Last month, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas issued a ruling declaring Obamacare unconstitutional. The case was brought by 20 Republican state attorneys general. Seventeen Democratic state attorneys general responded January 3 by appealing to the U.S. Court of Appeals for the 5th Circuit.
Judge O’Connor appears to be on a bit of an island — the conventional wisdom on both the right and left is that his decision will be overturned by a higher court.
If that “wisdom” holds, the courts will have saved Obamacare yet again — at least temporarily. But the judiciary is powerless to stop the ongoing collapse of the individual market. This year, enrollment in the law’s exchanges fell by 300,000, to 8.4 million people, thanks largely to the spiraling premiums and deductibles the law has brought about.
Health reform can’t be conducted through the courts. Congress will eventually have to take action.
Historically, the courts have been strong defenders of Obamacare. The U.S. Supreme Court first rescued the law in 2012, in National Federation of Independent Business v. Sebelius. At the time, the Obama administration was locked in a battle to defend the individual mandate, the provision of Obamacare that requires all individuals buy health insurance or pay a fine of the greater of 2.5 percent of income or $695.
Everyone agrees that the Constitution gives government the power to regulate interstate commerce. But does that power really include forcing people to engage in commerce — to buy health insurance?
The High Court didn’t answer that question. Instead, in a landmark opinion authored by Chief Justice John Roberts, the Court ruled that the individual mandate wasn’t a mandate but a tax on people who went without insurance. Congress’s power to tax, of course, is unquestioned.
Five years later, as part of the Tax Cuts and Jobs Act, a Republican Congress zeroed out the penalty — or “tax” — for being uninsured, effective January 1, 2019.
A group of Republican governors and attorneys general responded with a lawsuit that asked, in so many words, whether a tax of zero dollars can be considered a tax at all. Without a monetary penalty, their argument goes, the mandate can no longer be considered a tax, and so must be unconstitutional.
Judge O’Connor agreed — and went a step further by arguing that the individual mandate is not severable from the rest of the law. So if the mandate is unconstitutional, Obamacare is unconstitutional.
Progressives have been quick to object. Vox.com’s Ezra Klein points out that Congress chose to remove the penalty from the individual mandate without choosing to repeal all of Obamacare in 2017. “As such,” he asks, “Isn’t it quite clear that Congress intended Obamacare to stand even without an individual mandate imposing a penalty?”
But this line of thinking undermines the logic Democrats used to advocate for Obamacare in the first place.
Proponents of the law have long analogized Obamacare to a three-legged stool. The legs were the individual mandate, the prohibition on discriminating against people with pre-existing health conditions, and premium subsidies. Knock out one leg, and the stool collapses.
With Democrats now arguing for the virtues of a two-legged stool, it’s clear that the case for Obamacare was overstated from the beginning.
Before becoming president in 2008, then-candidate Obama claimed that his brand of health reform would reduce premiums for the typical American family by $2,500. But average individual market premiums increased by more than $2,700 in the first four years that most of the law’s provisions were in effect.
Or take President Obama’s infamous promise, “If you like your healthcare plan, you can keep it.” Insurers have been dropping out of the exchanges left and right. During last year’s open enrollment period, nearly four in ten counties had just one “choice” of insurer.
Democrats propose fixing Obamacare’s problems with an even bigger dose of government. Some 70 House Democrats have joined a new Medicare for All Caucus, which advocates for a complete government takeover of the country’s healthcare system. The leader of that caucus, Rep. Pramila Jayapal, plans to introduce a Medicare for All bill soon. Sen. Bernie Sanders will do the same in the Senate.
If the government can’t manage to provide quality health care to those shopping in the individual market, we shouldn’t expect them to be able to do it for the whole country.
Instead, Congress should pair repeal of Obamacare’s onerous and cost-inflating mandates with something like the Health Care Choices Proposal, which would distribute the money currently spent on Obamacare subsidies and Medicaid expansion as block grants to the states. States could experiment with things like high-risk pools to provide people with pre-existing conditions affordable coverage — without driving up premiums for everyone else.
The nexus of health reform needs to shift from the courtroom to Congress. Divided government may make progress difficult. But with the individual insurance market crumbling, there’s no excuse for inaction.
No Matter What the Courts Say, Obamacare Is Ineffective and Unconstitutional
Sally C. Pipes
Last month, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas issued a ruling declaring Obamacare unconstitutional. The case was brought by 20 Republican state attorneys general. Seventeen Democratic state attorneys general responded January 3 by appealing to the U.S. Court of Appeals for the 5th Circuit.
Judge O’Connor appears to be on a bit of an island — the conventional wisdom on both the right and left is that his decision will be overturned by a higher court.
If that “wisdom” holds, the courts will have saved Obamacare yet again — at least temporarily. But the judiciary is powerless to stop the ongoing collapse of the individual market. This year, enrollment in the law’s exchanges fell by 300,000, to 8.4 million people, thanks largely to the spiraling premiums and deductibles the law has brought about.
Health reform can’t be conducted through the courts. Congress will eventually have to take action.
Historically, the courts have been strong defenders of Obamacare. The U.S. Supreme Court first rescued the law in 2012, in National Federation of Independent Business v. Sebelius. At the time, the Obama administration was locked in a battle to defend the individual mandate, the provision of Obamacare that requires all individuals buy health insurance or pay a fine of the greater of 2.5 percent of income or $695.
Everyone agrees that the Constitution gives government the power to regulate interstate commerce. But does that power really include forcing people to engage in commerce — to buy health insurance?
The High Court didn’t answer that question. Instead, in a landmark opinion authored by Chief Justice John Roberts, the Court ruled that the individual mandate wasn’t a mandate but a tax on people who went without insurance. Congress’s power to tax, of course, is unquestioned.
Five years later, as part of the Tax Cuts and Jobs Act, a Republican Congress zeroed out the penalty — or “tax” — for being uninsured, effective January 1, 2019.
A group of Republican governors and attorneys general responded with a lawsuit that asked, in so many words, whether a tax of zero dollars can be considered a tax at all. Without a monetary penalty, their argument goes, the mandate can no longer be considered a tax, and so must be unconstitutional.
Judge O’Connor agreed — and went a step further by arguing that the individual mandate is not severable from the rest of the law. So if the mandate is unconstitutional, Obamacare is unconstitutional.
Progressives have been quick to object. Vox.com’s Ezra Klein points out that Congress chose to remove the penalty from the individual mandate without choosing to repeal all of Obamacare in 2017. “As such,” he asks, “Isn’t it quite clear that Congress intended Obamacare to stand even without an individual mandate imposing a penalty?”
But this line of thinking undermines the logic Democrats used to advocate for Obamacare in the first place.
Proponents of the law have long analogized Obamacare to a three-legged stool. The legs were the individual mandate, the prohibition on discriminating against people with pre-existing health conditions, and premium subsidies. Knock out one leg, and the stool collapses.
With Democrats now arguing for the virtues of a two-legged stool, it’s clear that the case for Obamacare was overstated from the beginning.
Before becoming president in 2008, then-candidate Obama claimed that his brand of health reform would reduce premiums for the typical American family by $2,500. But average individual market premiums increased by more than $2,700 in the first four years that most of the law’s provisions were in effect.
Or take President Obama’s infamous promise, “If you like your healthcare plan, you can keep it.” Insurers have been dropping out of the exchanges left and right. During last year’s open enrollment period, nearly four in ten counties had just one “choice” of insurer.
Democrats propose fixing Obamacare’s problems with an even bigger dose of government. Some 70 House Democrats have joined a new Medicare for All Caucus, which advocates for a complete government takeover of the country’s healthcare system. The leader of that caucus, Rep. Pramila Jayapal, plans to introduce a Medicare for All bill soon. Sen. Bernie Sanders will do the same in the Senate.
If the government can’t manage to provide quality health care to those shopping in the individual market, we shouldn’t expect them to be able to do it for the whole country.
Instead, Congress should pair repeal of Obamacare’s onerous and cost-inflating mandates with something like the Health Care Choices Proposal, which would distribute the money currently spent on Obamacare subsidies and Medicaid expansion as block grants to the states. States could experiment with things like high-risk pools to provide people with pre-existing conditions affordable coverage — without driving up premiums for everyone else.
The nexus of health reform needs to shift from the courtroom to Congress. Divided government may make progress difficult. But with the individual insurance market crumbling, there’s no excuse for inaction.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.