Thursday, June 28, 2012

Did John Roberts actually just kill the Affordable Care Act?

Although I have a Scripps Howard column coming out soon that suggests otherwise, I think it's possible that Chief Justice John Roberts decided to kill the Affordable Care Act today--not with the beheading that everybody was expecting, but with a slow-acting poison.

Consider this.

One of the big things the Affordable Care Act does is make it nearly impossible for insurance companies to deny coverage for pre-existing conditions. That removed a big obstacle for many people obtaining insurance, but it also created a problem--burdening those companies with huge medical costs that they were otherwise avoiding. The individual mandate was intended to solve that problem by sending lots of healthy people (and their cash) to the insurance companies, allowing the insurers to still make money.

By reframing the mandate as a tax, though, Roberts may have found the mechanism that blows the house of cards apart. Here he is, delivering the majority opinion:
Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. ... We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.
First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance.
Now. I doubt Republicans would mount a campaign to get everybody to pay the tax and avoid health insurance in order to undermine the purposes of he Affordable Care Act. But if the mandate is now framed in the popular mind as a "cheap tax I can pay" instead of a "rule that I must follow," it's possible that many young, poorly paid people will opt to pay the tax--and that insurance companies will drown over time as a result.

UPDATE: Ezra Klein is thinking along similar lines.

1 comment:

Rick Henderson said...

It's an interesting point, Joel, but I don't think Roberts intended to destroy the ACA. It is a terribly cobbled together mess of public policy, and the CJ chose -- correctly -- not to become a policy wonk and save the writers of ACA from themselves.