Freedom Line Blog

There’s a lot to say about Chief Justice John Roberts’ opinion rewriting ObamaCare’s individual mandate as a tax in order to save the law from being ruled unconstitutional.  One of the best – and most succinct – analyses comes from the CATO Institute’s Michael F. Cannon:

The Supreme Court ruled that ObamaCare’s individual mandate is not constitutional under the Commerce Power, which was how Congress framed the mandate to avoid a political backlash from calling it a tax. Congress and the president swore up and down that the mandate was not a tax. Yet the Court upheld the mandate as a valid use of that disavowed taxing power. What Congress said the individual mandate is, the Court said is not constitutional. What Congress said the mandate is not, the Court ruled is constitutional. Everybody got that?

Where does that leave us?

The Supreme Court just enacted a law that Congress never would have passed.

The Court just told Congress it is okay to lie to the people to avoid political accountability.

Remember when Obama  solemnly and repeatedly promised that “if you like your insurance plan, your doctor, or both, you will be able to keep them?”

If not, don’t beat yourself up.  He has broken so many promises that no reasonable person can keep tally.

But score another casualty to ObamaCare specifically.  According to The Wall Street Journal, college students should expect their plans to become more expensive or disappear altogether:

“Some colleges are dropping student-health plans for the coming academic year and others are telling students to expect sharp premium increases because of a provision in the federal health law requiring plans to beef up coverage.  The demise of low-cost, low-benefit health plans for students is a consequence of the 2010 health care overhaul.  The law is intended to expand coverage to tens of millions of uninsured Americans, but it is also eliminating some insurance options.”

Moreover, that consequence will likely be widespread:

“The new rules are likely to affect a broad swath of American colleges.  Some 60% of schools’ plans had coverage of $50,000 or less for specific conditions, and almost all of the rest have some sort of payout caps that they will have to do away with by 2014, the GAO study found.”

And the Obama Administration’s response?  They apparently couldn’t care a whole lot less.  “The Obama Administration,” the report notes, “argues that the most limited benefit plans colleges previously offered hardly counted as coverage at all.”

Yeah, that should motivate the youth vote for Obama just like those vapid, naive days of 2008.

Avik Roy, a health policy expert at the Manhattan Institute, posits an interesting option for fiscal conservatives looking for something to replace Obamacare with, if Republicans capture Congress and the White House this November: Bushcare.

The Bush plan was formulated by the White House’s National Economic Council, under the leadership of Allan B. Hubbard. The core goal of the plan was to equalize the tax treatment of employer-sponsored and individually-purchased health insurance, without increasing the deficit. (As regular readers know, the fact that employers can purchase health insurance for their workers tax-free, whereas individuals can’t, is the original sin of the U.S. health-care system.)

…

Bush’s proposal sought to eliminate the unlimited tax break for employer-sponsored insurance, replacing it with a standard deduction for everyone. Under the plan, anyone—employed or not—who bought at least catastrophic insurance would not pay income or payroll taxes on the first $7,500 of their income, or the first $15,000 for a family plan.

…

The Bush plan’s numbers were designed with 2009 insurance prices in mind, and the tax-deduction thresholds would grow with CPI inflation. The Treasury Department estimated that the plan would lower taxes for 80 percent of those with employer-sponsored insurance, and increase taxes for the remaining 20 percent. It would have especially benefited the 18 million people who then bought insurance on their own, along with many of the uninsured, who would suddenly find health insurance to be significantly less expensive.

…

In contrast to Obamacare, however, the Bush plan would have turbocharged the market for consumer-driven health plans, tied to health savings accounts, because the most economically efficient use of the deduction would be to purchase a sufficiently generous consumer-driven plan that allowed individuals to put a maximal amount of money into HSAs. Obamacare significantly constrains the use of HSAs in its regulated insurance markets.

Among the criticisms of Bush’s health care proposal is that it “only” expanded health insurance coverage to an additional 11 million people.  Obamacare’s supporters claim – perhaps erroneously – that it would cover 33 million.  But even if we take the estimates at face value, there’s another number that’s arguably more important.

The cost of Obamacare’s 33 million newly covered citizens is agreed by all sides to be in the trillions of (new) dollars.  Bush covered 11 million for zero dollars in increased federal spending commitments.

Food for thought if the Republicans run and win on a platform to repeal and replace Obamacare.

Christine Erickson at Free Enterprise Nation has a chilling analysis of Judge Henry Hudson’s ruling that Obamacare’s individual mandate is unconstitutional:

The idea behind the individual mandate is that it is a way to achieve universal coverage through the private market, rather than through a government-sponsored plan. When considering the regulations placed on insurance companies by the reform law, the individual mandate is necessary because it brings healthy individuals into the insurance pool. Under a major provision within the law, insurers can no longer deny policies to people with preexisting conditions. If this regulation is put in place without the individual mandate, a healthy individual can go without insurance, knowing that he or she can purchase coverage after having been diagnosed with a serious medical problem. For insurance companies that sell to the individual market, this would shift the makeup of their policy holders to the point where they would spend much more on claims than they make in premiums, leaving them with the decision to drastically raise premiums (15% to 20% by CBO estimations) or exit the individual market altogether. Once private insurers are forced out of the individual market, it is almost guaranteed that the government would step in and create a government-run plan.

With Judge Hudson’s ruling, as well as two other recent rulings that the mandate falls within Congressional limits, healthcare reform supporters now see two likely outcomes to a Supreme Court challenge: the law will be upheld in its entirety, or the individual mandate alone will be overturned. If the Supreme Court decides the latter, the country could be immediately set on a path towards a government-run, single payer system.

Oh, dear…

In Friday’s Liberty Update commentary “The ObamaCare Fit Hits the Shan,” we noted how quickly the negative consequences of ObamaCare are arriving in the form of higher health care spending and insurance rates.

Well, Kathleen Sebelius, President Obama’s Health and Human Services Secretary, seems to believe that she can terrify the economic laws of supply and demand into deference.  Attacking private health insurers for doing nothing more than adjusting their bottom lines to meet business realities imposed by ObamaCare mandates, Sebelius ordained:

There will be zero tolerance for this type of misinformation and unjustified rate increases.  We will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.”

Karen Ignagni, who leads America’s Health Insurance Plans, provided an Economics 101 primer that Sebelius should have received in college by saying, “It’s a basic law of economics that additional benefits incur additional costs, and the impact on premiums depends on the type and amount coverage policyholders had before.”

Simple economics aside, who does Sebelius think she is?  A Soviet-era commissar who can cow American citizens and businesses by thundering such threats?  Ms. Sebelius, you’re about to receive a true lesson in “zero tolerance” when Americans head to the ballots in November.