Officially, it is no longer the law of the land. That
means more than anyone is letting on.
(Page 2 of 3)
They Can’t Believe He Ate the Whole Thing
Once the individual mandate was declared unconstitutional, it was inevitable that the whole Obamacare law would be struck down, as Judge Vinson also ruled. The legislation included no severability clause as in most every bill, which provides if one provision is struck down, the rest survives. That was not an oversight.
Without the individual mandate, the rest of Obamacare is transparently unworkable, as President Obama and the Democrats themselves said during the jihad for its enactment. That is because the bill also includes what is known as “guaranteed issue” and “community rating.” Under those provisions, an insurance company must insure whoever applies, and charge them no more than anyone else, no matter how sick or costly they are when they first apply.
This is like fire insurance regulation requiring the insurer to accept whoever calls for coverage, and to charge them no more than anyone else, even if their house is already on fire when they first call! In health insurance as in fire insurance, this would naturally cause premiums to skyrocket. But it’s worse than that.
The skyrocketing premiums cause younger and healthier individuals to drop their coverage. That forces insurers to raise premiums even more because the remaining pool is even sicker and costlier on average. The younger and healthier than flee even more, knowing they can automatically get coverage later if they become sick! In fire insurance terms, this leaves the insurer with a “risk pool” of all burnt down houses, which is quite costly to cover. The result is a financial death spiral both for the insurers and anyone still trying to pay premiums.
The individual mandate was intended to be the antidote to this death spiral. If everyone must buy the insurance in any event, premiums would still rise, but no one could drop out in response. The system could then still function, albeit at higher insurance rates, exactly contrary to what was promised. But without the individual mandate, the whole system inevitably collapses as described above.
This is why, as Judge Vinson wrote, “the defendants concede that the individual mandate is absolutely necessary for the Act’s insurance market reforms to work as intended. In fact, they refer to it as an essential part of the Act at least fourteen times in their motion to dismiss.” Where there is no severability clause, the legal standard that determines whether the whole law must be struck down is whether what is left can still function independently of the part that was struck down, and whether Congress would have intended for the law to continue in that manner. The remaining dysfunctional Obamacare without the individual mandate does not fit this legal standard.
As a result, Judge Vinson rightly concluded:
[T]he record seems to strongly indicate that Congress would not have passed the Act in its present form if it had not included the individual mandate. This is because the individual mandate was indisputably essential to what Congress was ultimately seeking to accomplish….The Act, like a defectively designed watch, needs to be redesigned and reconstructed by the watchmaker.
The Supremes in the Final Act
Just as I predicted that Vinson would follow Hudson in making this ruling, I predict as well that Justices Roberts, Scalia, Thomas, and Alito will now follow Vinson and Hudson in also finding the individual mandate unconstitutional, and in throwing the whole Obamacare Act out on the same grounds as above.
The swing fifth vote is as usual up to Justice Anthony Kennedy. I believe what will be decisive in winning his vote as well is to demonstrate there are other alternative means to achieving the goals of Obamacare that would be constitutional, so we would not be asking Kennedy to rule that universal health care for all must be unconstitutional.
Just two basic reforms would provide a universal health care safety net that would ensure that no one need ever suffer without essential health care. First would be to block-grant Medicaid back to the states, with each state then to replace it with Medicaid vouchers for the purchase of private health insurance. Each state would decide how much to provide at each income level in their state to ensure that no one would lack basic health insurance because they were too poor.
This would benefit the poor enormously because the current Medicaid program so badly underpays doctors and hospitals that the poor often cannot find doctors and hospitals that will treat them under Medicare. With these Medicaid vouchers, the poor would enjoy the same health care as the middle class, because they would enjoy the same health insurance as the middle class.
The second reform is state uninsurable risk pools for those who nevertheless still do not buy health insurance, and then become too sick and costly to buy it, like the homeowner who fails to buy fire insurance before his house catches on fire. These uninsurables would get coverage from the risk pool, paying premiums based on their ability to pay. The state would subsidize the pool for the remaining costs. A majority of the states already operate such uninsurable risk pools, and they have proved quite workable.