Today's Historic Supreme Court Decision . . . And What I Think About ObamaCare

I'm copying and pasting an email I sent to my parents earlier today.  I know they don't have time to read SCOTUS's opinion on the Affordable Care Act today and if they did, they wouldn't understand most of it, so in all my spare time today, I read the entire 193 page opinion, summarized it, and added my own thoughts.  I'm posting it here, but I'm warning you it is very long, so feel free to read only important sections.  I do ask, though, that you read the last section which is the most important. 

Remember, this is copied and pasted from my email:

After the heated discussions and remarks on both my facebook and twitter pages this morning, I decided to turn those off for the day and figure this out for myself.  I have spent the majority of my day reading the 193 page opinion issued this morning by the Supreme Court on the Affordable Care Act (a/k/a ObamaCare).  I am sending my thoughts (and please read that as clearly and uniquely MY thoughts) because I thought you may be interested and without the time to read through 193 pages of legal jargon to figure it out for yourself.  Now, with that said, please realize I (1) have not looked at any news source other than two little, tiny one sentence blurbs this morning (one telling me the individual mandate had been struck down and the other telling me the entire thing had been upheld – one obviously incorrect and changed nearly immediately and the other also incorrect); (2) I do not know everything about the ACA nor do I claim to know everything about it; and (3) I am not ‘requiring’ you to read this and have no consequences in mind for you if you don’t (I’m trying to make a joke in relation to the upheld individual mandate).  Now, this is incredibly long and you may not want to read the entire thing, and if not, that’s okay, but I encourage you to read the BOTTOM if you read nothing else.

To start, I’m just going to tell you about the opinion and basically what was decided and why and I’m going to try to do so briefly.  Two main issues were presented for the Court to determine their constitutionality:  (1) the individual mandate requiring most Americans to have health insurance and (2) the Medicaid expansion.

Individual Mandate

The mandate would require most Americans to purchase at least the minimum ‘essential’ health coverage or pay a ‘shared responsibility penalty’ when paying his or her taxes.  The Government has said since first discussions of this Act that this ‘penalty’ was not a tax but that Congress could levy it under the Commerce Clause.  For those of you who don’t know, the Commerce Clause is one of the broadest and most expansive reaching tools of Congress and they use it for nearly everything – including this penalty.  The Court says, however, this payment is not allowed under the Commerce Clause because that clause allows Congress to regulate commerce (which, again, is incredibly expansive) but for Congress to regulate something, something has to be in existence to be regulated.  This mandate does not regulate existing commerce activity, but it compels someone who is inactive (someone not purchasing insurance so someone not doing anything) to become active and Congress can’t do that (duh or we’d probably have to do crazy things – buy vegetables instead of cookies to combat obesity, etc.).

The Government probably had an idea this would be the case, so they argued, in the alternative, that the mandate was actually under Congress’ power to tax.  Now, let me be clear, Obama has said over and over and over that this was “not a tax” but the Government had to rely on that argument after his original claim fell incredibly short.  The way Chief Justice Roberts wrote the opinion made clear that as the High Court, they have a duty to look at all options.  He said, “if a statute has two possible meanings, one of which violates the Constitution [and the other not], courts should adopt the meaning that does not do so” instead of just throwing the whole thing out.  He’s right and I agree.  He said that even though the ACA labels the payment a “penalty,” it is actually a tax because it is not the label that matters but the substance and application of the payment.  I guess the saying goes “if it looks like a duck and sounds like a duck, it probably is a duck” applies here.  The payment is like a tax because (1) it doesn’t apply to people not filing federal income tax because their income is below the filing threshold; (2) it produces some revenue for the Government; and (3) for taxpayers who do pay taxes, the amount paid is determined by the ‘regular’ factors such as taxable income, number of dependents, filing status, etc.  The opinion also goes into the reasons why it is UNlike a penalty:  (1) the amount to be paid will always be less than the price of insurance; (2) there’s no scienter requirement – no bad faith or guilty mind on the part of the person having to pay the penalty; and (3) the payment is collected through normal means of taxation except it is not allowed to use punitive sanctions against it or the person paying/not paying.  Finally, it is okay for this payment to be a tax because it is okay for the government to issue taxes designed to influence conduct (think liquor taxes or taxes on cigarettes – both done to try to keep people from purchasing those items).

Hopefully, this explains the portion of the opinion over which most people are outraged.  The dissent brought up good points, too; however, I honestly agree with Roberts and think the penalty is not a penalty but a tax.

Medicaid Expansion

Now, much more concisely, the issue of Medicaid expansion . . .   Every state has a Medicaid program and each state receives funds from the federal government to help support the program.  Under old law (as this is the current law and was, in part, upheld), the states’ Medicaid programs were required to cover 4 certain categories of needy people.  Under the ACA’s expansion, the federal government is requiring states to expand their coverage from these limited groups to cover all individuals under 65 with income levels below a certain percentage (133%) of the federal poverty line.  (One person would qualify if his income was below around $15,000 and a family of four would qualify if their income was below around $30,000).  Also, the states will have to provide a health benefits package to these Medicaid recipients that would meet the requirements of the individual mandate.  Along with these new changes – this ‘expansion’ – the federal government would provide new money and help pay costs of the states (the feds will pay 100% of costs for covering new individuals through 2016 and then the percentage of their financial backing goes down gradually).  However, the issue comes because the federal government was trying to require the states to expand their Medicaid coverage and if the states did not do so, the federal government was threatening to take away ALL of its funding to that particular state for Medicaid.  So, not only would the feds take away this new, additional money helping to cover newly eligible individuals, but they were going to take away any and all money provided to help pay for the current Medicaid recipients.  This would be HUGE to a state who did not think it could afford the new expanded Medicaid (because, again, this covers MANY more people and the states will see the costs themselves after 2016) and didn’t want to participate in the expansion.  It’s basically a threat – no real choice for the states.

This is how the Court saw it, too.  The Court said there is a difference between incentives and compulsion and the ACA was not providing incentives but actually compelling the States to participate in the expansion.  Even though the federal government can condition receipt of federal funds on the states’ complying with the conditions or restrictions on the use of the funds, the federal government cannot condition the funds on the use of other funds.  Roberts called this ‘inducement’ by the federal government “a gun to the head” and said no, they can’t do that.  He did say the federal government can not give the new funds if the state chooses not to expand its Medicaid program, but the federal government can NOT take away (or penalize) the funds already being given for the current Medicaid programs.

Act As a Whole

The majority opinion upheld the Act as a whole.  Though they struck down the one part of the Medicaid expansion (this is why I said both news sources I read were wrong), the Court held that the remedy to that is to not take away existing funds for a state opting out of the expansion and that that covered the inapplicability of the Act.  Therefore, the Court upheld the Act in its entirety.

Other Thoughts on the ACA

Let me reiterate, I do not know everything about the ACA, but from what I do know and understand, I do not think this is the best way for health care reform in our country.  I believe a lot of people are looking at this very short-sighted and are seeing what seem to be benefits but I believe in the long run, this will hurt us greatly.

One point of the ACA is that it allows dependents to be insured on their parents’ coverage up until the age of 26.  I went off of my parents’ coverage when I was 22 and I will be honest, for a while, I went without health insurance because I could not afford it nor could find a plan I felt worked for me at a reasonable cost.  I eventually did find something and became insured on my own.  With the average amount of time spent in college increasing and with the job market so low for several fields, this is probably a good point for many families.

Now, costs – baaaadddd. 

First, from my understanding, in many states, the prescription drug rebates offered by the state will be greatly reduced.  This means we will be paying more for our prescriptions and will not be receiving incentives or rebates as we are now.

Second, there will be an increase in state program costs.  Obviously, with this broad expansion of Medicaid (especially in states that will be hit hard with lower average incomes such as Alabama and Mississippi) and the new costs to provide these health insurance benefits packages to all of these newly covered individuals, the cost of Medicaid will greatly increase.  Although the federal government will pay 100% of these costs until 2016, the states (and US because from where does the federal government get its money???!!!) will still see the impact of these costs.  On average, the federal government only pays about 60 cents on the dollar of Medicaid costs with the state having to pick up the rest.  Where does that leave the state?  With more costs than it has even now.

Also, with this individual mandate and expansion of Medicaid, the federal government’s funds will be going elsewhere so it is predicted that state hospitals – especially those in areas seeing a lot of the persons covered by Medicaid or uninsured – will receive a huge hit in state funding.  With the reduction of funding to these hospitals, they will close, lose services and providers, or raise costs on their own (depending on the circumstances and funding levels).  That’s bad for us and especially for those of us who are in states with lower initial income averages.

Fourth, the expansion of Medicaid still leaves several people out.  There will still be a huge group of people who are not eligible for Medicaid but who cannot afford health coverage (even though it is supposed to be affordable for all).  Instead, these people will opt to pay the ‘tax’ for not having insurance.  So, what happens when they get sick?  We’re already paying for the Medicaid expansion, for our own healthcare costs, so what about these uninsureds?

Finally, I work for a health care services provider.  I see the impact here in my office and the worries that have arisen.  The ACA requires each state to create a health care exchange by 2014 (or the feds will come in and do it for you).  To date, 13 states have created their exchanges.  These exchanges are to exist to control and maintain health care in each state.  Individuals will purchase health care through the exchange so that means the exchange gets to determine which plans (or carriers) are allowed to be bought.  This (1) limits the choice and freedom of the individual as we are directed to which plans we can purchase and (2) could negatively impact insurance carriers – as well as place new fees and fines on these carriers in order to meet Exchange guidelines.  Sure, there is an argument that these exchanges will help keep the costs of health care coverage down, but, at the same time, what’s the real cost of doing that (if that even happens)??

  

Closing Points (and the VERY MOST IMPORTANT PART OF MY “NOVELLA”)

As much as Roberts’ opinion has upset so many people in our nation, I truly believe he was being honorable and doing what he felt his duty was – interpreting the law.  If you remember, Roberts was appointed by Bush, so he should be a ‘conservative’ justice.  A lot of people are bashing Roberts right now for his opinion and because, more than likely, he was the deciding vote (it was a 5-4 opinion).  Even though his opinion upholds the ACA, I believe he slipped in some of his own ‘advice,’ ‘recommendations,’ and ‘reminders.’  In his opinion, he says, “Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments.  Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them.  It is not our job to protect the people from the consequences of their political choices.”  Tell me what you think, but I think that was (1) a jab at Obama and (2) an encouragement to Americans to spread awareness of Obama’s policies and (3) an encouragement to vote differently come November.

So, as I (finally) close this email, I encourage you to do just that.  Today may have been a “victory for Barack Obama” (according to msn.com), but let’s make it a victory for us in the long run.  We need to take this and use it to do what we can to get him out of office.  A lot of people are upset over this.  Spread the news – make people aware of the consequences of ObamaCare (and that Obama is NOT doing a good job and he is continuously going against his own word – like how this is not a tax and he won’t raise taxes and the Court just said it was, in fact, a tax).  Romney may not have been your ideal candidate, but it is time to quit being wishy washy and back him now. 

Please let me know if you have any questions or more concerns about today’s SCOTUS decision and its impact on you and your family.  I’ll try the best I can to answer!

ROMNEY 2012!!!