Major health care update

One Judge has declared the individual mandate unconstitutional.

Recall that in my somewhat lengthy post about The Republicans and Health Care I said "Now, back to the individual mandate. The Republicans claim that it is unconstitutional. They may be right." And now a U.S. District Judge in Virginia has ruled that the individual mandate is unconstitutional. Here's the report from the Washington Post (as of 1:48 PM CST):

In a 42-page opinion, Hudson said the provision of the law that requires most individuals to get insurance or pay a fine by 2014 is an unprecedented expansion of federal power that cannot be supported by Congress's power to regulate interstate trade.

"Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market," he wrote. "In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution.]

Hudson is the first judge to rule that the individual mandate is unconstitutional. He said, however, that portions of the law that do not rest on the requirement that individuals obtain insurance are legal and can proceed. Hudson indicated there was no need for him to enjoin the law and halt its implementation, since the mandate does not go into effect until 2014.

So now what are the Republicans in Congress going to do?

I am going to stick to my previous prediction that the Republicans will not seek to repeal the PPACA through legislation but will instead pursue the judicial route. In addition to what I said in the last section of my lengthy post, I will add something I told someone yesterday--with a little addition. I said "Moreover, there is still a chance that the mandate will be declared unconstitutional. That is the avenue the Republicans will push the hardest because it does not entail Congress having to take any [direct] action." Now the Republicans can say "See? It's not us that shot down health care. The thing was unconstitutional." This has several distinct advantages for the GOP. 1) No one can blame them for repealing the PPACA. 2) They really don't have to spend time and energy trying for a repeal. 3) Instead, they can use their time and energy to try to pressure the Dems --and most especially Obama--to come up with something new. And given Obama's past history (especially the tax deal), I'd say that strategy has a high chance of success.

That strategy is certainly what I would pursue if I was a Republican, particularly since Judge Hudson 1) declared only the mandate unconstitutional and 2) did not enjoin enforcement of any of the rest of the PPACA.

The problem for the Republicans in terms of repeal is that the only reflexively objectionable portion of the PPACA is the individual mandate (primarily because of the penalty involved). It's kind of hard to argue that the consumer protections and the health insurance exchanges are really bad. In other words, trying to repeal the rest of the PPACA is going to be an uphill climb. Because of that and because of Obama's lack of backbone in dealing with the Republicans, the GOP would be better served by continuing to apply indirect political pressure to get changes in the PPACA.

So now what are the Democrats going to do?

Tough to say. The problem for them is that the non-mandate portions of the PPACA--such as the consumer protections and exchanges--constituted the reform provisions (to the extent there was reform), but the individual mandate was the thing that could have made the whole system eventually succeed. In order for the exchanges to eventually do what they are designed to do, insurers have to offer good and fair policies via the exchanges, and wth the individual mandate the insurance companies would have incentive to do that. Without the individual mandate, it could very well make more business sense for the insurance companies to stay out of the exchanges (and under the PPACA they have that option). Also, the individual mandate was the trade off for all the consumer protection provisions in the PPACA--and those apply to all insurance policies. Thus, the insurance companies could start trying to weaken those consumer protections.

Thus, I am guessing that the Dems will try to keep those consumer protections in place. What I'm not sure about is whether Obama is going to take up that fight. More on that in a bit...

Some people might think that this opens the door for a revisit of the public option. Indeed, I thought previously that a repeal of the PPACA could present such a possibility. Now I am not so sure. Republicans hate the public option more than they do the individual mandate, so any attempt to put the public option back on the table is going to be extremely difficult. Also, Obama has pretty much abandoned the idea of a public option. Not only did he bail on it during the legislative process, he absolutely threw under the bus anyone who wants to support it now or in the future. He did that during his hissy fit press conference the day after the tax deal. In defending his deal with the GOP on tax cuts, he said the following:

So this notion that somehow we are willing to compromise too much reminds me of the debate that we had during health care. This is the public option debate all over again. So I pass a signature piece of legislation where we finally get health care for all Americans, something that Democrats had been fighting for for a hundred years, but because there was a provision in there that they didn’t get that would have affected maybe a couple of million people, even though we got health insurance for 30 million people and the potential for lower premiums for 100 million people, that somehow that was a sign of weakness and compromise.

In other words, "I got insurance for everyone and lower premiums, so anyone who wanted the public option should kiss my ass and be thankful for the chance." Obama has ensured that politically speaking he cannot ever advocate a public option again, AND he has shown that he will scold any Democrat who ever does so. Without Presidential backing there is absolutely no way the public option ever has a chance of becoming law.

The way that Obama basically gave into the Republicans in the tax deal (and he did--a topic I will discuss in another post) and the way he went after members of his own party in that post-tax deal press conference indicate to me that he is not going to support Congressional Dems in anything they want to do that meets Republican resistance. So, I am not at all sure that Obama will fight to keep the consumer protection provisions of the PPACA.

Given all of the above, I am not sure what the Democrats are going to do--other than fight the individual mandate battle in the Courts.

So now what are the Courts going to do?

This is a bit of a complicated matter, and I will either address it in a subsequent post or add that discussion to this post. Stay tuned...