SCOTUS Ruling on Health Care: Clarity and Complexity for the Future

Written by Bill Pierce, Guest Contributor | 29 June 2012

One thing is clear about the recent Supreme Court decision regarding the Affordable Care Act, it did not disappoint for the millions of people in the United States and around the world who were hoping for a blockbuster decision.

While the conventional wisdom held that the Court would rule against the individual mandate and deal President Obama a political loss, there were a very few who thought the opposite. But what no one expressed, at last publically, was that the Court would uphold the law and use Congress' tax and spend authority to do so. Although the taxing authority was part of the brief and arguments made to the Court by the Administration, it was a minor issue. Additionally, the President made public comments saying he did not consider the mandate to be a tax. This will have an impact going forward and makes the next few months clear.

Congressional Republicans now have a very specific target – the mandate is a tax and politically being anti/lower tax has always been a good and often winning strategy for Republicans. So look for the GOP to hit the tax issue hard in the months leading up to the November U.S. election. They will tie the mandate tax (and other taxes in the law) to the poor economy and slow job growth. And they will then say the only way to get the economy back on its feet is by electing a new president and GOP majorities in the House and Senate and that only Republicans will get rid of these taxes. This will energize the base. Calling for lower taxes always does.

For Romney, the situation is a little trickier since the Massachusetts law includes a mandate and now a tax as defined by the Supreme Court. Over the last several months Democrats have been trying to tie Romney to the ACA through his role in passing the Massachusetts health reform law, going so far as calling the Massachusetts law a model for the ACA. The SCOTUS ruling will only provide them more ammunition. However, it seems apparent that Romney will continue to justify the Massachusetts law and his role in it, by using the states' rights argument favored by Republicans. Each state has the right to do as it believes is best.

For Democrats the path forward is tricky. While a short-term political victory for the president in that the Court upheld the law, by using the taxing authority and thus labeling the mandate a tax, they will have to battle the age-old charge that Democrats are nothing more than "tax and spenders," a label President Obama has been trying to cast off since he took office. Democrats therefore, besides fighting a rearguard action against the tax charge, will have to go on offense saying that now the country can move ahead and fully implement the law and bring health insurance and health care to more than 30 million Americans who do not have coverage. For supporters it is hoped he will work hard to "sell" the law to the country, as they believe that once the law passed, he abandoned the cause and did a poor job of supporting it. This decision should boost the Democratic base.

The impact of the actual decision has two parts and it's complicated.

The easy part is that the Medicaid ruling, saying the federal government can't coerce the states to expand Medicaid eligibility under the threat of taking away funding, means the Medicaid expansion will be much slower. This will provide states will more flexibility on the timing of an expansion as well as deciding the fundamental question of whether they will expand Medicaid at all. Therefore, any expansion can be expected to slow down from previous projections. So getting to 30 million new Americans with health insurance could take some time.

The tricky part is the mandate ruling. By defining it as a tax, this will make it more vulnerable to be modified or repealed using the budget reconciliation process. The reason: the reconciliation process requires only 51 votes to pass in the Senate (unlike all other legislation which must meet a 60 vote threshold due to filibuster rules), but it has its limitations in that it cannot be used for making policy, only tax and budget matters. So repealing other parts of the law using reconciliation is not likely no matter what politicos say. Recall that the law finally made its way through Congress using the reconciliation process because Scott Brown's victory broke the Democrats filibuster proof majority. Democrats were unable to hold a conference report to negotiate a final bill so they used reconciliation, which meant the changes they made were limited.

What this means then is Republicans must win the Senate majority and the White House, because even if they control the Senate, if the GOP does not win the White House, a re-elected President Obama is not likely to sign a bill that guts his signature policy achievement.

Hold on tight – there is still a wild ride ahead.

William Pierce is a senior director in APCO Worldwide's Washington, DC office. Mr. Pierce specializes in advising health care clients; his work includes policy development, issue advocacy, message development, crisis communication and media relations. This post is adapted from his contribution to APCO's Virtual Vantage Points Blog.