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The Republic Lives!: The Supreme Court Upholds the Affordable Care Act, Part I

Date posted: Thursday, June 28, 2012

Analyzing the landmark opinion from the legal, political, and policy standpoints.

Photograph via the AP

Photograph via the AP

Editor’s note: The ramifications of today’s landmark Supreme Court opinion, which largely upheld the Affordable Care Act, could take years to be realized. Unfortunately, we want to discuss it now. To help analyze and prognosticate, we brought together Anthony Resnick to talk politics, Sam Ennis to talk legality, and Sally Rodriguez to talk policy. Because the discussion has just begun, we will run Part I today, and Part II on Monday.

Anthony Resnick

Today’s health care opinion: good for America, good for the rule of law, good for democracy, good for sick people, good for President Obama, but bad for commentators preparing to rail against Justice Scalia, the illegitimacy of the Roberts Court, and the collapse of the American Republic.

The upshot is that the Affordable Care Act was upheld, but not in the way that anyone expected. Justice Roberts, but not Justice Kennedy, joined the liberals on the Court in finding the individual mandate and the remainder of the Act constitutional. The mandate was found constitutional under Congress’ taxing powers but not, as was considered more likely, under the Commerce Clause. Justice Kennedy, long thought to be the Republican appointee most likely to join the Democratic appointees in salvaging at least parts of the Act, joined the conservative wing in dissent and would have found the entire Act unconstitutional.

From a health policy perspective, this seems to be an unqualified, but temporary, win. The Act survives in its entirety, and its fate goes back into the hands of the electorate. From a legal standpoint, the result is murky. The Act is a fairly unique, so the end result may ultimately be all that matters. But will there be long-term significance to the narrow reading of the Commerce Clause given by the Court’s five conservative justices? While the Act survived, the most radical argument brought by its opponents was accepted by a majority of the Court. Politically, the result is also murky. President Obama and Congressional Democrats can continue to campaign on the Act’s popular provisions, and can paint repeal-happy Republicans as opposed to those provisions. Having Roberts, who is seen as more partisan than Kennedy, as the deciding vote bolsters the Act’s legitimacy. But having the mandate framed as a tax makes it even more difficult to defend politically. More to come on all these points.

In thinking of how to frame this discussion for my cohorts, I think it’s best to drop any pretense that we aren’t all freedom-hating, broccoli-loving, job-destroying socialists. So my question is: why is this a great day for America?

Sally Rodriguez

I think this is indeed a great day for America, but I’m worried about the coming weeks. While talking with health policy consultant friends, I said I was excited about the ruling because it means less work for us, in terms of having to walk our clients through 100 possible scenarios based on today’s decision. But now I feel a bit short-sighted in that comment. I’m starting to feel the oncoming dread of the next battle, which will start to really shake out after the election. Next year there might not be an ACA to debate, if the Republicans get their way. How sad that it only took a few hours for me to lose my excitement.

What policy analysts are going to tell their health provider clients today is just a slightly different version of what we were saying before: “Heads up—your whole world is about to change, but we’re not sure how.” The “world” of health care was already changing, and this ruling is actually a pretty small piece of that puzzle. What many people don’t realize is that the Affordable Care Act already sparked the flames of serious, fundamental change within Medicare and Medicaid. What today’s ruling hopefully means is that the private health insurance market will experience major change as well, in the form of a much larger risk pool and of lowered premiums. So, in my mind, today’s ruling preserved one key piece of a huge, interconnected web/hot mess of health reform. But Congress can still threaten so much of it. Between the calls for repeal, deficit reduction pressure, the SGR issue (don’t ask), and many other potential cuts to Medicare and/or Medicaid, health providers have already forgotten about today—there are so many threats and what-ifs coming tomorrow. In other words, my job as a consultant is safe for the foreseeable future.

Getting back to the point, and the optimism, the mandate, at the end of the day, is good for almost everyone. Insurers get more covered lives, providers have to dole out less uncompensated care, people get better coverage options at relatively reasonable prices. Employers have less power over their employees (i.e. I no longer have to stay at this job just for the benefits), which I call a good thing. So hooray for the ACA. I’m glad I don’t have to say we hardly knew ye.

Sam Ennis

Although I refuse to allow my euphoria to wear off quite yet, I agree with Anthony that there are disturbing repercussions from the opinion (which, in full disclosure, I’ve thus far only skimmed): specifically, the majority’s surprising acceptance of the, in my opinion, specious argument that the individual mandate is somehow unconstitutional under the Commerce Clause and the characterization of the mandate as a tax (and accompanying political fallout that Republicans have already seized upon). And as a health care attorney, I agree with Sally that the devil is in the details: while my clients, American Indians and Alaska Natives, are exempt from the individual mandate and are entitled to cost-sharing waivers and other protections within the state health exchanges, that is wonderful only in the abstract. How will Exchanges know who is an Indian? How will Indians know how to navigate the Exchanges and enroll in Medicaid? Questions still abound.

But more on the specifics of the law later. For now, let’s speak in abstractions.

As an attorney, today is a great day for America because, at a very visceral level, I believe it will help to restore the faith of many Americans in the impartiality and institutional legitimacy of the Supreme Court. Stemming primarily from the political fallout of the Citizens United decision, and from the nasty, openly hostile, and often disrespectful tone that many of the Justices took during the Affordable Care Act oral arguments, it was pretty clear that many people had grown disillusioned with the Supreme Court and had begun to disdainfully refer to the Justices as pseudo-politicians, partisan hacks, etc. This wasn’t helped by the glut of media opinions (ranging from “magnificent” to “absolute tripe”) weighing in on the ACA, what it meant politically, what it meant for the Court, and whether American could believe in the rule of law anymore (hypocrisy alert: guilty as charged on fanning THOSE flames). Polls showed that the national rancor over Citizens United and the ACA profoundly impacted many peoples’ views of the Supreme Court and led many to assume that one could simply “predict” the outcome of virtually any case based entirely on partisan grounds. In a nation that is profoundly (albeit, almost uniformly uneducatedly . . . yes, I know “uneducatedly” isn’t a word) attached to the Constitution and its unique history, it was a striking development and one that I, as an attorney, saw as almost delegitimizing America’s belief in the legal system.

But these politically charged, incredibly high profile cases, while potentially of manifest importance to the country, are often blown out of proportion by the media onslaught and unfairly characterize the business of the Supreme Court as wading into political frays left and right. What many, and perhaps most, don’t realize about the Supreme Court is that some of its most landmark decisions on an individual level receive far less attention than cases like Citizens United and the ACA. For example, today the Court also struck down on First Amendment grounds a law that criminalized lying about military service and medals, a fairly high profile case in light of the plaintiff’s fascinatingly despicable false claims about having been a Marine and received a Medal of Honor. But, in terms of the impact on anyone’s daily life, who the hell cares? How many people ever have, or ever would, be prosecuted under that law?

By comparison, last year the Court issued a ruling that made it exponentially more difficult to bring a class action lawsuit against a national employer (Wal-Mart), something that could drastically impact the lives of millions but which received little fanfare outside of legal circles. These latter decisions are the ones that truly allow attorneys and the general public to determine the direction of our constitutional system, and often involve surprising coalitions of liberal and conservative Justices coming to the same results. But because it’s far easier (and more profitable) for the talking heads to yammer about 5-4 splits and Thomas being illiterate and Scalia having a “Romney 2012” sticker on his gavel, many unfairly believe that the Supreme Court operates in a series of inevitably partisan swings. Although the ACA was upheld 5-4, in light of the fact that the Court’s purest conservative, Chief Justice Roberts, sided with the liberals and authored the majority opinion, I hope that some of the cynicism will fade and Americans will slowly begin to believe that there may, in fact, be more to the Supreme Court than politics.

Meanwhile, as an aforementioned broccoli loving Socialist, few things in life have given me more joy than watching Republicans fall down trying to spin this into a precursor of the job-killing free-for-all that will inevitably hand Romney the election. Going back to high-profile talking point politics, Anthony, the big question is, What will this mean for the election in the short term? With the Romney campaign already taking heat for his bogglingly non-responsive response to Obama’s immigration decision and the Arizona immigration law’s loss in the Supreme Court, how can he somehow play this into his favor? And Sally, in your experience, have health care professionals generally backed or opposed the Affordable Care Act?

Sally Rodriguez

To respond to Sam, I was working at GAO, not consulting, when the ACA was working its way through Congress. I wasn’t privy to a lot of the insider discussion by providers, but I can make an educated guess that they liked some provisions and not others. They still feel that way. With a reform so sweeping, the providers were inevitably going to get some carrots and some sticks. I do know that what we call “bad debt” is a major issue for providers; this is the money they will likely never make up due to non-payment. So for them, a fully insured world is probably a better deal. The problem with that sort of simplification is that our provider clients are wary of insurers, so even though they could have less bad debt, they could end up with lower rates because of the ever-increasing penetration of managed care. Further, and this is probably getting a bit wonky, both the private market and Medicare/Medicaid are shifting a lot of risk to providers; they’re going to be held accountable for the quality and efficiency of their care. That is most definitely the scariest thing for them, and the ACA significantly advanced that trend within the public programs. So, I would imagine they were pretty scared by the ACA. But at the same time, it wasn’t kosher for them to go out yelling, “Hey, the ACA is bad—we don’t want to improve quality and lower costs!” I think there is a grudging acceptance by health providers that the world needed to change, and it wasn’t going to be easy. They had to acknowledge that at least publicly.

Side note: the only good thing for the Republicans is that now they have even more time to come up with their replacement health care plan . . . we’ve all been waiting for years to see this brilliant reform plan that simultaneously raises no taxes but lowers health care costs without forcing people to buy insurance. That thing’s been marinating so long, I just can’t wait to see it. I’ll put $1,000 on tax credits (so helpful to the poor!) and health savings accounts (Americans are awesome at voluntarily saving for unforeseeable events!).

Anthony Resnick

Sally, it seems to me that the uncertainty over the future of health policy is compounded by A) not knowing who’s going to win in November, and B) not being able to predict exactly what Romney will do if he wins. Saying “I’m going to repeal Obamacare!” is a talking point that Romney has to employ given the fervor of the Republican base on this issue. And the law polls badly enough nationally that it’s a safe talking point. But if elected, President Romney would face a hell of a dilemma in deciding just how far to go in repealing or neutering the Affordable Care Act. He would have little choice but to sign any legislation sent to his desk by a Republican Congress. But in terms of using executive orders or enforcement discretion to avoid implementing the Act, or encouraging Congressional tactics like reconciliation to avoid a Democratic filibuster for repeal? Those are far riskier propositions. Before the Affordable Care Act, the political dynamic around health care in America was, “Yes, 45 million people without health insurance is a problem, but what’s the solution?” If Romney pulls out all the stops to totally gut the Act, and doesn’t really have a plan to solve the problems the Act is aimed at addressing, he risks changing that dynamic to “45 million people without health insurance is a problem, and it’s Mitt Romney’s fault.” The number of contingencies if the Republicans win in November seems endless, and I don’t envy your job one bit. Is there an actual Republican plan that you’re game-planning for, or is it merely the dismantling of what the Democrats have enacted?

Addressing Sam’s question about the short-term political fallout, I don’t think it’s terribly significant. Conservatives will remain adamantly opposed to the law, most liberals in favor, and many swing voters uneasy. I don’t think Obama and Romney’s arguments on health care change all that much, though there will be extra emphasis from Romney and his allies about the tax label now given to the mandate. The President will get a favorable few days of media coverage, and Roberts’ vote in support of the Act will lend it extra legitimacy that may comfort some swing voters. Romney will get a fundraising boost by emphasizing that he is now the last best hope for conservatives that see “Obamacare” as the end of liberty. But after a week or so of ACA-centric media coverage, the race will be pretty much where it was a month ago. Health care will remain a hotly contested issue, but the focus will quickly shift back to jobs and the economy.

Sam, I’d like to get more into the possible “disturbing repercussions” of the Commerce Clause section of the Court’s opinion. On a closer reading of that section of the opinion, I’m not sure there are any significant long-term repercussions. Roberts recognizes the broad reading that has been given to the Commerce Clause since the New Deal and does not purport to narrow it or to reverse any of the Court’s Commerce Clause precedents. Instead, he relies on the argument that the individual mandate is novel in that it compels activity (the purchase of insurance) rather than regulating activity in which individuals voluntarily choose to engage. This is a disappointing holding, but not one that I expect to be terribly significant. There’s good reason why in almost eighty years of post-New Deal social welfare legislation this is the first time that this activity/inactivity issue has come before the Court. The individual mandate is a unique solution to a unique problem, and it’s difficult to imagine what other legislation we would want Congress to pass that would rely on a “compel activity” precedent. And even if that day should come, the tax section of the ruling shows the way around the Commerce Clause section: when Congress decides it wants to force us all to eat broccoli, it can do so by taxing those of us who choose not to.

Quick addition: I feel validated that Nate Silver’s analysis of the politics of the decision largely matches my own. While I’ll freely admit to stealing much of my political analysis from Silver, I’m willing to produce time-stamped e-mails and sworn affidavits from my correspondents proving that, at least in this case, I reached my conclusions independently.

Sam Ennis

Anthony, as others have already pointed out, I believe that this opinion is, in many ways, a wolf in sheep’s clothing. Let’s put aside for a moment the political and legal ramifications of the majority opinion’s characterization of the individual mandate as a tax, and the fact that Republicans are already howling about how the Affordable Care Act is in reality a thinly disguised tax hike. The most significant portion of the opinion, in my eyes, comes from Chief Justice Robert’s acceptance of what I have written is a ridiculous argument, and one that no one even took seriously until the Republican media and political machines threw all of their support against it: that the individual mandate somehow unconstitutionally regulates “inactivity.” If you read the opinion, Chief Justice Roberts includes several platitudes seemingly acknowledging the scope of congressional regulatory authority under the Commerce Clause. But, as an homage to the right-wing overuse, he repeats the maddeningly inaccurate claims that upholding the individual mandate under the Commerce Clause will somehow allow Congress to force you to buy broccoli and cars (literally). He then includes the following quote:

Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Congress already possesses expansive power to regulate what people do. Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do. The Framers knew the difference between doing something and doing nothing. They gave Congress the power to regulate commerce, not to compel it. Ignoring that distinction would undermine the principle that the Federal Government is a government of limited and enumerated powers. The individual mandate thus cannot be sustained under Congress’s power to “regulate Commerce.”

Facially, this may seem to be just another rehash of the conservative argument in the very specific context of health care reform: something, as you suggest Anthony, which may be cabined to the unique context of the Affordable Care Act and certainly not far reaching. But there are a few important factors at play here. First, until recently, the Commerce Clause existed almost as a carte blanche for congressional regulatory authority. But in the past twenty years, the Court has issued several opinions rejecting the government’s argument (interestingly enough, specifically the Clinton and Obama administrations’ arguments) that Congress can regulate seemingly obvious commercial activity under the Commerce Clause. This lurch to the right reflects the general conservative pushback against government regulation generally by striking at the heart of Congress’s power to enact comprehensive national legislation. In what some have argued reflects a naked anti-Obama bias, perhaps the most absurd recent illustration is the portion of Justice Scalia’s new book in which he argues that Wickard v. Filburn, the Court’s precedential underpinning of Commerce Clause jurisprudence, was wrongfully decided (Scalia, of course argued forcefully that Wickard gave the government broad power to outlaw medical marijuana as recently as 2005).

The reason that I think Chief Justice Roberts’s opinion is potentially disastrous regarding the Commerce Clause is three-fold. First, it legitimizes and fuels the conservative anti-government legal movement by giving them a stepping stone from which to attempt to further restrict the federal government’s regulatory authority. You can bet your life that assuming Obama is reelected, Republicans will initiate lawsuit after lawsuit challenging Democratic-favored legislation under the Commerce Clause, citing this opinion for the proposition that the Commerce Clause is limited, and betting that Roberts and friends will entertain those theories, no matter how crackpot they may have seemed thirty years ago.

Second, in my opinion, the “individual mandate is constitutional as a tax but not under the Commerce Clause” is manifestly the result of a political compromise. There is absolutely no chance that any of the Court’s four liberal Justices believe that the mandate is unconstitutional under the Commerce Clause, and I would bet that Roberts doesn’t believe that it’s constitutional as a tax. But, the liberals realized this was the only way it was going to get upheld, and Roberts realized it was the only way to maintain any semblance of the Court’s legitimacy. But, now conservative lawyers have an opinion, signed by the Court’s four liberals, supporting a very narrow view of Congressional power under the Commerce Clause, and in an opinion that was so delicately balanced that the liberals will be loathe to revisit it. This only adds further support for any future challenges to the decision or to future government action.

Finally, I think that this gives the Romney campaign, and conservatives in general, a condolence prize: although the individual mandate was upheld, it was a TAX! AN EVIL, JOB CRUSHING TAX! To the extent that the government had argued it was valid under the Commerce Clause, IT WAS UNCONSTITUTIONAL AND THEY WERE WRONG! BIG GOVERNMENT! EVIL! WHAT WILL THEY DO NEXT?!?! While this may be too complex for many voters to really latch on to, it does provide a useful talking point as a way of spinning this as dual examples of the Obama administration’s death march toward an Orwellian gulag state.

Don’t get me wrong: I’ve always been convinced of the ACA’s constitutionality, and although it’s obviously not perfect and, in my opinion, doesn’t go far enough, I believe that it’s a good piece of policy and is a desperately needed first step towards addressing America’s health care delivery crisis. I’m absolutely thrilled that it’s been upheld and think that the Court made the right call, overall. My fear is simply that after the initial joy/rage dies down, liberals may realize that Chief Justice Roberts didn’t give them as much as perhaps they’d thought.

Sally Rodriguez

Absolutely agreed, Anthony—everything is uncertain because of the politics. From a pure policy standpoint, many of us want the law to stand, essentially as passed, because we haven’t seen the key provisions in action (2014 is going to be interesting if ACA stands). Unfortunately, the political reality threatens our ability to watch the policy work in an unfettered way. In addition to the constant threat of repeal, all the intermediate politicking slows the reform process down too; instead of building infrastructures to thrive under new ACA programs and pilots, some providers are devoting significant resources to policy analysis and lobbying for more near-term issues.

We haven’t been anticipating any one Republican health care plan; in truth, we’ve been focused more on the contingencies if all or part of the ACA were overturned (you don’t want to see the ridiculous flow charts that effort produced). At this point, no one is really talking about a Republican plan, though it doesn’t stop me from loudly pointing out that we haven’t seen one. We’ve seen this talk about making Medicare a voucher program and making Medicaid a block grant program, and both ideas are so rash and unpopular (whether on a population or state government level) that I am not particularly worried about them gaining traction. What we are planning for is a big Republican-sponsored deficit reduction package that could include an ACA repeal or any number of the other sinister cuts and reforms that I alluded to earlier. Frankly, a Democratic deficit reduction package done in the lame duck session or later could be just as concerning for health providers; the nature of deficit reduction means providers will see cuts. They’re going to be more focused on their bottom line than on the fate of the ACA—a lot of people think that health care providers are rolling in money, but in most sectors, that’s not the reality. Given the uncertainty you point out, and the fact that uncertainty about the future of the U.S. health care system has been there for decades (albeit more so now), providers are more likely to do what they know: fight the smaller, more near-term threats to their revenue, like Medicare payment cuts.

Click here for Part II.

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Sam Ennis is an attorney working for a national law firm that represents Indian tribal governments, Alaskan Native corporations, Native American-owned health corporations, regional tribal confederations and Native American health and social service providers. The views and opinions in this article do not represent those of his firm or its clients.

View all posts by Sam Ennis →


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One Comment

  1. The Republic Lives!: The Supreme Court Upholds the Affordable Care Act, Part II | CONSTRUCTIONJuly 2, 2012 at 12:13 pmReply

    […] II Additions > Correspondences by Sam Ennis, Anthony Resnick, and Sally Rodriguez Posted on Monday, July 2, 2012 at 12:12 pm Understanding John Roberts and the Commerce Clause. Plus, what will happen with […]

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