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It looks like the ACA is going to be struck down by the SCOTUS. After being condescended to all year as if we, the Professional left, needed to “understand things on one hand and the Republicans on the other,” the President and the Finance committee merely took it on faith that the Roberts court would see eye to eye with their mandated Democratic health insurance reform bill.

In fact, they were so full of themselves that not only did they think they did not need a public option or Medicare 55+ buy in, they didn’t think they had to put in a severability clause.

Severability clauses are also commonly found in legislation, where they state that if some provisions of the law, or certain applications of those provisions, are found to be unconstitutional, the remaining provisions, or the remaining applications of those provisions, will, nonetheless, continue in force as law. While this merely restates what is generally the law of most jurisdictions, it is nevertheless wise to include such language to make clear the parties' intent that only unimportant non-material provisions may be severed.[1]
That would have saved some of the more positive provisions in the ACA, but because of the absence of that clause, it’s very likely to all be struck down now. And though this diary is not going to be entirely about the Constitutionality of the ACA and the mandate, this is a very good synopsis on all of it by bmaz.

Requiem For ACA at SCOTUS & Legitimacy Of Court and Case

Unlike most of my colleagues, I am not particularly surprised. Indeed, in my argument preview piece, I tried to convey how the challenger’s arguments were far more cognizable than they were being given credit for. The simple fact is the Commerce Clause power claimed by Congress in enacting the individual mandate truly is immense in scope, – every man, woman and child in the United States – and nature – compelled purchase of a product from private corporate interests. Despite all the clucking and tut tutting, there really never has been anything like it before. The Supreme Court Justices thought so too.

I have no idea what kind of blindered hubris led those on the left to believe the Roberts Court was going to be so welcoming to their arguments, and to be as dismissive of the challengers’ arguments, as was the case. Yes, cases such as Raich and Wickard established Congress could regulate interstate commerce and Morrison and Lopez established there were limits to said power. But, no, none of them directly, much less conclusively, established this kind of breathtaking power grant as kosher against every individual in the country.

Despite the grumbling of so many commentators that the law was clear cut, and definitively established in favor of the mandate, it wasn’t, and isn’t. And I was not the only one on the left who found the challenging arguments serious, Professor Jonathan Turley did as well (see here and here).

I also do not think it’s Constitutional to force people to buy insurance from for profit monopolistic corporations. There are a lot of solid Constitutional arguments on that wavelength regardless of where on the political spectrum they may fall. And it really can’t be denied that there really was an embarrassing amount of hubris and overall naiveté on display in how most Democrats thought the Roberts court was going to react to their Republican health insurance reform bill.

They should have known that any bill coming from a Democratic Congress changes its political dynamic completely, especially the so called adult in the room. After excusing everything wrong with it, those like Jonathan Cohn are now forced into attacking the legitimacy of the court over this extremely flawed health care bill they supported to its detriment. This may also be counterproductive as Marcy Wheeler says as well.

ObamaCare SCOTUS Reaction: Why Not Find a Way to Make the Benefits Worth the Price?

I have no idea what Hyder’s income is, but remember that for around 16 to 19% of people affected by the mandate, buying health insurance would only limit, but not eliminate, the possibility of medical bankruptcy, without making health care for serious but not life-threatening problems financially accessible. That chunk of people would not be able to afford to use the insurance for anything more than the guaranteed preventative care and catastrophic care. And yet they would be asked to pay up to 8% of their income for this badly inadequate insurance.


Right: public opinion will be affected in part–as Lemieux acknowledges–by the widespread dislike for the mandate as well as support for other provisions of the law (which, because the Administration is only now getting around to telling people the good parts of the law, many people may only discover were part of ObamaCare if they’re taken away) that they really like.

But it will also be affected by what gets written now. It will partly be affected by what people like Cohn write now.

And not only do I agree with bmaz that responding to a legal setback by attacking the legitimacy of the Court is unwise (I’d add that because the polling on the mandate is so bad, it also risks making people side with SCOTUS over Democrats as a whole on this), I also think there are far better options.

Yes, the mandate is also extremely unpopular with most people and for good reason; the premiums don’t even begin to justify the benefits mostly scheduled for 2014. This date was to balance the budget off the backs of everyone who needed those subsidies to kick in earlier. Yeah you sure showed Republicans with that one, Mr. President. His misunderstanding of politics and the federal budget is one of his biggest flaws.

If only he knew how bad. For instance, let’s look at what has happened in California in the meantime from one of jpmassar’s diaries that should have received more attention.  It shows, among other things, that cumulative premium increases in California from 2002 to today have actually been over 5 times the rate of inflation.

With or Without An 'Affordable' Care Act, Insurers Still Doing What They Do Best - Raising Premiums.

Who could have predicted?
Anthem Blue Cross customer Alison Heath, 56, of San Francisco will get hit with a 19.7 percent increase effective May 1 - her third increase since October 2010, making for a total increase of 66 percent.
It's not that we were completely powerless to prevent this.
California could have passed AB 52, allowing the State Insurance Commissioner to regulate health insurance rates, but the legislature did not. Because insurers are pulling the strings in Sacramento.

California could have passed SB 810, bringing single-payer health care to the Golden State and excising corporate cancers on society like Anthem, but it did not. Because insurers have enough Democrats in their pocket to guarantee a majority against sanity, and Republicans are by definition insane.

It reminds me of those ACA commercials about how this can’t happen anymore. Yes it can. Yes it did.  If what can’t happen, happened, then a lot of promises we were told are going to be met were not going to be in this legislation anyway.

Many who believe Insurance monopolies are going to act right because head of HHS Kathleen Sebelius writes a sternly worded letter are going to be very disappointed. In states that have massive budgetary problems, which include most states these monopolies and their lobbyists operate in, this insurance cartel has the resources to buy state legislatures. This is what they did in California. That shows that the state by state single payer domino effect many hope for may be more of an uphill climb than we initially thought.

I hope we can get it in as many states as possible like the initiatives passed in VT, but it’s not going to be easy. A real national solution to our national health care nightmare should not be taken off the table once we deal with the aftermath of this SCOTUS decision prompted by the mandate just in case.

That reminds me; there have been a lot of myths about the ACA perpetuated here and these need to stop so we can properly concentrate on the next step for real health CARE reform.

  • Myth 1: The ACA paved the way for state single payer initiatives.

    The truth: Any health care system can opt out of the mandate and receive a voucher by 2017 if they meet the requirements. Single payer has nothing to do with the ACA. States were already allowed to create whatever health care system they wanted. This opt out of the mandate was an idea to placate Republican governors upset about the mandate. Well that worked swimmingly, didn’t it?

  • Myth 2: VT now officially has an operational single payer system.

    The truth: Legally they have the backing to do so since it passed their state Congress and was signed into law by their Governor. However, it’s because of the mandate in the ACA that they have to wait until 2017 for their opt out voucher to fully start up their state single payer system.

  • Myth 3: We needed the huge bill called the ACA for the Medicaid expansion.

    The truth: No. It could have been separated and voted on by itself, and would have passed much easier and much quicker than the time caused by the big kerfuffle over this corporate insurance profit mandating bill. This bill was pared off as what both Roosevelts and Harry Truman were trying to accomplish. Wrong again.

  • Myth 4: The ACA begins to solve our prescription drug cartel from bankrupting the sick.

    The truth: Anyone spouting this is spouting garbage and should be ashamed of themselves. I know this personally from what my Mom spends her money on. Not only that, I have the aggregate data so you don’t have to rely on my anecdote alone. The reason drugs are so expensive in this country is because of data exclusivity and patents.  I’ll refer you to the data from “got it right unlike Obama’s Rubinites” economist Dean Baker in his free online book:

    The End of Loser Liberalism: Making Markets Progressive (PDF)

    Patents and copyrights are both explicit government policies to promote innovation and creative work. They reward inventors, musicians, writers and other creative workers with government-enforced monopolies for set periods of time, and these monopolies allow the holders to charge prices far above the free-market price. For example, the nation will spend close to $300 billion in 2011 on prescription drugs.2 In the absence of government-enforced patent monopolies, the same drugs would cost around $30 billion, an amount that implies a transfer to the pharmaceutical industry of close to $270 billion a year, or about 1.8 percent of gross domestic product. It is close to 15 times current federal spending on the main government welfare program, Temporary Assistance for Needy Families (TANF), and it dwarfs the money at stake from a main goal of progressives: eliminating the Bush tax cuts for the wealthy (Figure 1-1).
    Obama’s deal with big pharma lobbyist Billy Tauzin(whom he derided on the campaign) prevented reimportation of drugs from Canada which Byron Dorgan tried to make a reality with his amendment ending this practice which dwarfs even ending the Bush tax cuts(which Obama didn’t do though all he had to do is nothing). Therefore we are transferring 1.8% of GDP to the big pharma cartel while I have to sit here and listen to lies about how the ACA is putting big pharma in check. Seniors on Medicare get slight relief from the donut hole in Medicare Part D but as you can see that’s not really putting much of a dent in the problem overall.
  • Myth 5: People against this bill wanted people to die, wanted to kill the bill out of spite, and didn’t want any good things in it.

    The truth: Even the writers at FDL per the superior analysis of Jon Walker were disappointed but fine with the high risk pools, kids staying on their parents plan till they were 26, and everything else as long as the mandate was taken out. Obviously the mandate wasn’t taken out. Many of you let the President break that campaign promise and even defended him doing so. So guess what? You killed the bill! I hope you’re happy about what you have done to those sick babies.

And now we get to hear a student of famed economist Hyman Minsky(the grandfather of the “got it right” economists of this crisis and its Minsky moment) about the need for health care and not monopolized private for profit health insurance. As a Chartalist in my way of thinking, I am very much on the same wavelength as L. Randall Wray. Marshall Auerback is no slouch on that front either.

Marshall Auerback and Randy Wray: America Needs Healthcare, Not Health Insurance

Using insurers to provide funding is a complex, costly and distorting method of financing healthcare. Imagine sending your weekly grocery bill to an insurance clerk for review and having the grocer reimbursed by the insurer to whom you have been paying “food insurance” premiums—with some of your purchases excluded from coverage at the whim of the insurer. Is there any plausible reason for putting an insurance agent between you and your grocer? No. Then why should an insurer stand between you and your healthcare provider? And why should you be forced to contribute to such an arbitrary scheme?


 “Reform” measures actually promote the status quo by pulling more people into an expensive healthcare system that is managed and funded by insurers. Since two-thirds of household bankruptcies are due to healthcare costs, forcing people to turn over an even larger portion of their income to insurance companies will further erode household finances and exacerbate the problem. This is despite the fact that research by, among others, David U. Himmelstein and Steffie Woolhandler, demonstrates that single-payer reform could save about $380 billion annually that’s currently wasted on insurers’ overhead and the unnecessary paperwork (and screen-work) they inflict on hospitals, doctors and patients.


The reality is that healthcare is not a service that should be funded by insurance companies. An individual should insure against expensive and undesirable calamities: tornadoes, fires, auto accidents. These need to be insurable risks, or insurance will not be made available. This means the events need to be reasonably random and relatively rare, with calculable probabilities that do not change much over time. We need to make sure that the existence of insurance does not increase the probability of insured losses. This is why we are not allowed to insure our neighbor’s house.

Insurance works by using the premiums paid in by all of the insured to cover the losses that infrequently visit a small subset of them. Of course, insurance always turns out to be a bad deal for almost all of the insured—the return is hugely negative because most of the insured never collect benefits. The insurance company’s operating costs and profit margins are more or less equal to the net losses suffered by its policyholders.


Given today’s political constraints, perhaps a full “single-payer” option might not be feasible, but one earlier variant of the proposed healthcare legislation did feature a Medicare buy-in. In effect, if the Supreme Court does strike down the major provisions of the Obama healthcare plan, Congress could easily use Senate reconciliation and expand Medicare via the Senate’s buy-in provisions (the House can approve this on the basis of a simple majority vote). The Congressional Budget Office has already signed off on this as a means of saving money (“budget savings” is in some respects a nonsensical concept, but it provides the necessary political cover to deploy what is essentially a budgetary procedure).

Randy Wray once again is right about the problem and the solution. A Medicare Buy In is still a feasible goal given the popularity of Medicare. The fact that it has been scored by the CBO already saving it from the Senate parliamentarian is significant if one knows how or why reconciliation could be used.

That is, unless Democrats stop it from being used for something that is actually health CARE reform like Senator Dick Durbin did last time. States should also keep pursuing the single payer model if the ACA goes down (and they will then be free to do so). Our states, looking at Wisconsin to Ohio, are a lot more corrupt than Canada’s provinces so our route to Medicare for All may be different.

That is why we must keep pressuring for a national health CARE solution as well. We need a national health care solution, because market solutions not only do not work in the long run, they are flawed in the initial design.  For instance, is health care bought on a market?

Not really. Health care is a term covering a class of goods and services; an enormously diverse class adapted to the specific health condition of each patient. We’re all snowflakes on some level; therefore you can’t just go to a vending machine for what ails you.

During this debate there were some on this site and elsewhere that were insurance actuaries deluding people into thinking we just haven’t found the right market based solution yet. I guess since health care jobs are a big growing sector along with our inefficient expenditures some would try to defend them for their own self preservation, even though in our country they are parasitic jobs feeding on people and businesses.

The problem with those health care delusions is that if you draw a supply and demand diagram, there is no quantity to put on the horizontal axis and no price to put on the vertical axis.  Actual health care is not a commodity bought and sold on an open market. Health care is a one on one discussion between medical professionals following the norms and standards with a patient.

That’s nuanced and can’t be diagramed out for the market. Health care is already an information asymmetric sector with a very limited ability of patients to discern the recommendations or any alternatives. The issue for each patient is finding the doctor that best represents the empirically researched judgments of the profession at large. It can be discerning to find the right combination of these factors depending on whatever ails you, anyway.

What’s worse is how our health insurance monopoly operates now; decisions about quality, character, organizational decisions, and decisions about pricing do not flow from a negotiation between patient and doctor. Those negotiations are between providers, monopolistic insurance companies, and the rates Medicare is able to set in order to tame the twisted market incentives pushing costly drugs, medical equipment, and procedures into the equation.

There’s no real market in health care therefore there can be no market based solution. Market forces being somehow deployed more efficiently to somehow regulate prices don’t exist in any significant way. That kind of speak is only for politicians whom are the insurance, big pharma, and costly private hospital lobbies’ lackeys and they let their paymasters write the legislation for so called market based health care which doesn't truly exist.

Enough of this shit. Let’s acknowledge reality and fight for a national health care solution.

Anyway, if you like what I have to say on this issue and others, I could use your vote in Round 2 for the DFA Netroots Nation scholarship contest. Your votes don't roll over so if you could check to see if you voted for me in Round 2, I would appreciate it. Thank you very much, kossacks!

Originally posted to The Amateur Left on Thu Apr 05, 2012 at 08:03 AM PDT.

Also republished by The Democratic Wing of the Democratic Party and Progressive Policy Zone.

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