Despite widespread concern (or celebration) of a “conservative trap,” the ACA decision was surprisingly progressive. (More)

SCOTUS and the ACA: A Surprisingly Progressive Decision (Non-Cynical Saturday)

Yesterday we parsed the legal issues of the Supreme Court decision on the Affordable Care Act, and how each judge voted on each issue. Today we look at what the decision will likely mean, in terms of precedent, policy, and politics.

Precedent Winners and Losers

Since the Court’s decision was released, there have been both concerns and celebrations about whether Chief Justice Roberts’ opinion set “conservative traps” for future cases. We’ll discuss the political issues below, but the legal argument for a “conservative trap” presumes the ACA fell within Commerce Clause precedent, thus this decision “narrowed” Congress’ authority to regulate commerce.

I disagree. There are reasonable arguments for why health care presents a unique case for Congress to require people to buy health insurance. Yet this fact remains: there was no Supreme Court precedent reading the Commerce Clause as giving Congress authority to compel demand for a private good or service. The Court has long held that Congress can regulate the supply of goods and services, from production to distribution to marketing to whether some businesses can refuse some customers. Chief Justice Roberts’ holding did not “narrow” those precedents. He and the dissenters refused to extend that Commerce Clause regulatory power to demand, holding that Congress cannot make it illegal to not buy a private good or service. (Note: In a separate opinion, Justice Clarence Thomas would have narrowed Congress’ regulatory power under the Commerce Clause. His lone opinion is not binding.)

Instead, Chief Justice Roberts and the majority held the ACA can be read not as compelling demand, but rather as using the tax code to induce demand, an authority the Court has long recognized in the Taxing and Spending Clause. Congress could not order people to buy health insurance under penalty of criminal prosecution, but Congress could (and did) make health insurance more attractive by offering premium subsidies for median- and lower-income Americans, as well as by imposing a “shared responsibility payment” – a tax – on people who could afford insurance but refuse to buy it.

The “shared responsibility payment” prescribed in the ACA will not be more than the cost of health insurance, and it may be less depending on one’s income and other factors. As Chief Justice Roberts noted, some families may decide their best economic course is to forgo insurance and pay the tax. If they stay healthy, that may be indeed be their best choice. But if they get seriously injured or suddenly ill, the insurance they buy might not cover costs incurred before they bought the policy, and they may find that paying the tax rather than having insurance wasn’t so smart after all. If they can’t pay those pre-insurance costs, losses incurred by the hospital and other health care providers will be offset, in part, by the “shared responsibility payment” the uninsured person had been paying.

Here are my winners and losers, in terms of legal precedent:

  • Winners: Congress, Supreme Court, Nudgers, Voters – Congress won, as the Court recognized that the ACA fell within long-standing constitutional precedent. The Supreme Court did not interpose themselves as a super-legislature, and issued a reasoned opinion. Nudge advocates won, as the Court reaffirmed Congress’ authority to use the tax code to encourage socially beneficial behavior and discourage socially harmful behavior. And voters won. Chief Justice Roberts and the majority held that, so long as Congress and the president do not transgress the Constitution, elections and their consequences must be respected.
  • Losers: Paul Ryan, Republicans – The surprising losers are Rep. Paul Ryan (R-WI) and Republicans, whose Medicare ‘reform’ plan would have given vouchers to seniors and required them to buy their own health insurance. Unless the plan is rewritten to make private insurance an option and/or include a tax penalty for seniors who don’t buy insurance, I don’t see how it would survive Court scrutiny under this precedent.

Policy Winners and Losers

In terms of policy, the outcomes are a little clearer:

Political Winners & Losers

Although pundits and other prognosticators began weighing in on this within seconds after the decision was released, I left it for last. While elections are important, we progressives cannot forget that government must be about something more than who wins the next election. The ACA is a legislative landmark, and a huge step toward ensuring universal access to health care in the U.S.

But there’s also some self-interest involved. I didn’t make a prediction about the Court’s ruling on the ACA, because my experience has been that Court decisions are not very predictable. Likewise with the political responses to Court decisions.

Those on the right have been dancing with joy over Chief Justice Roberts “declaring ObamaCare a tax,” even as some of them say that must have happened in an epileptic fit. In the RedState article linked above, Erick Erickson claimed the Supreme Court “just handed Mitt Romney the White House,” by firing up a dormant Tea Party while lulling progressives into a false sense of security. I wouldn’t measure the drapes yet.

While studying Go in Okinawa, I once asked my sensei if I’d just made a good move. He replied: “Good move, bad move, all is next move.” And here as well.

If President Obama, Democratic candidates, and we activists use this decision as a springboard to discuss the many positive (and popular!) elements of the Affordable Care Act, this becomes a win-win. We should emphasize that the Supreme Court found the ACA is a kind of solution, authorized by an enumerated power, that our federal government has used and our courts have upheld for two centuries.

And we should emphasize that – contrary to spin from Republicans and some on the Professional Left – the Supreme Court did not rule that health insurance premiums are taxes paid to a private corporation. Instead, the Court said people can refuse to buy health insurance, but they can’t be freeloaders. They owe a “shared participation payment,” a tax to offset the inevitable costs when they need health care and haven’t prepared to pay for it. That is called “personal responsibility.”

If progressive Democrats make the right “next moves,” this landmark Supreme Court decision on this landmark Democratic achievement will become a political win-win. It’s your move….


Happy Saturday!