June 30th, 2012
Chief Justice John Roberts did right by America. Thursday’s ruling by the U.S. Supreme Court upheld the constitutionality of the law’s minimum coverage provision and allowed the Affordable Care Act to move forward. Health reform is often simpler than it looks, and so was the Court’s decision. In practical terms, a majority of Justices ruled that individuals, states, and the federal government must work together, voluntarily, to make the Act’s framework effective or else must decide – democratically – to pursue a different course.
The decision’s release had an odd dynamic, though only the Justices and their clerks know the back-story. In addition to the Chief, Justices Ginsburg and Kennedy read summaries of their views in open court. Justice Kennedy read from an opinion authored jointly with Scalia, Thomas, and Alito (rather than the other justices joining an opinion that he wrote) in which the four metaphorically linked arms and spoke with one voice to curtail the expansion of domestic federal power by striking down the ACA in its entirety. It was a tour-de-force of uncompromising conservative jurisprudence with the tone of a majority opinion, even referring repeatedly to the liberal view as “Justice Ginsburg’s dissent.”
There was only one problem: the crucial fifth vote, belonging to their ideological as well as organizational chief, had abandoned them, and their manifesto, not Justice Ginsburg’s opinion, had been labeled a dissent. Somehow, the winners had lost and the losers had won.
The Constitution Is Not A Suicide Pact
Where was the Chief Justice? He wrote first but separately, in a clearly stated, cleverly reasoned opinion that largely represents his own thoughts even though it is easy to mistake for a majority view. At the same time, it ties together the necessary votes supporting the minimum coverage provisions as an exercise of Congress’s power to tax, and it approves the ACA’s Medicaid expansion so long as HHS does not threaten to withhold existing Medicaid funding from states that choose not to participate.
By declaring limits to central authority under the Spending Clause (a true holding of the case) and the Commerce Clause (a strong indication of the majority view), the opinion remains true to Roberts’ Federalist Society principles. But it also preserves the remarkable achievement of the ACA in attempting to address a critical and longstanding issue of domestic policy in a republican system of government based on checks and balances against the long odds of the current political climate.
The unacceptable alternative, embraced by the four dissenters, was to celebrate partisan strife and legislative stalemate. The dissent mocks Justice Ginsburg’s invocation of national need to justify comprehensive federal intervention in health care, asserting that the Constitution allows Congress a limited toolkit of permissible methods rather than a blanket authorization in selected areas. No federal power to solve undeniably serious problems of clearly national dimensions? That would be unexpected and unwelcome news to most Americans.
Nor would the dissent have left a single pillar of the 900-page ACA standing once the mandate and Medicaid expansion had been toppled, on the grounds that none of the law met its standards for severability. If every contested piece of major legislation can be erased undemocratically by the courts, government is stuck on square one. It is small wonder that the Chief Justice resisted defining the Roberts Court as a judicial version of the movie “Groundhog Day.”
Taxes And Health Reform
Tracing the legitimacy of the ACA to Congress’s power to tax was the biggest surprise to constitutional lawyers in the Court’s opinion. During legislative debate, proponents uniformly described the law’s centerpiece as a mandate on individuals not covered by Medicare or Medicaid to purchase private health insurance, and the text of the law states repeatedly that failure to obtain such coverage triggers a penalty payment. The word “tax” was scrupulously avoided. As a result, only one lower court judge had upheld the law under the tax power, and the claim was not heavily emphasized in the briefs or oral arguments before the Supreme Court. Yet the Chief Justice concluded that lawmakers’ self-assigned labels were not dispositive, and that a law supportable on any constitutional grounds should be upheld.
Reframing the mandate as a tax on the voluntarily uninsured has a welcome honesty in health policy terms, even if it leaves opponents of the ACA fuming over judicial activism. It was always clearly constitutional for Congress to tax Americans the cost of health insurance and then voucher it back to them as universal coverage. Such explicit “single-payer” proposals are politically risky, however, because they convert very large amounts of existing private spending on health insurance into massive tax increases.
In addition to maintaining familiar sources of coverage and appeasing the powerful insurance lobby, mandates for private purchase are intended to finesse this tax treatment of health reform. The Chief Justice’s decision to unmask this fiction is neither unreasonable nor unprecedented. In 1994, the Congressional Budget Office killed the Clinton administration’s reform proposal when it determined that money spent to satisfy an employer mandate should be counted as a tax increase – even if similar coverage had previously been purchased voluntarily.
A more surprising tax-related claim is the four-justice dissent’s belief that Medicaid and other large-scale transfers of federal dollars to states may be coercive because such programs are ultimately funded through taxation and individual states would be loath to decline benefits when their citizens were already suffering burdens. It seems more likely that the Constitution empowers the national government to tax and to spend specifically to solve collective action problems of this sort at the state level, reducing the risks associated with first-movers, free-riders, and hold-outs.
Moreover, particularly in the U.S. Senate, states are far from powerless to influence the politics of federal taxation. The opinion of the Court conveyed by the Chief Justice gives taxation the latitude necessary for it to address national problems not within other enumerated powers, and cabins the analysis of coercion to withholding existing benefits from the states rather than offering them additional ones.
The Delivery System, Stupid
At its heart, health reform must solve two major problems of health system performance. First, it must dramatically improve the value proposition of health care delivery, controlling prices and costs and assuring quality and safety. Second, it must move the preservation and restoration of health significantly upstream, redesigning communities and redeveloping the workforce to discourage unhealthy activities, reinforce healthy ones, and serve the sick and elderly where they live. The Supreme Court’s decision declares these tasks to be a joint project of federal and state governments, making them harder to initiate but probably more likely to succeed.
Medicaid is the critical test of health system performance. After the Court’s ruling, states fearing the long-term fiscal consequences of the Medicaid expansion can more easily decline to participate in it, significantly reducing the ACA’s ability to cover those not currently insured and to address shameful disparities in access to health care. The surest way to avoid this outcome is to get serious about delivery system reform.
Provider payment innovations, medical homes, accountable care organizations and the like are all worthy endeavors, but a blunter criterion for success would be to deliver effective medical care for a price that state Medicaid programs are able to pay. The ACA provides generous federal support for Medicaid to transition from today’s wasteful delivery system to tomorrow’s efficient one. But states must be persuaded that the Medicaid expansion is not an existential threat, but rather a once-in-a-generation opportunity to forestall one.
Under the Court’s reasoning, states also become integral partners in individual and population health. The federal government can tax the failure to eat well or to exercise, but it cannot require them. Those measures can only be adopted by states using their plenary police powers, assuming that they have sufficient incentive and political will to do so. To be sure, Chief Justice Roberts’ disclaimer of federal power to require broccoli consumption was somewhat facile – regulation of consumer products to promote health and safety routinely occurs under federal law without offending the Commerce Clause. Still, working primarily at state and local levels is sound practical advice for public health advocates.
Obama The Education President
Most of all, the Supreme Court reminded us of something we already knew: Health reform requires cooperation. States must decide to accept generous federal support, launch insurance exchanges, and expand their Medicaid programs to cover a broad group of low-income Americans. Individuals must decide that it is in their interest to purchase coverage rather than pay the relatively modest tax that, following the Court’s reasoning, is the sole sanction the ACA imposes on those who remain voluntarily uninsured. And the federal government must work with states and individuals to allay their concerns, reduce their burdens, and meet their expectations.
The key to achieving this is education. Emotions run strong over “Obamacare,” and some on both sides may be unteachable. But from the moment of the law’s passage to the present day, the Administration and its congressional allies have failed utterly to help Americans understand what the Affordable Care Act does, what it refrains from doing, and why they should support it.
At his confirmation hearing to become chief justice, John Roberts promised to let the democratically accountable branches of government do as they saw fit within the generous limits set by the Constitution. This week, he made good on that promise. In his campaign to become president, Barack Obama promised to serve all Americans, whether they were his supporters or his critics. Health reform challenges him to do just that. The Affordable Care Act is not a self-evident truth. It has to be explained.Email This Post Print This Post