Thursday, March 29, 2012

Healthcare and The Court: GOP Tricked?

An interesting take on the current U.S. healthcare law Supreme Court challenge is offered by Robert Reich in The Business Insider: "The dilemma at the heart of the new law is that it continues to depend on private health insurers, who have to make a profit. Yet the only way private insurers can afford to cover everyone with pre-existing health problems, as the new law requires, is to have every American buy health insurance. This dilemma is the product of political compromise. The Administration couldn’t get the votes for a single-payer system. Not a single Republican would even agree to give Americans the option. But don’t expect the Supreme Court to address this dilemma. It lies buried under a constitutional argument. Those defending the law say the federal government has authority to compel Americans to buy health insurance under the Commerce Clause of the Constitution, which regulates interstate commerce. Those opposing the law say a requirement that individuals contract with private insurance companies is coercion. Unhappily for the Democrats, most Americans don’t seem to like the bill very much anyway. Many on the right believe it a threat to individual liberty. Many on the left object to being required to buy something from a private company. Obama and the Democrats could have avoided this dilemma in the first place if they’d insisted on Medicare for all, or at least a public option. After all, Social Security and Medicare require every working American to “buy” them. But because they are financed by payroll taxes they don’t feel like mandatory purchases. Americans don’t mind mandates in the form of payroll taxes for Social Security or Medicare. In fact, both programs are so popular even conservative Republicans were heard to shout “don’t take away my Medicare!” at rallies opposed to the new health care law. There’s no question payroll taxes are constitutional, because there’s no doubt that the federal government can tax people in order to finance public benefits. But requiring citizens to buy something from a private company is different because companies aren’t directly accountable to the public. They’re accountable to their owners and their purpose is to maximize profits. Even if private health insurers are organized as not-for-profits, there’s still a problem of public accountability. Moreover, compared to private insurance, Medicare is a great deal. Its administrative costs are only around 3%, while the administrative costs of private insurers are 30% to 40%. Medicare’s costs are even below the 5% to 10% administrative costs borne by large companies that self-insure. So why not Medicare for all? Because Republican strategy has been to demonize government and privatize everything that might otherwise be a public program financed by tax dollars. Then they go to court and argue that any mandatory purchase is unconstitutional. Obama and the Democrats should do the reverse. If the Supreme Court strikes down the individual mandate in the new health law, private insurers will swarm Capitol Hill demanding that the law be amended to remove the requirement that they cover people with pre-existing conditions. When this happens, Obama and the Democrats should say they’re willing to remove that requirement - but only if Medicare is available to all, financed by payroll taxes. If they did this the public will be behind them - as will the Supreme Court."  An interesting scenario indeed.  Was Obamacare designed to fail to trick the Republicans?  Read more at: Robert Reich