The centerpiece legislation of President Obama and his Administration – the Patient
Protection and Affordable Care Act (PPACA) – is in the hands of the U.S.
Supreme Court. They are soon to rule on the constitutionality of the “individual
mandate” which requires U.S. residents to purchase health insurance. The Court
could also maintain or drop the other key elements of the law.
Most observers (and the Intrade market) have a greater than
75% probability that the Supreme Court will rule the individual mandate
unconstitutional. While it is impossible to know which way the court will vote,
I am going out on a limb to predict the mandate and the law will be upheld.
It should be noted that I am not a lawyer, but I believe
that those who have challenged the mandate as violating the U.S. Constitution’s
Commerce Clause (which grants Congress the authority to regulate interstate
commerce) will not prevail. The argument against the mandate is that a person’s
decision not to get healthcare coverage is not interstate activity, but rather
inactivity, which Congress does not have the right to regulate. The opposing
argument – which I think will prevail - is that a decision not to get health coverage
has implications for all health plan sponsors, other payors that must cover the
cost of compensated care, and health care providers, and does not constitute
inactivity.
I believe that Justice Kennedy, who might be the lone
centrist on the Court, will uphold – even though experts believe that his questions
during oral arguments suggested strongly that he was leaning against the
individual mandate’s constitutionality. Chief Justice Roberts might also be a
surprise supporter of the law. With this being an election year, he’s well
aware that the most pivotal presidential and senate election issue would be
whether or not to repel the health care act. He could simply kick the can down
the road; something that the European Central Bank has done with the recent sovereign
debt issues. His Court already is much criticized for the Citizen's United ruling.
Roberts might also uphold the mandate because the genie is already out of the bottle and that many of the benefits of the Act and its multiyear of
reforms have already started being implemented. The fact that the Act does not contain a “severability”
clause, a standard provision in most legislation, will keep the Supreme Court
from making piecemeal decisions. Again, I know I’m swimming against the current,
but I believe Obama Care will be upheld by the Court – in the upset of 2012!
