The past week’s Supreme Court ruling on the constitutionality of ObamaCare is a tragedy on at least two counts. The first tragedy relates to the relationship between our Federal government and the citizens who are subject to its will. The second tragedy relates to the healthcare system itself, and affects all of us who seek, deliver and pay for care. It is hard to say which is the greater.
Let’s address the legal implications first. We are not lawyers nor do we pretend to have any special insights into law or the constitution, but some common sense conclusions are inescapable.
The first conclusion is that the law passed by the Democratic party-dominated Congress of 2010 and President Obama establishes a precedent for the taxation of any activity – or inactivity – that future legislators and Presidents deem to be undesirable. Although much has been made of the Supreme Court striking down the power of Congress to penalize the non-purchase of health insurance by use of its ability to regulate Commerce, it seems to us that this is a distinction without a difference. As written, the Affordable Care Act law says that the Federal government will impose a penalty on anyone who is uninsured. Now the law has been interpreted by the Supreme Court to impose a tax on anyone who is uninsured. If you’re in the class of individuals affected it’s pretty difficult to discern how one is any better or worse than the other.
Given this turn of events it certainly seems as if there is absolutely nothing that Congress cannot choose to tax or not tax in order to reward or punish anyone it pleases. It is now clearly within the power of Congress to support the government’s and union’s ownership of General Motors (as well as to support “green” business initiatives) by offering to tax anyone who fails to purchase a Chevy Volt. Slovenly and unsightly couch potatoes can be taxed for failing to purchase and regularly view the entire series of “Brazil Butt Lift” DVDs. The housing industry would clearly be stimulated (and thereby improve the unemployment rates nationally), by imposing a tax on anyone who does not own a home. The possibilities for social and economic engineering are unlimited. No longer does the government need to fund economic activity that it deems desirable – it can simply tax any social or economic behavior that it finds undesirable. Anyone who might doubt that this sort of thing would actually happen need only look to California for examples of publicly mandated investment. Recently the California Energy Commission mandated new standards for housing construction starting in 2014:
…including a rule that all new homes have roofs equipped for solar paneling. The panels are still optional—for now.
Other highlights: Ceiling fans, hot water pipes, air conditioning units and even the sunlight exposure from windows will now be regulated. Lighting systems must be controlled by sensors, roofs must be slanted in the right direction to have full access to the sun, and sunlight must not be impeded by chimneys and skylights…
The new rules will increase the average construction cost of a new California home by an estimated $2,300…
“So what?” many will ask. Clearly some of this has been going on for generations. Cigarettes and alcohol have been taxed for donkey’s years as a way of encouraging temperance and discouraging lung cancer and chronic obstructive pulmonary disease, and for the most part no one bats an eye.
But the Supreme Court’s decision on ObamaCare clearly enlarges the scope of behavior-based taxes beyond anything we’ve seen before. Instead of being taxed for doing something, the way is now clear to tax Americans for not doing whatever it might be that is deemed to be unpatriotic at the time.
“But wait a minute,” others will say, “This very blog has come out strongly in favor of universal healthcare coverage, and even for taxing every non-poverty-stricken American in order to help pay for it. Where is the consistency there?” A fair point, but there is a big difference in taxing people in order to help fund the delivery of a good or service that will directly benefit them, and taxing someone strictly in order to punish them economically for failing to purchase for themselves something that a politician or lobbyist deems to be desirable.
But let’s move on to the healthcare tragedy created by the Supreme Court’s ruling. What’s different today that wasn’t the case last week, last month or last year?
What’s different is that the disaster of the Affordable Care Act (ACA) is now guaranteed to continue at least until the November presidential election, and possibly for many years beyond. It has become impossible to move on. There is, at least for the next few months to years, no way of doing things right. No way to save billions of dollars in needless expenses, of improving the efficiency of care, or of insuring American’s constructively. With a stroke of Chief Justice John Roberts’ pen, the Court’s decision has made us much, much poorer – both medically and financially.
The financial loss the nation has suffered (and will continue to suffer) is hard to quantify, but is hardly abstract. The cause of this loss is simple: uncertainly.
There is certainly no need to even begin to document all of the misguided and counterproductive features of the ACA in this post. Simply search The Road to Hellth for “ACA” and you’ll find scores of examples. Still better, click on over to The Covert Rationing Blog and read Dr. Rich’s book-in-progress “Open Wide And Say Moo! – The Good Citizen’s Guide To Right Thoughts and Right Actions Under Obamacare” – a series of essays that is probably the most insightful work on the topic that exists today. But among those features are a host of provisions that practically ensure the long term failure of ObamaCare no matter what the outcome of the November election might be. These range from giving employers financial incentives to dump millions of workers onto federally subsidized insurance exchanges, to increasing the federal budget deficit by at least $500 billion over the next ten years, to increasing the cost of premiums by mandating elaborate benefits for buyers of all health insurance policies (including “bronze” plans) while simultaneously making it difficult or impossible for Americans to utilize healthcare savings accounts, to demanding that $500 billion be cut from Medicare without a corresponding reduction in benefits, to an astonishingly poorly conceived and destructive tax on the gross sales of makers of medical devices.
When something as basic and as economically important as healthcare is seen to be essentially unstable and unsustainable, rational people will defer investing in healthcare until a path to stability is clear. All sorts of decisions are put on hold. Entrepreneurs stop innovating – they have no idea whether their creations will be politically or economically practical in the future. Employers stop adding employees in order to reduce their exposure to increases in health insurance costs. Business creation goes into hibernation until long-term costs become clearer. Families defer spending. The ripple effects go well beyond healthcare into the national and world economies.
By upholding the ACA, the Supreme Court has simply delayed the ultimate failure of ObamaCare and the implementation of a better, more affordable, more efficient and sustainable healthcare system. We’re going to have to wait until our healthcare system self-destructs in order to save it.
That’s the real healthcare tragedy here.