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JUNE 28, 2012 12:04PM

Obamacare as Kabuki: Everybody Wins b/c SCOTUS Bailout

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It's pretty funny how in an election year, everything is about winning politically, instead so often the substance of what is actually decided, in which Obamacare is the classic case.

The President really didn't want to make the argument about taxes, which is what Obamacare's "dreaded individual mandate" has always been, and its preferred rationalization as to Constitutional legitimacy under the Commerce Clause was totally rejected.

On the other hand, in the Kabuki of an election year, the Supreme Court bailed out Obama by doing what it has the right to do, and constructing the statute in a way that allowed the mandate to go through for what it is: a tax on those with enough income who don't buy insurance.

That's actually reasonable if one recognizes that parts of the health system are like the base load of an electrical system: always on, e.g. emergency rooms.

If in fact hospitals that serve the poor and uninsured, not the same thing, were paid out of funds raised by the tax, or enough people were induced to purchase policies with reasonable if not low deductibles, that would be a good thing, as to cost-shifting and institutions like Cooper Green in Birmingham, Alabama being saved from going out of business.

There will be curious effects along those lines in the private insurance industry one would think.

What did not get a lot of attention was the rejection by the Court of what was actually the most "impactful" part of "Obamacare," which was the Medicaid expansion.

There, in the everyone wins Kabuki, the Court bailed out the States who complain that to be threatened with the loss of 10 per cent of their State budgets on average would, as Justice Roberts colorfully put it,  "have a gun at their head."

Thus, Obama evaded what would have been a bad loss by being able to say that the law in total was not overthrown, and the Republicans can now complain about that, even as the most important part of the law from a financial sense got pitched out, i.e. the Medicaid expansion program: everyone wins Kabuki, and highly functional.

Guess our lawyers know how to read consequences as well as law too, and de facto come to compromise decisions.


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