2012-06-29

Random Thoughts about the Affordable Care Act

Unless you have been living under a rock these days, you know that this week, the United States Supreme Court ruled (5-4) in favor of the Affordable Care Act (ACA), more popularly known as "Obamacare". What shocked everybody was that Chief Justice John Roberts was in the majority of that ruling. Basically, he and other Justices reinterpreted the clause about the ACA mandating the purchase of health insurance as being a tax rather than forced commerce. In addition, the only major setback to the ACA was the striking down of the clause saying (if I understand this correctly) that states must expand Medicaid coverage to cover low-income people who would otherwise be unable to afford the mandated insurance or else forgo funding for health care entirely. (Please note that I am not anything close to a legal scholar. The following constitutes little more than random mumbling, so you don't have to take it for more than that.)


I'm not entirely clear on whether in the arguments before the Supreme Court, the defense lawyers actually made the argument that the mandate could be construed as a tax. For some reason I have been under the impression that no such argument was actually made at the Supreme Court, though there was debate about that matter while the bill was being drafted in Congress. If such an argument was not made and the only argument made was that the mandate constitutes compelling commerce, then while I support the end result of the ruling, I feel like Roberts construing the mandate as a tax based on previous arguments made that were not specifically heard by the Supreme Court is an instance of judicial activism. If that is the case, I'm not sure I entirely support the ruling, because this would be Roberts doing much more than simply "calling balls and strikes"; Roberts really should have simply struck down the mandate-as-commerce, saying that the law should be rewritten to show that the mandate is a tax, because while that may be more tedious, it is the proper, democratic thing to do. If, on the other hand, the argument for the mandate as a tax was in fact made before the Supreme Court, then Roberts really did the right thing by showing that this taxing power does not broaden the existing ability of Congress to enforce taxes.

Also, while it is unfortunate that Medicaid not being further expanded means that more poor and disabled people won't get covered, it makes sense to not push states harder. The reason why states can balance their budgets is exactly because the federal government does not have to do so, but now many states have codified balanced budgets. This rather constrains what they can do, and having so many federal programs requires federal tax revenue, so state tax revenue gets squeezed, meaning that further pushing states to expand Medicaid would just be cruel and unusual.

Finally, I should say that my views on the ACA and health care in general have changed a little bit. I still believe that universal health care is the only way to go, and that is just because a free market for health insurance cannot exist. Why is that so? That is because insurers don't want to insure people at risk of getting frequent or costly illnesses (hence the whole debate over preexisting conditions), but the buyers of health insurance (the general public) know more about their own health than the sellers (insurers) do, so the lack of full information in both directions causes the market to collapse. Insurers won't sell to the buyers who need insurance, while the buyers who don't really need insurance of course won't buy it, so insurance companies cannot make a profit in this double-whammy situation. The best way to counter this is to make everyone buy health care, because subsidies for buying insurance haven't really helped, whereas if everyone buys health care, the costs of care are spread a bit more evenly instead of having healthy people foot the bill for the repeated emergency room visits of sick people.
At first, I thought that the best way for universal health care to work would be through a single-payer system. That is because I didn't feel comfortable with the notion that people would have to be forced to buy something, even if the end result would be the same as in a tax. I thought that because Congress already has an established broad authority to tax, that would work better constitutionally and institutionally. But now as I think about it more, I think I am actually more in favor of the individual mandate. For one, it cuts the government out as the "single payer" and simply relegates the government to the role of enforcing the mandate, meaning that the government would seem to have less opportunity to meddle in care that is distributed to the public under a single-payer system. Here, people can directly choose what kind and level of care they want. The corollary to that is that this now only those without insurance get taxed for health care rather than everyone, so that now the single-payer system essentially only goes into effect for those without health care, while as far as I can see, those already with health care shouldn't see significant changes. In terms of individual freedom, that seems like a better deal, and in terms of actual health outcomes, it should be the same as a single-payer system.
Then again, most taxed commercial activities that affect consumers have to do with purchases that are made rather than purchases that are not made. I would like to know if there is good legal precedent for taxing people who don't have something but not taxing people who do; if there isn't, and if this tax clearly has the intent to compel commerce, then at least in my mind the individual mandate becomes much murkier, and I would lean towards a single-payer system. So I guess as it stands right now, I have too many questions and not enough answers to have a set opinion on whether I would prefer universal health care through an individual mandate [as a tax] or through a single-payer system.

Anyway, I'm glad the ACA was upheld, considering that I am a college student with some health issues that could possibly otherwise cause me to be denied insurance. I'll just have to see what happens in November of this year to see the final outcome of this.

2 comments:

  1. Yeah, I feel the same way. I think while single-payer systems might work for some countries, healthcare makes up 1/6th of our economy and to suddenly put all of that in control of the federal government (while managing all of its budgeting issues) doesn't sound like the best idea. Given the choice between the PPACA and the current system, the PPACA is the better choice.

    That being said, there is room for more "free market" solutions, such as removing tariffs and bans on importing drugs, shortening patents, and reducing the dependence on employer-based coverage. Singapore offers a more market-based alternative (although it isn't near a free-market) to health insurance and it seems to keep costs down for the most part.

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    1. @Chris: I do agree with the assessment that while it is important to ensure appropriate checks and balances regarding government oversight of health care, the new law is probably a lesser evil than the current system. Also, I agree with you on the issues of tariffs (I actually think most tariffs should be eliminated on principle) and patent lengths, considering that even though the drug industry is supposedly the one that should need patent protection most due to costly investment and development, studies have shown even this to be questionable at best. That said, with regard to who covers whom, what are you suggesting as an alternative to employer-based coverage? Anyway, thanks for the comment!

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