Obamacare’s Future Still Shaky
Judging from much of the media coverage of the Supreme Court’s ruling over the past 24 hours, one would think the law had been given a clean bill of constitutionality by the Court, meaning Obamacare faces smooth sailing from here on in. But as ESPN’s Lee Corso might say, “Not so fast, my friend!”
First, as we pointed out yesterday, part of Obamacare WAS ruled unconstitutional by the Court – and by a 7-2 margin, no less. That bears worth repeating: Even Justices Elena Kagan – one of President Obama’s appointees, and his former Solicitor General – and Steven Breyer – a former Ted Kennedy staffer – thought Obamacare’s Medicaid expansion was unconstitutionally coercive. So much for “Are you serious?”
Second, Obamacare faces continued obstacles on numerous fronts, including in the courts:
- (More) Constitutional Uncertainty: Other Obamacare provisions are subject to constitutional litigation. For instance, the law’s Independent Payment Advisory Board – that bureaucratic spawn so dangerous President Obama is afraid to appoint nominees to it during his re-election campaign – has been challenged as giving unelected and unaccountable officials carte blanche to re-write Medicare policy, thereby usurping the role of Congress. Former Obama Administration budget chief Peter Orszag thinks IPAB is one of the lynchpins of the law, precisely because it is constitutionally questionable – or, as he put it, “less democratic.”
- Legal Uncertainty: Challenges to other elements of the law – such as its infringements on religious liberty – that had been delayed during the Supreme Court’s consideration will now proceed apace. Also likely subject to a legal challenge is the Administration’s regulatory ruling indicating that individuals in a federal exchange can receive insurance subsidies – which appears to violate the plain text of the statute.
- Funding Uncertainty: While some implementation funding was included in the law, most of that money has been spent – meaning the Administration has to come back to Congress for more money through the annual appropriations process. Amidst all the reaction to the Court ruling yesterday, many may have missed the fact that the White House issued a veto threat against an appropriations measure being considered in the House, in part because the appropriations bill restricts funding to the IRS for implementation of Obamacare – including implementation of the health insurance mandate tax. As a reminder, Obamacare does NOT give HHS mandatory funding to establish a federally-based exchange, which is why the Administration requested more than half a billion dollars in new discretionary funding for a federal exchange in its budget this February. Given that the federal government is running trillion-dollar deficits, why does anyone think Congress should be favorably inclined to spend billions more implementing a law the Supreme Court has admitted is a constitutional overreach?
- State Uncertainty: Yesterday’s ruling gave states the ability to opt out of the law’s new Medicaid expansion – which according to the Medicare actuary accounts for more than half of the law’s coverage expansions – without giving up their existing Medicaid funding. States can also decide not to create state-based exchanges, and many have declined to create them. Even Tom Daschle, President Obama’s once-putative HHS Secretary, admitted that the law is so cumbersome and unwieldy that states are unlikely to be ready for its “Big Bang” in January 2014. And yesterday’s ruling should not give states any more incentive to implement an unconstitutional law – it may well give them less incentive to do so.
- Electoral Uncertainty: This topic should be self-evident. However, it does give me the opportunity to point out the conservative justices’ observation in their dissent that “cutting Medicare is unpopular” (page 59). Which is a delicate way of pointing out that senior citizens may not like the idea that Obamacare uses more than $500 billion in Medicare savings not to improve Medicare’s financial stability, but to create a new entitlement. And as President Obama likes to say, “Elections have consequences.”
- Overall Uncertainty: Even as the Administration attempts to claim victory and certainty on implementation, the true picture is far from clear:
- States could opt out of the Medicaid expansion;
- More states could choose not to create Exchanges;
- The federal government could lack the resources necessary to create a federal Exchange;
- Courts could overrule federal bureaucrats’ arbitrary decision, and decide that Obamacare does NOT authorize insurance subsidies to those enrolled in a federal Exchange – thus undermining both the subsidy regime and the employer mandate.
The most important point is this: The American people don’t want this unconstitutional law – and they never have. To argue that implementation will proceed full-speed ahead – in the face of public opinion, the significant obstacles ahead, and a Supreme Court ruling calling parts of the law unconstitutionally coercive – may strike some as whistling past the graveyard.