Supreme Suspense

e21 | Published on June 13, 2012

By James C. Capretta

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Very soon, the Supreme Court will be rendering judgment on the constitutionality of ObamaCare. It is one of the most highly anticipated decisions in decades, and for good reason. Whatever the outcome, it’s going to be a political earthquake. The only question is the degree to which it will shake up the political and policy landscape.

Of course, at this point, only a handful of people have any idea how the court will rule, and they aren’t talking (or at least one presumes — and hopes — they aren’t). So there’s no real way to predict what the Court will decide.

Still, it’s possible to boil down the various scenarios to a handful that capture the most likely outcomes, and to examine the implications of those scenarios through both a policy and a political lens. Indeed, for those who have spent the past three years opposing ObamaCare, it’s critically important to be prepared for all eventualities because what the key players in this drama say and do in the days after the Court issues its decision could be just as important as the decision itself to the future of ObamaCare and American health care.

Scenario 1: The Court Upholds ObamaCare. What if the Court doesn’t strike down any provisions of ObamaCare? This is the scenario conservatives are loath to consider but ignore at their peril. It is certainly possible that the Court will find ObamaCare within the bounds of existing constitutional law, despite the many flaws in the administration’s legal defense that were exposed during oral arguments. If that happens, it will be seen as a severe blow to the ObamaCare opposition because so many conservatives have invested so much energy in the two-year-long legal case. Indeed, losing at the Supreme Court will be, inevitably, a deflating experience for the ObamaCare resistance. It won’t help that the President and his allies will trumpet the decision as vindication of their efforts and argue that it is time for opponents to “move on” from their intransigence and accept ObamaCare as the law of the land. The media is certain to echo such sentiments.

All of this may lead some current ObamaCare opponents to think about throwing in the towel. That would be a terrible mistake. Yes, it would help tremendously if the Supreme Court would throw out ObamaCare in its entirety. That would immediately clear the decks and allow a sensible, market-based approach to reform to be considered and implemented. But the Court itself cannot write a better health care law; it can only render judgment on the constitutional merits of what Congress has already passed. And even if ObamaCare were wiped away, the battle would not be won. That’s because the pre-ObamaCare status quo is unsatisfactory too, with problems that most Americans want to see addressed. Thus, no matter what the Court decides, the road to ultimate victory runs back through Congress. If the Court leaves ObamaCare in place, it just means that full repeal must be accomplished through legislation — along with enactment of a far better replacement.

No doubt that means the job will be slightly more uphill than if the Court struck down ObamaCare, but it’s far from impossible. If former Massachusetts Gov. Mitt Romney succeeds in his effort to become the nation’s next president, repeal and replacement of ObamaCare in Congress becomes not just a theoretical possibility but more likely than not. Therefore, regardless of the Court’s ruling, ObamaCare’s opponents need to be thinking in terms of winning the health care argument in the 2012 election.

And that means becoming more credible on a replacement. If ObamaCare is upheld by the Court, it will be very important to become credible quickly, lest the sense emerges that the choice is between the ObamaCare status quo and nothing. By necessity, Gov. Romney will carry the heaviest load in this regard, as the congressional GOP has too many voices to speak clearly on this subject. In the aftermath of the Court’s decision, it will be up to Gov. Romney to make the case that repeal is as necessary as ever, and that he would advance an alternative plan which solves the problems in American health care without the coercion and massive expense of ObamaCare. It will be particularly important for his replacement program to credibly address the problem of people with pre-existing conditions finding it impossible to get affordable insurance coverage, as well as the problems of cost escalation and the uninsured. There are many different policies that could be pursued to achieve these goals. It matters less that Gov. Romney settle on one approach versus another than that he settle on a credible one and make it a top priority. (For more on how to replace ObamaCare, see this National Affairs article, which I coauthored with Robert Moffit.)

 

Scenario 2: Only the Individual Mandate Falls. The Court could strike down the individual mandate as unconstitutional while leaving the rest of the law in place. This would seem to be the safest place for the Court to land, if the justices in the majority were in a political frame of mind, as it would remove the most constitutionally suspect provision without getting the Court involved in any other aspects of the legislation passed by Congress.

Ironically, an “only the mandate goes” decision would defy the explicit request of the administration’s lawyers, who told the Supreme Court and lower courts repeatedly that, if the mandate were struck down, other important parts of the law (guaranteed issue and community rating specifically) would have to go too. This argument from the administration was almost certainly a legal tactic, not a matter of firm conviction, because, if accepted by the Court, it would mean dismantling an even larger portion of ObamaCare than if the Court severed the mandate from the rest of the law. Presumably, the administration advanced this argument against its own self-interest to turn up the heat on the Court (“If you strike the unpopular mandate, you have to strike the popular insurance protections too!”).

But if the Court defies the administration and strikes down just the mandate, conservatives should not be surprised to hear the administration flip its point of view immediately and make the case that the law can survive without the mandate. Some administration surrogates are already laying the groundwork for this reversal by suggesting the law can be made to work without the mandate.

To be sure, another high-profile flip-flop on the mandate by this president will come under withering criticism, as it should. But that won’t stop the administration from reversing its position.

So conservatives need to be ready for this scenario. For starters, they need to view a decision by the Court to strike down the mandate but leave the rest in place as a huge victory. Yes, it would be better if the Court were more aggressive and struck down the entire law. But striking down the mandate will still leave ObamaCare very much on the ropes. It will be up to congressional Republicans and Gov. Romney to make the case that the rest must go too.

That might be a challenge in some quarters, as the most unpopular provision is the individual mandate. Once it is gone, some currently in the opposition camp may drop their resistance to the rest of the legislation. So it will be up to congressional Republicans and the Romney campaign to battle against this kind of inclination and make it clear that the rest of ObamaCare is awful too. This will require repeating as often as necessary the laundry list of bad ideas: the taxes, the Independent Payment Advisory Board, the Medicare cuts, the massive entitlement expansion, and the massive regulatory powers now housed in
the Department of Health and Human Services. If just the mandate is struck down, all of that remains and must continue to be fought by ObamaCare opponents.

But even as a “mandate only” decision would leave those provisions in place, it would also add to the momentum for full repeal in the legislative arena. Without the mandate, every credible model will show severe adverse selection in the state exchanges, which would be completely consistent with what occurred in those states (including Washington, Kentucky, and Maine) that tried to implement guaranteed issue and community rating in a voluntary insurance system. The sick signed up for coverage while many of the healthy did not. Premiums and public subsidies soared, and the insurance system became more and more unstable over time. Opponents can point to this record and argue with absolute credibility that this is what will happen under ObamaCare with the mandate stripped out.

A decision to strike down the individual mandate will also be a severe psychological and political blow to ObamaCare, leading more of the electorate to view the entire effort as suspect. Conservatives must be ready to capitalize on this shifting sentiment by promising with conviction to finish the job in the political and legislative arena. Their main argument must be that the law was a misguided effort from the start, and now, with the mandate gone, it is completely unworkable and threatens to blow up the insurance system.

To drive this point home, it will be important for the House to stage new votes on full repeal quickly after the Court issues its opinion to capitalize on the political momentum that striking the mandate will create.

 

Scenario 3: The Court Strikes Down the Mandate and Other Provisions Too. The Court could go beyond the mandate and strike down other, related provisions of the law, including guaranteed issue and community rating, but perhaps also the entirety of Title I (which includes the state exchanges and the system of paying premium credits to individuals). This kind of a decision will of course be a stunning victory for the opponents of ObamaCare, as most of the core of ObamaCare would be removed. But not all of it would be erased from the books. ObamaCare’s pernicious tax hikes, expensive Medicaid expansion, and micromanagement of the Medicare program would all remain in place.

Building the momentum necessary to repeal these provisions after the Court ruling will be a challenge. No doubt some air will be out of the repeal balloon, as many opponents would view such a decision as an incredibly satisfying victory. To build momentum to finish the job, the key will be to present the public with an alternative vision for the entitlement programs (Medicaid and Medicare).

Fortunately, both the House GOP and the Romney campaign have demonstrated their willingness to take on the entitlement reform challenge. Clear contrasts can be drawn with the ObamaCare approach. Instead of herding millions of American citizens into a Medicaid program which is already overburdened and dysfunctional (as ObamaCare would do), conservatives should champion an alternative plan that would give low-income Americans access to the same kinds of private health insurance options that workers have access to today through their employers. And in Medicare, instead of relying on government price controls that will lead to access problems, the alternative vision would be to give seniors the same kind of choices in the non-drug portion of the program that they enjoy in the drug benefit.

 

Scenario 4: The Court Strikes Down the Entire Law. If the Court were to strike the entire law, it will stand as one of the most important and courageous Supreme Court decisions in many decades, and almost certainly have constitutional implications for years to come.

In the shorter term, it would be a devastating blow to the Obama administration’s ambitions to expand the federal government’s power and reach, and almost certainly complicate the president’s reelection plans. Some analysts have predicted that this kind of decision will so ignite outraged ObamaCare supporters that the resulting backlash against the Court will help President Obama in November. That seems highly unlikely. If the Court strikes down the entire law, it will be clear that the president’s signature initiative — something that essentially consumed the administration for the better part of three years — was an enormous waste of the county’s time and energy. It will be incredibly deflating to the president’s supporters and make the administration look ineffectual and weak. That’s not a recipe for political success.

ObamaCare’s opponents will need to be ready to address two issues that will immediately present themselves. First, what happens to all of the people who are benefitting from the “early provisions” of ObamaCare? That is, do the young adults (up to age 26) still get to stay on their parents’ insurance? And what about the regulations which prohibit insurers from imposing annual and lifetime limits on certain kinds of coverage? No doubt the media will try to corner the congressional GOP and the Romney campaign on these kinds of questions in the aftermath of a Court decision to strike down the entire law.

The GOP response should not be at all defensive, and there should be no rush to re-impose the provisions just struck down by the Court through a new legislative process. That’s not likely to be necessary, anyway, as most of the insurance plans that were written under the ObamaCare rules will remain in place as-is through at least 2012 and many well into 2013. Thus, there is plenty of time to think through how best to ensure that people with insurance today aren’t harmed by the Court decision, and the GOP should promise to address that question expeditiously but methodically in the remaining weeks before the November election.

The media will also press the GOP and Romney campaign on what they will do, now that ObamaCare is no more. Here, the temptation among some conservatives will be to play “small ball” and offer up a series of micro-initiatives that would be beneficial but won’t fundamentally solve the problem. That would be a mistake. If the Court strikes down ObamaCare, it won’t be long before voters remember what they didn’t like about the pre-ObamaCare status quo: The rapidly rising costs. The insecurity of insurance coverage. The large numbers of uninsured. If ObamaCare is brought down, the GOP will have a once-in-a-generation opportunity to advance a credible and practical alternative that will fix the problems in American health care the right way instead of with government coercion and massive spending programs. That kind of reform plan will harness the power of a functioning marketplace to deliver better care at less cost. Such a reform plan will necessarily entail some controversy and political risk. But there will be no better time than in the aftermath of ObamaCare’s demise to advance it. The country wants solutions in health care, and if the GOP is able to offer them, it will mark a historic shift in the perceptions of the major political parties.

James C. Capretta is a visiting fellow at the American Enterprise Institute,a fellow at the Ethics and Public Policy Center, and project director of ObamaCareWatch.org.

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