Obamacare’s threat goes beyond the individual mandate

The 11th Circuit Court of Appeals’ ruling Friday that Obamacare’s individual mandate is unconstitutional is only part of the story. The rest of the story, with maybe the biggest impact, is that the court would let the rest of the law stand without the mandate.

And allowing that to happen could bankrupt the private health insurance industry — and put on the track to full-blown socialized medicine — even faster than an intact Obamacare threatens to do.

Everyone, from the Obama administration to the 26 states, including Georgia, that brought this lawsuit, agrees that the individual mandate is the key to the law because it is the mechanism for making people buy insurance before they become sick. The administration argues this is a reason for keeping the entire law intact; the states argue this is a reason for throwing out the entire law.

But unlike District Judge Roger Vinson, the appellate court decided that Congress didn’t have to include a “severability clause” for the law to survive even if one of its components were struck down:

Supreme Court precedent confirms that the “ultimate determination of severability will rarely turn on the presence or absence of such a clause.” … Rather, “Congress’ silence is just that — silence — and does not raise a presumption against severability.”

The court did examine two particular reforms to see if they should go out along with the mandate — noting that, without the mandate, the “guaranteed issue” and the ban on denials based on pre-existing conditions could “have significant negative effects on the business costs of insurers.” But it deferred to Congress nevertheless:

Just because the invalidation of the individual mandate may render these provisions less desirable, it does not ineluctably follow that Congress would find the two reforms so undesirable without the mandate as to prefer not enacting them at all. The fact that one provision may have an impact on another provision is not enough to warrant the inference that the provisions are inseverable. (italics original)

That may well be the right judicial decision. But it’s a policy disaster in the making.

At The Atlantic, Megan McArdle puts it this way:

Presumably, the insurance market across the United States [would end] up looking a lot like New York’s market, where during the debate over health care reform it was reported that the cost of the average family policy in the individual market was over $4,000 a month. That’s because New York has the other features of Obamacare — community rating and guaranteed issue — without the mandate. The result was that all the healthy people dropped out of the pool, leaving a few very sick people to buy insurance.

There’s a slight difference though: the government is going to subsidize individuals in the private market. If the subsidies keep pace with the cost, Obamacare’s nominal deficit reduction is going to turn into a gaping hole in the federal budget.

As she goes on to argue, Congress may not have the will to take away the other reforms piecemeal once they’ve come on line, even if they become financial drains.

All of which is why Republicans in Congress should continue pushing to repeal the entire law and replace it with market-oriented reforms, rather than counting on the courts to set things right.

(Note: See my commentary about the rest of the ruling here.)

– By Kyle Wingfield

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215 comments Add your comment

[...] at 5:10 p.m.: Rather than tackling the severability issue in this post, I’ve put up a separate item about [...]

MarkV

August 12th, 2011
5:32 pm

Kyle,
One more time you are on the wrong side of history. There is no fundamental reason to have private health insurance industry. If the result is, as you predict, their demise, so be it. But you use the usual demagoguery about “socialized medicine.” The medical providers would still remain mostly private even if we got a single payer system.

Gm

August 12th, 2011
5:35 pm

So Kyle I guess the 30 millions people including women and children should wait another 100 years before someone stands up and face this problem. How many Rep President tried reform and put people first?
Thanks President Obama for puting yourself one the line for the under dogs who can not fight big insurance and doctors who care less if you live or die.

Esperenza

August 12th, 2011
5:54 pm

So, lets see if I get this: the Bills Individual Mandate clause is being challenged on the premise its unconstitutional to require individuals to pay, yet this is identical in nature to requiring auto insurance,
so, as usual the politicians have no consistency to their logic, and grasp whatever is handy to ramrod rules through, or shoot them down depending – I say abolish auto insurance – we can then turn back the clock to a “simpler time” ;-)

Tman

August 12th, 2011
6:07 pm

Gm – Of what 30 millions people do you refer? Who has waited 100 years for someone to face what problem? Not trying to be funny, just trying to understand where you’re coming from and where you’re going with your argument.
Esperenza- This is NOT identical in nature to requiring auto insurance. Millions of people do not own a car, do not drive, and therefore are not required to purchase auto insurance.

jconservative

August 12th, 2011
6:14 pm

I repeat what I said earlier on the last column.

Note: The Constitution says what the Supreme Court says it says, nothing more and nothing less.

If the Supreme Court says “No Mandate”, then that is what the Constitution says.

To date the cases in all Circuit Courts have revolved around the Commerce Clause. And to date one Circuit Court says mandate is OK, another says “no mandate” and the third has yet to rule.

The Roberts court is a big supporter of an expanded Commerce Clause. So one would not be surprised if they said OK to the expanded Commerce Clause “mandate”.

But this is also a big “political case” and the Court is not immune to politics.

The 26 states appealed based on the Commerce Clause. Any other arguments are beside the point until the Supreme Court rules. And the Supreme Court can use any argument it chooses, just so there are 5 votes.

Obamacare may be the worst disaster to hit the USA in over 200 years. But if it is Constitutional, per the Supreme Court, then it is Constitutional.

Then you look to Congress to rescind it.

And if Congress can rescind Obamacare and the Prescription Drug mess, that is over $40 trillion in spending cuts.

Mae238

August 12th, 2011
6:15 pm

So, let’s pass a new law: Hospitals and doctors do not have to treat you if you cannot pay. Then watch everyone buy insurance. It’s harsh, but it would work. Right now hospitals are required to treat anyone who walks in their door. This is a huge factor in the increase of medical costs for all of us.

MarkV

August 12th, 2011
6:19 pm

Tman @6:07 pm: “Millions of people do not own a car, do not drive, and therefore are not required to purchase auto insurance.”

True. And people who are dead or have not been born would not be required to buy health isurance.

Scott

August 12th, 2011
6:26 pm

Esperanza,

You forget that auto insurance is not federally mandated but state mandated.
There’s a difference.

Tman

August 12th, 2011
6:26 pm

Sorry Mark V @6:19. Not following you. I may be dense.

Dusty

August 12th, 2011
6:27 pm

If the courts can’t straighten out this mess, then it is time to start over.

This is just one more thing that people want for FREE. Only it is is not free. Every taxpayer in America will be paying for it while the government is already trillions in debt. Just add a couple of more trillions and give everybody FREE healthcare.

When Americans forgot independence and went for DEPENDENCE, then the USA went into debt. The government has become the citizen babysitter. Only we cannot pay for it.

There are hospitals and clinics all over this country for the poor. Drug companies offer help in getting meds. The few who can’t get help will always need help. They usually do not take advantage of what is offered.

I hope the court throws out this entire mess called ObamaCare. It will help no one but will be detrimental moneywise to almost everyone. No one will be healthy if we incur any more debt which is now rising in unprecented quantities. It’s got to stop.

david green

August 12th, 2011
6:27 pm

Re: All of which is why Republicans in Congress should continue pushing to repeal the entire law and replace it with market-oriented reforms, rather than counting on the courts to set things right.
_____________________________

Unfortunately any so call market-oriented reforms Republicans offer will be maliciously and intentionally designed to benefit the insurance companies and enhance their profits at the financial expense and the lives of their customers.

MarkV

August 12th, 2011
6:33 pm

Tman @6:26 pm:

The fallacy of your car insurance argument is that it tries to show the car insurance payment as a fee for owning or driving a car. It is not, it is a compulsory insurance in case of an accident, to make sure that the damage is paid. Thus the equivalent of driving a car is living. The purpose of the health insurance is to make sure that the medical bills are paid. Unless you want to commit suicide you do not have a choice to live without a danger of accident or injury.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

August 12th, 2011
6:37 pm

It’s gotten so bad for obozo that even the moonbats think they would have been better off with, check this out, Hillary.

Hahahahahahahahahaha, oh my.

Dusty

August 12th, 2011
6:38 pm

David Green,

Republicans do not maliciously and intentionally design to benefit insurance companies. Insurance companies must make a profit like any other business that survives but to call that malicious covers more than Republicans.

Your slanted opinion is what ruins any discussion. ObamaCare has too many fallacies in it. It is not greed by Republicans but the presence of a flawed policy that should trouble everyone.

YES!!!!

August 12th, 2011
6:55 pm

Oh happy day!!! Finally, despite the devastating economic effect of policy that financially forces Americans to use the E.R. for primary healthcare, a precedent has been set that possibly paves the way to freedom from the shackles of homeowners insurance and car insurance! YES!!!!!

Aquagirl

August 12th, 2011
6:56 pm

Oh, man. If we have to depend on Congress to fix a bad situation, we are really screwed.

Derek

August 12th, 2011
7:05 pm

Here is what will happen if the individual mandate is repealed: things will hum along fine for a few years at first, and the system will seem to be working okay.
At some point there will be some shock that causes insurance prices to rise (ie. the baby boomers get to the point where they require a large amount of expensive healthcare). Insurance prices start going up, and healthy people decide stop buying insurance, driving up prices further.
To offset these costs a new class of business will form where, for a flat rate, they will buy insurance for you when you are sick, and cancel it when you are not sick. As people abandon the insurance companies for these intermediaries, health insurance costs spiral upwards until they cost as much as a sick person’s medical bills. The intermediaries in turn raise their rates until they cost as much as the insurance companies used to, and we end up back where we started.

Derek

August 12th, 2011
7:08 pm

People are again rejected for preexisting conditions, only it’s legal because it’s the intermediaries are doing the rejecting. Sure you can go to an insurance company and they can’t reject you, but since they now cost as much as your medical bills it hardly matters.

Derek

August 12th, 2011
7:08 pm

Of course none of this has to happen as long as we keep the individual mandate requiring everyone to have health insurance. I suspect that all of the rabble rousing about the individual mandate is just a sneaky way of rendering the health care bill irrelevant.

MakesMoreSense

August 12th, 2011
7:10 pm

The notion of, regardless of how long we have been doing business a certain way, of “brokering” healthcare as insurance companies do simply sickens me. Do away with the entire insurance industry! Individuals set up accounts with the hospital of choice, family physician of choice, and simply pay them directly, a set fee each month . You get sick, the doc is already paid for. Need surgery, monies paid go to the procedure needed, and perhaps on very expensive surgery’s an additional fee is required, . There are MASSIVE amounts of money spent that result in no, none, nada, zilch, improvement of healthcare rendered, and I would contend America’s healthcare for Americans is far worse off.

jt

August 12th, 2011
7:10 pm

Real men could care less what government lawyers say.
.
King George found that out the hard way.
.
Bring it.

GM

August 12th, 2011
7:19 pm

When business profits, it invests. This generally creates more opportunity and more jobs. You need some rich people to take the risk that they do or there would be no private jobs to support the government, and it’s dependants. Any of you who are not public sector union employess would be jobless without some rich person or group of persons taking a risk with their own money. Why does everyone comment on this topic without having the slightest clue? Right now, businesses (rich people) are not investing due to a guaranteed loss and certain increase in government regulation, therefore no additional opportunity, and no additional jobs. Please educate yourselves on both sides before commenting (liberals). Maybe you should thank your rich boss for the job instead of complaining about him/her, and his/her investment in you.

Phil's Tel-A-Gramm

August 12th, 2011
7:50 pm

What’s that you say! There can be no mandate for automobile insurance!

Phil's Tel-A-Gramm

August 12th, 2011
7:52 pm

Your desires have been rescinded, Kyle. :lol:

Michael H. Smith

August 12th, 2011
7:58 pm

MarkV

August 12th, 2011
6:33 pm

Your comparison is worse than between that of apple and orange.

Auto insurance is required because one mustdrive on roads that are owned by the state. That is a matter of securing public safety which is NOT the same as assuring payment of a private debt acquired for medical expenses.
Furthermore, States have the Right to issue driver’s licenses, which means the State not the individual, makes all the rules, sets all the terms and conditions in order for the individual to enjoy the privilege NOT THE INDIVIDUAL RIGHT to operate a motor vehicle on any and all roads within the States’ jurisdiction. The Right to Live is an endowment bestowed upon all individuals by their creator which is not a conditional privilege grant to them by a State government.

This liberal argument using auto insurance to merit State compulsory healthcare insurance is one of the lamest of incoherent analogizes ever used.

Hillbilly D

August 12th, 2011
8:00 pm

There are only 9 people whose opinions are going to matter on this. What I think or what anybody else thinks, doesn’t really matter.

Michael H. Smith

August 12th, 2011
8:16 pm

Hillbilly D

August 12th, 2011
8:00 pm

You know time was when only one opinion mattered on things like this, at least until we had a revolution. Those 9 people are probably very well aware of that fact and usually keep all of our opinions in their mind when making their official legal opinions known.

Then again, if enough contrary opinions are strongly held to point of amending the Constitution even those 9 opinions really don’t make a shid!

david green

August 12th, 2011
8:28 pm

Yes they do Dusty and any claim to the contrary is a lie. For years now I’ve watched how republicans talk conservative to get elected into office then turn their backs on these who voted them into office to serve the interests of big business in order to pay them back for donating to their campaign fund. World Com – Dick Cheney’s connection to Haliburton – the resultant fraud of contractors who did shoddy work in Iraq – the failure of the Bush admin. to properly regulate the banks and wall street that led to the economic collapse in 2008 – tainted food that killed many of our fellow American’s because Bush hobbled those responsible for ensuring the safety of the common food supply. All these and more come to mind. The simple fact is that republicans have dirty hands and those conservatives who ignore the many sins of the politicians they support either with their words or votes are just as dirty and morally accountable.

david green

August 12th, 2011
8:33 pm

Actually GM capitalists aren’t investing in the US as a tried and true means to force Obama to fail and convince the American people to vote him out of office. In other words they are committing Economic Treason against the people of the United States.

Michael H. Smith

August 12th, 2011
8:37 pm

Simple fact is the Democrats have very dirty hands in all things too!

And my opinion of liberals is no less damning than the one you have of conservatives.

Now what?

MarkV

August 12th, 2011
8:43 pm

Michael H. Smith @7:58 pm
Your argument is an utter, complete nonsense. “Auto insurance is required because one must drive on roads that are owned by the state. That is a matter of securing public safety which is NOT the same as assuring payment of a private debt acquired for medical expenses” Where do you get such silly ideas?

Michael H. Smith

August 12th, 2011
8:49 pm

MarkV

August 12th, 2011
8:43 pm

Utter and complete non-sense is the bases for your argument not mine. When you get in touch with reality you’ll no longer your have silly ideas.

Dave R.

August 12th, 2011
8:50 pm

“So, lets see if I get this: the Bills Individual Mandate clause is being challenged on the premise its unconstitutional to require individuals to pay, yet this is identical in nature to requiring auto insurance,
so, as usual the politicians have no consistency to their logic”

Esperanza, you don’t get this.

Auto insurance is mandated (however wrongly) because you use the government-provided road system they built. And arguably, there is a public safety component to driving which could come under the control of government.

Health care is not provided by the government, but rather by a private provider, therefore a mandate is un-Constitutional in that regard.

I’m glad I could clear that up for you. :)

Michael H. Smith

August 12th, 2011
8:55 pm

I’d argue the point against assumed wrong in the auto insurance mandate Dave R., otherwise we agree.

david green

August 12th, 2011
8:55 pm

First off Michael the state does not own the roads. The real owners are the citizens who live within that state who have entrusted the state to maintain the roads and to regulate them. Just as our Creator has endowed us with the right to life so has he endowed us with the right to move about freely which the state can not impede without becoming tyrannical. Mandatory Auto insurance was not created by the state to protect the citizens involved in an accident – for that was merely the excuse and the justification to seize a portion of the financial assets of those who need to drive a vehicle in order to take advantage of their natural right to move about freely and redistribute those financial assets into the bank accounts of the insurance companies. In other words the Auto Insurance companies and state politicians have willfully conspired to commit theft. Just as the heath insurance companies in the past have conspired to rob those who bought their policies while healthy only to be denied coverage and/or have their rates raised so high that they couldn’t afford to pay it after becoming afflicted with an illness.

Dave R.

August 12th, 2011
9:03 pm

“First off Michael the state does not own the roads.”

Oh yeah? Try dismantling the road outside your house someday. You’ll find out very quickly who owns them. :roll:

Sheesh!

Michael H. Smith

August 12th, 2011
9:08 pm

First off david green, we citizens are the “real state” so YES “THE STATE” owns the roads. “Freedom of movement” is not solely dependent upon traveling on STATE OWNED ROADS, bad point and poor logic on your part. Argue your point all you want about those greedy insurance companies in cahoots with the pols before the courts see where it gets you, and let me know when you plan to hold that circus – I’ll buy a ticket! Maybe two.

And you don’t have to buy health insurance at gun point, so how do you think “they” (the insurance companies) are robbing you?

Furthmore, Bush was a liberal.

Dave R.

August 12th, 2011
9:10 pm

The reason I’d argue about whether they have the right to do so is through the public safety clause they rely on. I understand it; I just don’t necessarily buy into it.

Phil's Tel-A-Gramm

August 12th, 2011
9:10 pm

The road in front of my house is private. Then there are municipal roads and county roads and state roads.

david green

August 12th, 2011
9:14 pm

Personally – since healthcare isn’t a right – I would like to see the entire healthcare industry shut down so that everyone {both rich and poor} is forced to live and die in the manner that Nature intended without interference from doctors and medical technology.

Dave R.

August 12th, 2011
9:17 pm

“The road in front of my house is private.”

Congratulations. I see the point is lost on you.

Phil's Tel-A-Gramm

August 12th, 2011
9:21 pm

I wonder if the Republican constituency has read this one.

And I see Dave R. cannot accept the fact that he is wrong about who owns the roads.

Dave R.

August 12th, 2011
9:21 pm

“Personally – since healthcare isn’t a right – I would like to see the entire healthcare industry shut down so that everyone {both rich and poor} is forced to live and die in the manner that Nature intended without interference from doctors and medical technology.”

Oh my freakin’ God!

Driving isn’t a right. Do we get rid of cars and walk because it is how nature intended us to travel? And don’t bother to use a horse, because that would be cheating, right?

Instead of mindless hyperbole, why don’t you make the case that health care is a right (if you believe it to be), or suggest something different that might be helpful.

Dave R.

August 12th, 2011
9:22 pm

Hey, Phil.

Former county commissioner here.

You want to try to tell me I’m wrong about the roads?

Go ahead.

Michael H. Smith

August 12th, 2011
9:22 pm

Dave R.

August 12th, 2011
9:10 pm

Agreed. Particularly with this well made point applicable to most all other disagreeable government things: I understand it; I just don’t necessarily buy into it.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

August 12th, 2011
9:26 pm

So how much of a laughingstock will obozo become? Will he make Dhimmi Karter appear cerebral and as though he has a spine? Will he make Herbert Hoover look like the second coming of Milton Friedman?

After this tragedy/comedy finally plays out, will the nation have a new found respect for Andrew Jackson?

How much more must we endure?

Drifter

August 12th, 2011
9:28 pm

Personally, I don’t think we can do any worse than we’re doing now. If the health insurance industry dies a quick death, good riddance. We pay roughly 50% more for health care than countries with “socialized” medicine, we don’t cover everyone and we get poor results. I think it’s funny that the GOP now has ideas on how to fix the problem. They’d be more believable if they’d come up with it when they had the power to implement it.

xCalaber

August 12th, 2011
9:29 pm

If I read the liberal arugment right. It’s a version of damn the constitution, we want to do what we like. Where does that end? What power does not belong to the state. The liberal argument is that the problem confers power to the all important government.

Of course this is all sophmoric nonsense. The constitution is still the supreme authority AND it actually means something. It creates limits that we cannot pass when inconvient. You can’t radically expand the power of the government to command citizens to buy a particular service for the rest of their lives without giving the state the power to end freedom of the press and freedom of speech in the same breath.

Lil' Barry Bailout (Revised Downward)

August 12th, 2011
9:33 pm

MarkV: There is no fundamental reason to have private health insurance industry.
————————

Wrong again. There is a reason to have a health insurance industry–people want to buy it.

Keep your fascism off my health care.