To Be or Not to Be

A couple of my favorite Council executives had a recent email exchange on the Supreme Court’s consideration of the Affordable Care Act. “Hearing a fairly credible rumor that the individual mandate is likely to be overturned,” one wrote. “Have you given much thought to the implications if that were true? Sure would be interested in your insight.”

The response: “The immediate implication of that is me, running through the halls of our office, draped in an American flag, singing ‘God Bless America.’”

I suspect many, if not an overwhelming majority, of Council executives feel the same. And I do as well, up to a point. I think the 2,700-page healthcare reform law is fatally flawed and will lead the country down a path toward complete government-run healthcare. I think it’s monstrously, disastrously, unsustainably expensive—much more so than any Congressional Budget Office estimate—and I think it should be junked so that Congress can declare a do-over.

Even without it, we may be bankrupt soon. With it, our fiscal condition will begin to resemble that of Greece, and fast. If the Supreme Court (more specifically, if Justice Anthony Kennedy) were to rule the individual mandate—or, better yet, the entire act—unconstitutional, I would be the first to pop the cork on the champagne.

Before the oral arguments, most constitutional scholars believed there was little chance that the court would strike down the entire law, as did a Florida appeals court. More likely, the thinking has gone, if the justices don’t uphold the act entirely, they would declare the individual mandate unconstitutional.

To widespread surprise, the justices didn’t seem to like the idea of having to parse the constitutionality of specific provisions. Justice Ruth Bader Ginsburg called it “a choice between a wrecking operation and a salvage job.” A majority expressed opposition to the salvage job. All of that is interesting, but oral arguments do not always foretell big Supreme Court decisions.

If the individual mandate is ruled unconstitutional, it could potentially make matters worse, not better. Even the Obama administration has said that, if the court strikes it down, provisions regarding guaranteed issue and community rating must go as well. Otherwise, it’s an adverse selection nightmare. But that’s as far as the administration—and perhaps the Court—would go. The rest of the architecture of the act—the exchanges, the subsidies, the minimum loss ratio, the Medicaid provisions, the accountable care organizations, the co-ops, you name it—would remain intact. And if Obama is reelected, he will do everything possible to put them into effect.

Even if community rating and guaranteed issue fall, countless provisions in the law aim to put the boot of the federal government on the neck of health plans. Does anyone really believe that an Obama administration’s Department of Health and Human Services won’t continue to demagogue “wildly excessive” increases in health insurance costs?

The curiosity here is that one of the biggest champions of mandates over the years has been the insurance industry, for fairly obvious reasons. Resolving the problem of 42 million uninsured Americans cannot be done without employer and individual mandates. The Affordable Care Act goofed it all up by creating penalties that are nowhere near the cost of insurance itself—and the act doesn’t bend the healthcare cost curve.

Who could have known that what emerged from Congress would be a product based on the demonization of health insurance plans? If the mandate is eliminated but the architecture of the act is not, insurers will be the whipping boys of Democrats for years to come, or at least until the collapse of the employer-provided group health insurance marketplace leads to a comprehensive “public option” that eviscerates the private market.

It’s trickier still to evaluate the political consequences of the Supreme Court decision. In a March Wall Street Journal op-ed, Karl Rove wrote, “The mess that is Obamacare is not going away. The president’s handling of it will deeply affect his re-election chances.”

Political analyst Charlie Cook, writing in The National Journal, disagrees. “The health care law has already been fully litigated in the court of public opinion, with a split and very close decision: A plurality think it and the individual mandate were bad, a handful of points ahead of those who approved of both,” Cook wrote. “Attitudes toward Obama’s health care law are already baked into the cake of how people perceive Obama himself, his performance, and whether he should be reelected.”

Cook sounds about right. If you love President Obama, you probably love his healthcare reform law. And if you don’t like him, you don’t like the law. The Supreme Court decision probably won’t change that. But it could change the entire world for those of us involved in the delivery of health insurance to tens of millions of Americans.