A very splintered Supreme Court has upheld Obamacare, almost in its entirety. One small provision — which would have allowed the feds to withdraw the funding they give states for their Medicaid programs if they declined to expand them — was rejected.
Other than that, the court effectively gave the green light to the president’s attempt to destroy the country’s healthcare marketplace.
Perhaps the biggest shock was that Chief Justice John Roberts — who was appointed to the high court by Republican President George W. Bush — wrote the majority opinion, siding with the four liberal justices who were expected to support the law.
The ruling is a victory for the Obama administration. But it’s not a complete defeat for those who value limited government. A majority of voters still oppose Obamacare — and have since it became law. Current and would-be lawmakers can capitalize on that disdain by articulating a workable, effective alternative for reforming our healthcare system.
The Obama administration may have gotten the result it wanted — affirmation of the constitutionality of the individual mandate — but not for the reason it hoped. Roberts and company said that the mandate was constitutional under Congress’s power to tax, not its power to regulate interstate commerce.
To paraphrase Vice President Joe Biden, that’s a big, uh, deal. By declining to affirm the mandate under the Commerce Clause, the high court effectively prohibits Congress from forcing Americans to engage in commerce just so lawmakers can regulate it.
Further, by upholding the mandate under Congress’s taxation power, the justices have caused the president to impose the biggest tax increase on the middle class in American history.
You may recall that while promoting his healthcare monstrosity, President Obama engaged in verbal gymnastics to avoid calling the charge levied by the government for failing to secure coverage a “tax.” Indeed, he promised that “no family making less than $250,000 a year will see any form of tax increase.”
So the president is now charged with defending a law that’s opposed by a majority of the population — and that breaks his no-tax pledge.
A second victory for limited government was the court’s rejection of Obamacare’s forced expansion of Medicaid, the healthcare program for low-income Americans jointly financed by the feds and the states.
About half of the 30 million people who were set to gain insurance coverage through Obamacare would have done so through Medicaid. Many still will, as the federal government will absorb most of the cost. But now states can decide for themselves whether to swell their Medicaid rolls as the law intends — without fear of losing their existing federal funding for the program.
Federal Medicaid funding comprises 10 percent of states’ budgets. Threatening to take all that away as a penalty for not expanding the program amounted to “economic dragooning,” as the chief justice put it, and was therefore “unduly coercive” to the states.
So federal power does know at least some limits.
Given the sustained public unrest surrounding the law, voters may ask Congress to re-establish some of those limits this fall. The simple truth is that America cannot afford Obamacare — its constitutionality notwithstanding.
The Affordable Care Act will add between $346 billion and $527 billion to the federal deficit over the next decade. And it’s set to increase national health spending by $311 billion through 2020 — when such spending will consume $4.6 trillion, or one-fifth of the American economy.
Lawmakers will have to rein that in — or the country will go bankrupt. The best way to do so? By repealing Obamacare and implementing reforms that harness the power of competition to lower costs and improve access to affordable health coverage.
The feds can start by increasing the availability of high-deductible plans coupled with health savings accounts (HSA), where patients can save pre-tax dollars for health services. This approach empowers patients to decide how to spend their healthcare dollars. As a result, healthcare providers have to compete for patients’ business. Expanding such competitive forces would help rein in costs.
Federal lawmakers must also reform the way they tax health benefits. Right now, people who get their health insurance through work do not pay income tax on the value of their benefits. By contrast, individuals who buy insurance on their own must use after-tax dollars to do so. So they miss out on a substantial tax benefit.
Legislators should eliminate this discrepancy. Doing so would grant individuals — rather than employers — control over their health benefits. And it would free people up to seek employment opportunities they actually want — rather than simply those that offer health benefits.
The Supreme Court may have rendered its verdict on Obamacare, but the law is still years from fully taking root. This fall, voters can instruct Congress and the president to throw out the Affordable Care Act and replace it with reforms that put patients — not government — first.
Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is The Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare (Regnery 2012).