The Health Care Ruling Doesn't Worry Me

Read here for Jonathan Cohn on why we shouldn't freak out about the ruling.

Conservatives are jubilant that a Republican judge in Virginia has agreed with their contention that the individual mandate, formerly a pillar of Republican health reform proposals, is unconstitutional:

“Today’s ruling is a clear affirmation that President Obama’s health care law is unconstitutional,” Virginia Rep. Eric Cantor, the presumptive House majority leader next year, said in a statement. ...

“Today is a great day for liberty,” Utah Sen. Orrin Hatch proclaimed.

Richard Epstein writes, "Obamacare Is Now On The Ropes."

But it's not on the ropes. First of all, the mere fact that one Republican judge, Henry Hudson, has agreed with the party does not mean that all five Republican justices on the Supreme Court -- one of whom, Anthony Kennedy, does not always tow the party line -- will do so. Hudson is also a very Republican kind of judge:

Hudson's annual financial disclosures show that he owns a sizable chunk of Campaign Solutions, Inc., a Republican consulting firm that worked this election cycle for John Boehner, Michele Bachmann, John McCain, and a whole host of other GOP candidates who've placed the purported unconstitutionality of health care reform at the center of their political platforms. Since 2003, according to the disclosures, Hudson has earned between $32,000 and $108,000 in dividends from his shares in the firm (federal rules only require judges to report ranges of income).

I don't think Hudson ruled as he did for financial reasons. I think his financial interests are a window into the fact that he's unusually likely to bend over backward to accept Republican arguments.

Second, even given the above, Hudson conceded that striking down the individual mandate would not invalidate the whole Patient Protection and Affordable Care Act. If you strike the individual mandate but leave the rest, you have a system that could easily be patched up with a better mechanism to avoid free-riding. The real loser here is the health insurance lobby. Health insurers would have preferred to avoid any health care reform at all. But the health insurance lobby's second-highest priority would be a working system with an individual mandate. A world in which they cannot discriminate against sick people but in which healthy people can avoid buying insurance until they're sick is a nightmare.

The health insurance lobby spent tens of millions of dollars to defeat health care reform. They have a lot of pull among Republicans. A system that gouges the health insurers but keeps in place the subsidies and regulations liberals want is not a status quo I see lasting very long.

Reform 2, Repeal 1: Judge Rules Against Affordable Care Act (Updated)

A federal district judge in Virginia has become the first to rule that one key provision of the Affordable Care Act is unconstitutional. I haven't readthe decision carefully. But it appears that the judge believes that the federal government cannot require that all Americans have health insurance.

The government has argued that the constitution grants such authority via the power to tax and the power to regulate interstate commerce--an argument with which I, and quite a few legal experts, happen to agree. The judge, Henry E. Hudson, apparently sees things differently.

Hudson's decision was not a slam-dunk for repeal. He explicitly rejected arguments that the Affordable Care Act could not stand without the individual mandate. Of course, how well (if at all) the law could actually work without the mandate is a separate question. 

Hudson's ruling is not unexpected. He is a Republican appointee with a history of conservative rulings. Nor is it definitive. Two other federal district judges, Democratic appointees both, have already ruled that the entire law passes constitutional muster. A fourth decision, by a judge in Florida, is expected by year's end.

Most legal experts expect that, eventually, the case will come before the U.S. Supreme Court. Hudson himself acknowledged as much, writing “The final word will undoubtedly reside with a higher court."

And how might the five Republican appointees and four Democratic appointees on the Surpeme Court rule? Most court observers I know believe that at least one of the Republican appointees, most likely Anthony Kennedy, would agree with the government that the Affordable Care Act falls well within traditional boundaries of the taxing and interstate commerce powers. (For an example of such logic, see the Michigan ruling from a few weeks ago.)

I tend to think those experts are right, for reasons I'll get around to explaining one of these days. Then again, I recall hearing similar confidence about another highly anticipated court ruling--one about, oh, ten years ago.

For more on the mandate and some varied opinions on how an adverse ruling by the Supreme Court might affect the Affordable Care Act overall, see Aaron Caroll, Jonathan Gruber, Ezra Klein, and Igor Volsky. 

Meantime, if you're looking for a more generic primer on the individual mandate, I highly recommend this video from the Kaiser Family Foundation.

(Updated at 2:15 p.m.)