SCOTUS Ruling An Unappreciated Win for the GOP

The ruling upholding most of Obamacare was an as-yet-unappreciated boon for the GOP. A brilliant move by Roberts, he managed to preserve the remaining integrity of the court — and raise his own stature — while at the same time increasing the odds of a Romney win. How?  By recasting the mandate as that third-rail of politics, a tax.  Let’s dissect both these statements.

First, how can we be sure it wasn’t a major victory for Obama, pundits notwithstanding?  There is a “market” in presidential election predictions, www.intrade.com.  One may place bets on candidates and while, like the stock market, it is wrong sometimes, the “price” of each candidate does react to events. So, for instance, Rick Perry’s price fell 75% within seconds of his forgetting the name of the third cabinet department he was going to eliminate.  And yet, a full day after Obama’s “victory” the “price” his re-election chances still has not budged. It bumped briefly and has since fallen back to the same $5.40 (to win $10 if he wins—a 54% probability) that it’s been hovering at for weeks.

Second, was Roberts accurate, or just politically astute, in re-casting the mandate as a tax?   Answer:  The latter.

It’s not a tax or even really a “mandate.”    The best analogy for the bare-bones coverage that uninsured people will be required to purchase would be as follows.   Suppose you buy a refrigerator.  There is an optional service contract.  If you want repairs covered, you buy the service contract.  But what if the repairs were covered even if you didn’t buy the service contract…but the cost of those repairs was included in everyone else’s service contract, driving the cost of those contracts up?   Of course, you would demand that other people pay their fair share by purchasing their own service contracts.

So, unless you were part of Ron Paul’s “let-him-die” chant during the Republican debates, you would still advocate universal access to “repairs”, in the form of emergency and catastrophic care, to the uninsured population, many of whom would run out of assets long before their bills for such care were paid, and be bailed out by the rest of us.

Why, then, if they can afford it, shouldn’t they have to buy the service contract?

Al Lewis, called “the country’s leading outcomes measurement guru” in the 9th Annual Report on the Disease Management and Wellness Industries, is president of the Disease Management Purchasing Consortium, www.dismgmt.com. He was founder and first president of the Care Continuum Alliance. An excerpt from his critically acclaimed new book Why Nobody Believes the Numbers: The Outcomes Measurement Guide for Grown-Ups may be downloaded here.

17 replies »

  1. “Believes in private charity” ??? Who doesn’t believe in private charity? That won’t solve society’s problems. Some people are selfish, like Leona Helmsley, who left $8 billion to her dogs. You can’t rely on people to be altruistic. Thats why we have government. The service contract analogy is a good one.

  2. Nice try BobbyG. You couldn’t find the clip with his answer or it didn’t fit your narrative? GeorgeC – libertarians recognize that “society” and the state are not synonomous. Paul believes in private charity and as a doc he’s walked the walk.

  3. either Paul is a libertarian or not. he cant run away from his philosophy when convenient. bottom line is that a libertarian would “let him die.”

  4. http://www.youtube.com/watch?v=irx_QXsJiao

    @ 0:51:

    “That’s what freedom is all about; taking your own risks.”

    He then tried to dance away between the raindrops, in true slippery pol fashion.

    Maybe you can explain to us the essential difference.

    “If you take your own risk and guess wrong, well, too bad for you.”

  5. Right except that Ron Paul said nothing of the sort. One or two individuals at one debate yelled “yeah” to asked a question asked of Ron Paul.

  6. good point! I do agree (as mentioned by another comment) that the mandate is overpriced relative to actuarially expectable costs for people who would be subject to it. So the law is not perfect and like most laws and regulations some people benefit at the expense of others, but hopefully more of the former than the latter. However, I’d also point out that life insurance for young people and low-risk driver car insurance also have very low loss ratios.

    I suspect that making laws (which I haven’t done) is a lot like being on Jeopardy (which I have done) in that the TV screen in your living room makes it look deceptively easy to get the right answer.

  7. The missing piece here is the true cost of health care. Al Lewis writes as if he assumes current charges for health care are reasonable and reflect true costs. Do they? Paying your fair share starts with real pricing. We aren’t there yet.

  8. Very nice insight sir. I think that we’re being rope-a-doped. My view:

    Does ‘health care’ oppression = ‘voodoo’ magic?

    Look harder my dear friends. If you were a previous attorney, now president, wouldn’t you create a whole new ‘health care’ market for all of your colleagues to practice in if you could? Or, God forbid, let guns walk if it increased your market share and market value? This isn’t a political issue. Politics has become a deceptive rouse. These are legal malpractice issues. Oppressive corruption at it’s ‘finest.’

    The attorney clan will forever benefit from the recent Supreme Court Health care decision. And we the people will forever pay for it all, and suffer from it all. Or else risk going to jail. Or else Doctors fighting with insurance companies. Or else insurance companies & doctors fighting with patients. (Which all helps their judicial business.) A win-all for them. But a loose-all for the rest of us. They have become the head, we have let ourselves become the tail. They produce nothing, but feed off of our productions. In fact, they exploit our production for their own gain.

    0.3%-ers controlling 99.7% of the rest of the population before and after any election. Whatever it takes to make them a buck or a big ego I guess?! Does one man’s ego = we the people’s pain?

    Citizens for an Upright U.S.A. fight against corruption.

    (See the real Head of Government at uprightusa.org under the link: LEGAL DEVELOPMENTS and then the link THE REAL THREE BRANCHES OF GOVERNMENT.)

  9. How is it victory for you? Do you REALLY know whether ACA is beneficial or not? Can you cite specifics?

  10. Intrade both reacts and predicts. Did you “buy” a prediction of an uphold at those 5:1 odds? I didn’t think so., any more than either of us predicted Perry would self-destruct in those 30 seconds.

    Their predictions, like any market, are imperfect, but the reactions to what has already happened are the best gauge of sentiment, and the reaction was flat.

  11. The reason the service contract argument does not work was answered in the course of the oral argument at the Supreme Court. What became clear (at least to many of the justices) is that the mandate is not about requiring coverage so uninsured cover their own costs; it was about getting younger people, who on average have about $800 in annual medical costs, to pay $4800 a year on medical insurance in order to cover the costs for older folks. That’s why the Administration and the insurers pressed so hard on it. It’s about wealth transfer from young to old . You can argue whether that is good or bad policy but the service contract model was simply not the issue. It is for this reason that, in my view, the Commerce Clause argument failed.

  12. So, you right-wingers who have comebacks for everything, why isn’t the mandate like a service contract and why should I have to pay for someone else’s “repairs” if they elect not to buy coverage?

  13. I loved Justice Roberts’ smackdown of Scalia’s eat-your-broccoli canard.

    “[A]lthough the breadth of Congress’s power to tax is greater than its power to regulate commerce, the taxing power does not give Congress the same degree of control over individual behavior. Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full weight to bear. Congress may simply command individuals to do as it directs. An individual who disobeys may be subjected to criminal sanctions. Those sanctions can include not only fines and imprisonment, but all the attendant consequences of being branded a criminal: deprivation of otherwise protected civil rights, such as the right to bear arms or vote in elections; loss of employment opportunities; social stigma; and severe disabilities in other controversies, such as custody or immigration disputes.

    By contrast, Congress’s authority under the taxing power is limited to requiring an individual to pay money into the Federal Treasury, no more. If a tax is properly paid, the Government has no power to compel or punish individuals subject to it.”

    Pay your PPACA tax penalty. Or not. Then continue munching your Constitutionally Protected Twinkies.

  14. @ TBoneMD ouch

    The spin here is : the law gets thrown out we have a crushing defeating for you. The law gets upheld, victory for me.