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A Huge Bailout for Another Failing Industry

ObamaCare as Corportists United

by CLARK NEWHALL, MD

In an eagerly anticipated opinion on the Patient Protection and Affordable Care Act, colloquially known as “Obamacare’, an unusual alignment of justices upheld the Act nearly entirely.  The crucial part of the decision found the ‘odd bedfellows’ combination of Chief Justice Roberts joining the four ‘liberal’ justices to uphold the ‘individual mandate’, the section of the law requiring all Americans to buy health insurance from private health insurance companies.  The alignment is especially strange given the lengths to which Justice Roberts had to go to support his convoluted reasoning.

He accepted the argument that the individual mandate was unconstitutional as an exercise of the Commerce Clause becuase it required a commercial activity that had never hitherto existed, i.e. the purchase of health insurance by someone who had never purchased it. He accepted the argument that the individual mandate was unconstitutional as an exercise of the “Necessary and Reasonable” Clause.  And he rejected the argument that the payment of a penalty to the IRS by those who refused to comply with the individual mandate (“refuseniks”) was a “tax” subject to a law that says you first have to pay the tax before you can sue for a refund.

But then he turned about and found that the money that the IRS can take from a refusenik WAS a tax and NOT a penalty.  Under that reasoning, the ‘individual mandate’ requiring everyone to buy health insurance from a private company becomes a ‘tax law’ and therefore constitutional.

With this bizarre twisting of words, the Supreme Court has revealed the nature of 21st century American political thought.  Those who make, interpret and enforce the laws no longer lie on the ‘left-right’ political continuum. Instead, they are in effect at ‘right angles’ to that continuum.  The ideology that drives the Supreme Court, the political administration and the Congress is not Conservative or Liberal but can best be described as “Corporatist.”  This is the ideology that affirms that “corporations are citizens, my friends.”  it is the ideology that drove the Roberts Court to the odious Citizens United decision.  it is the ideology behind a bailout for banks that are ‘too big to fail.’  And it is the ideology that allows Congress to pass a law like the ACA that is essentially written by a favored industry. The Corporatist ideology allows the Supreme Court to uphold the ACA despite the obvious and glaring consequence: forcing someone to buy health insurance is like forcing someone to buy a used Rambler — it’s a shoddy product at an inflated price, but you must pay a tax or swallow your anger and buy it from the smirking dealer down the street.

Why does Corporatism favor Obamacare?  Because Obamacare is nothing more than a huge bailout for another failing industry — the health insurance industry.  No health insurer could continue to raise premiums at the rate of two to three times inflation, as they have done for at least a decade.  No health insurer could continue to pay 200 million dollar plus bonuses to top executives, as they have done repeatedly.  No health insurer could continue to restrict Americans’ access to decent health care, in effect creating slow and silent ‘death panels.’  No health insurer could do those things and survive.  But with the Obamacare act now firmly in place, health insurers will see a HUGE multibillion dollar windfall in the form of 40 million or more new health insurance customers whose premiums are paid largely by government subsidies.  That is the explanation for the numerous expansions and mergers you have seen in the health care industry in the past couple of years.  You will see more of the same, and if you are a stock bettor, you would do well to buy stock in smaller health insurers, because they will be snapped up in a wave of consolidation that dwarfs anything yet seen in this country.

As I write this, I note that health industry stocks have taken a big jump on Wall Street.

What a surprise!

Dr. Clark Newhall MD JD is Executive director of Health Justice. Please reply to cnewhall@cnewhall.com