Friday, June 29, 2012

The Supreme court rules on the Affordable Care Act

Article first published as The Supreme court rules on the Affordable Care Act on Technorati.

In a 5 to 4 ruling with Chief Justice Roberts being the deciding vote, most of the Affordable Care Act (ACA) was upheld. The court ruled that the act's individual mandate was constitutional under congressional tax powers. The ruling largely ignores the argument that the individual mandate is a violation of the commerce clause.

The primary argument for opponents of the ACA focused on the individual mandate to purchase health insurance. They held that congress had overstepped its authority by requiring instead of regulating commerce. Opponents also argued that the purchase of health insurance was a personal choice.

Proponents of the ACA pointed to the right of congress to levy taxes and enforce commerce. Examples of which varied from the individual income tax to the EPA.

However, It did curtail a provision to sanction states that did not expand their Medicaid programs to include the poor under the ACA. In effect creating a toothless mandate since the federal government is prohibited from taking punitive measures against states who refuse to comply.

With this ruling, individuals without medical coverage, (beginning in 2014) can be assessed a tax that begins at $95 and increases every year until 2016 where a formula indexed to inflation is used.

What isn't addressed in the court's ruling were core structural issues with the ACA. Specifically, the Medicaid expansion provisions of the act now effectively void and the vague language concerning required coverage features.

Core to the argument of opponents of the ACA is the government requirement of an individual to be compelled to engage in commerce with a private commercial entity. Today's ruling ignores that argument in favor of the stronger argument of congress' right to tax. The language of the ACA mandate does treat the penalty as a tax and not a transaction.

Even proponents of the ACA admit the program is flawed but like the Medicare part D prescription program from a decade ago they claim it's better than the alternative.

It's not inconceivable that the future may hold low cost minimum coverage health plans with few if any benefits under the current ACA language. Such plans would not be unlike the minimum coverage auto insurance policies commonly seen in states that require auto insurance to register a vehicle.

Little attention has been given to what constitutes the minimum coverage outside of actuarial values concerning deductible and out of pocket expenses based on income. While pre-existing conditions are largely curtailed specifics of what constitutes the features of an effective health plan are vague at best. Likely part of the compromise made to garner insurance industry support, such concerns appear to be left to the insurer.

Proponents of the ACA have called today's ruling a victory for the President while the opposition has vowed to defeat it using legislative measures.

Obamacare as the ACA is commonly referred to by detractors will continue to be hotly debated in the coming months and is likely to be the major political issue of the coming Presidential election.