10/08/2011

Can SCOTUS save Obama?

There has been much speculation as to why the Obama Administration suddenly changed course on Obamacare. Despite the conventional thinking that the administration would delay and "slow walk" court cases through the judicial process, which they had been doing, they reversed course and chose not to appeal the three judge panels ruling to the entire Eleventh Circuit that the mandate is unconstitutional. In addition they joined with the states and parties who brought the suit in asking the Supreme Court to rule on the case which almost assures that it will do so some time early next summer, right at the beginning of the general election campaign.

I have my own explanation for this which I have not heard anyone yet put forth, but first we must understand a couple key points.

The first point is that unlike the ruling Judge Vinson made which said that not only was the individual  mandate  unconstitutional, without the mandate the law itself was in affect void because there was no severability clause written into it and that without the mandate the law itself is unworkable.. The 11th Circuit panel did not rule that the whole law (Obamacare) was  void as Judge Vinson had, but rather only the individual mandate was was unconstitutional.

This is key to what I am about to present. Remember the ruling now in affect by the 11th Circuit Court is that the mandate is unconstitutional but the rest of  the law is still valid. In affect the panel did what congress did not do, they severed the mandate from the law but left the law in place.

Why is this important ?

Well it goes back to why there had to be a mandate in the first place. Most of us who oppose Obamacare do so because of the individual mandate which we find an affront to our liberties which it most assuredly is, but the reason for the mandate are more practical. Obmacare did not eliminate private insurance though that is the hoped for ultimate outcome, but what it did do is dictate to insurance companies certain coverage mandates which they must follow which is as  egregious an affront to liberty as the individual mandate but less popularly opposed. In fact these coverage mandates are quite popular with the public even if unworkable without the individual mandate. These coverage mandates such as covering preexisting conditions, covering children until they are twenty-six and a host of others written into the law and others being regulated into the law through Health and Human Services would break the insurance companies without the individual mandate requiring all Americans to have insurance which pays for it.

The scenario of the law without the individual mandate but with the other provisions still in place has been referred to as a "death spiral" for the insurance industry. Philip Klein in the American Spectator explained back in 2010 when the Vinson ruling first came out.

It's long been accepted as a given in health care policy circles that if the government is going to force insurers to offer coverage to those with pre-existing conditions, they're also going to have to require that everybody purchase insurance. Without a mandate, you end up with the infamous "death spiral" -- healthy people forgo purchasing coverage because they know they can wait until they get sick, leaving insurers with sicker beneficiaries, which drives up premiums and causes more healthy people to exit the market, and so on.

Which brings us back to the administration's decision to expedite a Supreme Court ruling on Obamacare. Remember where we stand now is that the individual mandate has been ruled unconstitutional but the rest of the law still stands. If the individual mandate is ruled Constitutional by SCOTUS, then Obama wins the political battle and the fight becomes about just repealing Obamacare, a fight I might add that Mitt Romney would be at a severe disadvantage in compared to the other candidates. Most people had expected that this would be the political battle going into the 2012 elections if the Supreme Court had not ruled anyway which is why everyone expected Obama to "slow walk" the legal battle.

Now however we have the likelihood that the Supreme Court will rule come next June and there is a very real  possibility, that SCOTUS upholds the Eleventh Circuit's ruling and finds the individual mandate unconstitutional but leaves the rest of the law for the other two branches to figure out. Although this might appear to be a severe loss to the Administration it might not be so bad, in fact it could be a game changer in Obama's favor in several ways.

Most observers particularly on the right believe that the threat of Obamacare is a severe drag on the economy. Many have said that a repeal of Obamacare  would have a stimulative affect on the economy. People and businesses would initially react very positively to the ruling believing that an unnecessary and huge regulatory burden was about to be lifted from the American economy. I suspect that if the individual mandate were ruled unconstitutional the immediate affect would be a strong surge in consumer and business confidences which could even generate an uptick in America's economy. This of course would occur in the summer of 2012 most likely after the Republican candidate is already known.

A ruling overturning the individual mandate without voiding the entire law would in reality be disastrous, creating the "death spiral" situation explained above. This situation is well understood by policy makers but far less understood by the general public and would take some time to sink in. The Republican candidate would have to explain this to the public and Obama could correctly though cynically say that he had been opposed to the individual mandate but was forced to accept it in order to pay for all the "good things" in Obamacare such as the not yet in affect preexisting condition coverage and the already in place twenty six year old children rule. The "good things" that the nasty Republicans want to eliminate with their calls for repeal of the rest of the law, the rest of the law that the general public likes.

So it is very possible that a ruling that kills the individual mandate but does not void the law could work to Obama's advantage on a couple of levels. It could create a brief surge in economic confidence or even growth going into the heart of the political season and it could give Obama a very potent issue to run on. Now that the odious individual mandate is off the table only I, Obama can claim, can save the benefits of the law America wants from the evil clutches of the Republicans who want to take them away from you.

The fact that the only way that this can be accomplished is by a total government take over of the nations health care with a single payer system, which is what he wants anyway, is secondary. the argument will be to save the anticipated benefits of Obamacare from being taken away. As it is now it will be very difficult for the Republican candidate to argue against the 26 year old child rule since many Americans are already benefiting by it, even though other Americans are paying  for it in higher premiums on their policies.

The hope is that the Supreme Court will rule the individual mandate unconstitutional (at minimum) and void the entire law, but I think this is doubtful. More  likely they will hold with the 11th circuit's recent ruling and leave it up to Congress to fix the mess they created. If they do then I can see Obama using it to not only to rally his base to save or even, in their eyes, improve Obamacare, but to use it as a sledgehammer to beat the Republican candidate with. If that candidate is Romney, it could be a very effective tool indeed.

Perhaps this is why they chose to speed up the process.

"Vote for Obama-Biden and every American's healthcare will be covered -the Republican's will take that away"

No comments:

Post a Comment