John Roberts: Health care hero?

July 9, 2012

Alan Maass analyzes the Supreme Court's decision on the Obama health care law--and says the law's supporters should be wondering about their unexpected ally.

THE U.S. Supreme Court upheld Barack Obama's health care law--thanks to the vote of a single justice who has been so reliably right wing, anti-civil liberties and pro-corporate power that he ought to be called the "Chief In-justice."

Chief Justice John Roberts was the swing vote in favor of upholding the most controversial part of the law--the so-called "mandate" that requires anyone who doesn't get health insurance through an employer or qualify for the government's Medicare or Medicaid program to buy a policy from a private insurer, with no guarantee that the coverage will be affordable or adequate.

In calling the Patient Protection and Affordable Care Act (PPACA) constitutional, Roberts agreed with the four Supreme Court justices who are generally considered liberals.

Had he sided with his fellow conservatives as usual, not only would the mandate have been overturned, but the entire law would have been struck down--since the conservative minority took the position that other provisions of the PPACA, particularly new regulations on insurance companies, depended on the mandate providing insurers with new customers.

Chief Justice John Roberts
Chief Justice John Roberts (Steve Petteway)

Relieved liberal supporters of the health care law celebrated the decision despite its unexpected source.

"Working people won a resounding victory," Service Employees International Union President Mary Kay Henry declared in a statement. Journalist David Cole wrote in the Nation: "You can't let the perfect be the enemy of the good. This is a law that will expand health care insurance to millions of Americans who didn't have it before." Nation editor Katrina vanden Heuvel headlined her blog post about the decision: "A beginning to the end of America's health care crisis."

Unfortunately, vanden Heuvel and the others are wrong. This isn't the beginning of the end, but the start of a new phase of the health care crisis--one in which many, many people will ultimately find themselves worse off as a result of the law Barack Obama calls a "historic" advance and touts as his central accomplishment of four years in the White House.

The health care law does include long-awaited and badly needed regulations on insurance companies--barring them, for example, from denying coverage on the basis of "preexisting conditions" and allowing households to keep children on family policies into their mid-20s. But there are loopholes in the regulations--and insurance industry lobbyists have been successful in weakening them further at the federal and state level since the bill was signed into law.

Moreover, even at their best, these reforms are outweighed by many other provisions that favor the medical-insurance-pharmaceutical complex at the expense of ordinary people--including the mandate that is designed to force millions of people into the arms of private insurers to buy defective coverage at inflated prices.

The mandate and other aspects of the PPACA won't be fully implemented for two years, but when that time comes, the health care crisis in the U.S. won't be over.

On the contrary, the scourge of for-profit health care will continue to plague working people in the U.S., leaving them one accident or major illness away from financial disaster. Fewer of them will be without any insurance at all. But because of the Obama health care law, many millions more will have coverage they can't afford--and which will fail them in essential ways when they need it.

FULLY UNDERSTANDING what John Roberts did in upholding the PPACA means dealing with the strange world of constitutional law, where the question was never whether the health care law is just or will help anyone, but if it complies with a Constitution written more than 200 years ago, long before almost everything associated with modern medicine existed.

The legal challenge--from officeholders in 26 states, all but one of them Republicans--focused on several issues, but the most important was the mandate.

Under the health care law, states will have to create "insurance exchanges" by 2014, where private insurers will sell policies to individuals and families who don't have employer-provided coverage and don't qualify for Medicare and Medicaid. The uninsured will have to buy from the exchanges or pay a penalty with their annual income taxes--set in the first year at $695 for an individual and up to $2,085 per family, or 2.5 percent of household income, whichever is greater.

The Obama administration argued that the federal government is within its authority to impose the mandate because of a passage in the Constitution called the "commerce clause," which basically allows the government to regulate activities related to the economy and business. The Republican challengers insisted the health care law created a penalty for people who choose not to engage in "commerce"--and therefore, the mandate was unconstitutional.

The arguments and counterarguments about this ran for hundreds of pages, but to make a long story short, four conservative justices sided with the Republicans, and the four more liberal justices generally supported the Obama administration.

That left John Roberts in the middle, where he basically made up his own legal reasoning--and because he was the swing vote, his interpretation is the final word. Roberts agreed with the conservatives that the health care law exceeded the government's authority under the commerce clause. But he then flipped around and said the mandate was constitutional if it was seen as a tax--since the penalty for not having insurance is to be paid with income taxes.

Thus, Roberts upheld a law mainly championed by liberals with a conservative reading of the Constitution--one that potentially throws into question other laws, from the Clean Air Act to civil rights laws to most regulations on corporations, that have been upheld in the past based on the commerce clause.

So the ruling on the mandate has some very conservative implications, even though the outcome was denounced by most conservatives. And on top of that is a less-discussed aspect of the decision: The justices weakened one of the law's most positive provisions--the expansion of the Medicaid health care program--on the grounds that it was a violation of state's rights.

Many of the people who will gain insurance coverage under the PPACA will be enrolled in the government's Medicaid program for the poor under expanded eligibility rules. The health care law increases the threshold to qualify for Medicaid to 133 percent of the official poverty line--and it provides additional funding to state Medicaid programs, along with rules about how the system should be run.

In this part of the health care decision, seven justices, spanning the liberal and conservative wings of the court, ruled that it was unconstitutional to threaten states with losing current Medicaid funding if they didn't implement the expansion. Effectively, the Supreme Court gave state governments the right to opt out of expanding Medicaid to cover more of the poor and working poor--and they did so on the grounds that the federal government was infringing on state's rights, the same argument used to justify everything from Jim Crow segregation to bans on same-sex marriage.

ROBERTS' VOTE to uphold the PPACA was a surprise to the conventional wisdom that the Supreme Court would likely strike down the health care law by a 5-4 vote of the court's conservatives versus its liberals.

One explanation for Roberts' vote was that he was concerned about the legitimacy of the Supreme Court as a political institution after a series of partisan wrangles, including the Bush v. Gore case, in which a 5-4 vote split along "party lines" stole the 2000 presidential election from the rightful winner, Al Gore. "Sharply divided partisan decisions like Bush v. Gore and Citizens United appear to have done damage to the Court's legitimacy--and ultimately, its legitimacy is the source of the Court's power," wrote David Cole.

There's an element of truth to this point. But Roberts' long history as a mouthpiece of the conservative establishment suggests he wouldn't have found a way to uphold the PPACA if there wasn't substantial support for keeping the law among the political elite he comes from and the business elite he has always fronted for.

Because contrary to the Republican tirades against "Obamacare" as a government takeover that that threatens private enterprise, the health insurance industry wasn't entirely against the law.

Industry spokespeople were very disciplined about their message before the Supreme Court decision. They didn't say that insurers wanted the law upheld or struck down. What they did say was that either the whole law should be determined constitutional, or the whole law should be thrown out. If the mandate was struck down, then insurance companies wanted the rest of the law overturned, too--they claimed the new regulations regarding "pre-existing conditions" and the like would have "bankrupted" them if they weren't guaranteed a new pool of customers via the mandate.

That's exactly the position the four conservative justices took--and they would have had their way if Roberts had joined them. So there was never much chance that the rotten centerpiece of the health care law--the mandate--would be thrown out, but the new regulations on the insurance companies would remain.

The goal of the insurance giants was to have a win-win situation: Either way the court decided, they would have an outcome they could live with--the status quo or a health care "reform" law twisted to meet their needs ahead of people.

This was the attitude of the industry all along, as reported:

From the start of the debate over the health care law, the insurance giants used a two-pronged approach to make sure their interests were served. Representatives of the corporations worked with the Obama administration in the early stages--and even more closely with Democratic members of Congress like Sen. Max Baucus--to shape health care legislation to their liking.

At the same time, the industry kept up a stream of criticisms of Democratic proposals and encouraged the Republicans' total opposition to all reform--including support for mobilizing the GOP base at events like legislators' town hall meetings.

The aim was to have it both ways--if the health care bill passed, it would be business-friendly, and if it lost, opposition to reform would have the appearance of a popular mobilization.

The main outlines of the eventual law were written by Senate Finance Committee Chair Max Baucus' staff--chiefly, Elizabeth Fowler, a former vice president of the insurance company Wellpoint. This guaranteed that the industry's interests would be safeguarded in the law itself.

Meanwhile, the corporations gave aid and comfort to the Republican-led campaign to defeat any form of health care legislation. The aim was to box in the Democrats--to scare them away from considering tougher measures against insurance companies, and, after the law passed, to increase the pressure on regulators at the federal and state level to "interpret" the provisions of the PPACA with a pro-business slant.

If the Supreme Court conservatives overturned the law in its entirety, the insurance industry could go back to the highly profitable status quo, with the idea of health care "reform" discredited in the eyes of large numbers of people. But if the law survived with the mandate, then the health care bosses would be poised to cash in.

THE MANDATE in the health care law guarantees private insurance companies millions of new customers--and billions of dollars in government subsidies for those customers. But it doesn't guarantee that insurers will provide adequate coverage to those who buy mandated policies.

Under the PPACA, most people who buy insurance through the newly established exchanges will get subsidies to cover part of the cost. Still, according to the estimate of Physicians for a National Health Program (PNHP) when the law passed, the previously uninsured will pay up to 9.5 percent of their income for policies that cover only 70 percent of health care costs.

In an interview with SW in 2010, PNHP co-founder Dr. Steffie Woolhandler described how mandated insurance was playing out in Massachusetts, where then-Gov. Mitt Romney established a system built around the requirement for all uninsured residents to obtain coverage:

For someone in their mid-50s, the cheapest policy available that would meet the mandate for someone who is paying the full rate--which is anyone who makes more than $33,000 in income a year--costs more than $5,000 per year in premiums. Then, if you get sick, there's a $2,000 deductible--so you have to take another $2,000 out of your pocket before the insurance kicks in. And then, for the next $15,000 in health spending, you're responsible for 20 percent of everything--$3,000.

So it's extremely expensive if you get sick and have to use it once you buy it. That means that many people will still lack access to care--because they won't be able to afford to use their insurance policy, even if they own it.

That's a preview of what the federal health care law will look like for the millions of people who will be required to buy policies from private insurers. And meanwhile, the companies will be raking in huge sums--including an estimated $447 billion over 10 years in federal government subsidies alone.

The insurance policies sold through the exchanges will be subject to government regulation--this is supposed to stop the worst insurance company abuses. But Corporate America is as skilled at getting its way from the government bureaucracy as it is from elected officeholders.

For example, within months of the PPACA being signed into law, companies had targeted a provision requiring insurance programs to spend at least 85 percent of premiums on actual health care costs rather than administrative overhead. Fast food giant McDonald's told the government it couldn't meet this standard and would drop coverage for 30,000 workers unless it got a waiver. Barack Obama's Department of Health and Human Services delivered the waiver.

Many of the positive measures in the health care law have been weakened in similar ways. For example, insurance companies are barred from refusing to cover people because of "pre-existing conditions." But when the law was being written, the companies won the right to charge different rates for different groups of people. So they can make insurance unaffordable by charging up to three times more from older customers than younger ones--and thereby continue discriminating against people they don't want to cover.

This is the twisted logic at the heart of this parasitic industry: The insurers' highest priority--more so even than gaining new customers--is to not provide health care coverage to the people most likely to actually need health care.

There's also a pitfall in the health care law's expansion of the Medicaid program for the poor--even before the Supreme Court weakened it. Medicaid is expected to provide health care for almost half of those who gain coverage under the PPACA. But the new enrollees will enter a program that is being systematically cut back in state after state--again, with the approval of the federal government.

For example, last year, the Obama administration approved huge cuts in California's Medi-Cal program--payments to doctors, dentists, clinics and nursing homes will be further reduced. California, of course, isn't one of the states run by Republicans who are threatening to use the Supreme Court decision to opt out of the Medicaid expansion. Gov. Jerry Brown and the Democratic majority in the state legislature are responsible for hollowing out Medicaid.

ONE OF Barack Obama's central messages during the debate about health care was that the new law wouldn't affect people who get health care coverage through their employer. "If you like your health care plan, you can keep your health care plan," he was fond of saying.

But Obama left out a few points. First of all, what about the millions of workers who--after years of companies shifting the burden of health care costs onto employees through contributions, co-pays and deductibles--don't like their health care plan? They're stuck with what they have--the health care law doesn't give them an option to seek better coverage.

Moreover, the PPACA will directly contribute to the long-term trend of employer-provided health care becoming more expensive for workers and less adequate in providing access to care.

One way is a steep new tax on so-called "Cadillac" health care plans. Starting in 2018, insurers will have to pay a 40 percent tax on health insurance where the policies are "too good"--plans where the value exceeds $10,200 a year for individuals or $27,500 a year for families. Lawmakers consciously intended for insurance companies to pass this huge cost on to employers--as an incentive for companies to switch to a lower-cost plan that comes in under the excise tax threshold.

But "lower-cost" means more restrictions on benefits, higher co-pays and higher deductibles. In other words, the authors of the health care law want companies to continue shifting the health care burden onto workers.

The justification for this is that the excise tax would help control the rise in health care costs, which grow far faster than the overall inflation rate each year. But instead of putting restrictions on insurance company super-profits or spending on internal bureaucracy, Washington's method for controlling health care costs is to make workers pay.

The plans that will be hit by the excise tax aren't all that exceptional, either. One research study conducted as the health care law was being written found that Blue Cross/Blue Shield standard plans--which cover nearly half of all federal employees--would cross the "Cadillac tax" threshold in the first year for individuals and the third year for families.

The effect of all this will be to shift more and more people away from halfway decent health insurance--and into the inadequate, bare-bones plans that are so frustrating for anyone covered by them, but so profitable for the insurers.

Much more could be said about the problems with the health care law--both those that are already clear and those that will emerge in the years to come. But this much should at least show the stark contrast between the expectations when Obama took office for a fundamental transformation of the health care system--and the dismal reality of a law slanted much more toward the interests of the insurance industry.

This isn't the "beginning to the end of the health care crisis." On the contrary, the same problems of inflated costs and restricted access will continue to weigh on millions of people. Building protests around local examples--like the successful battle for undocumented immigrants in need of organ transplants to get care at Chicago hospitals--will be critical in exposing the truth about a health care law that puts insurance company profits before people.

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