Everybody knows that the Affordable Care Act is under attack in a swarm of federal lawsuits, and everyone expects the issue to land in the Supreme Court. What most people did not know – until now – is that healthcare reform is already legally wounded and trailing blood, was wounded at birth in fact by its own proponents, the Democrats of the Senate. The New York Times popped the shocking secret at the heart of the future of healthcare reform and healthcare economics.
Follow this with me: Every major bill contains a “severability clause.” That’s the sentence that says that if any one provision gets tossed by the courts, the other provisions stand on their own. That way, the whole bill doesn’t go down because the courts throw out one part of it.
The House version of the bill had a severability clause. The Senate version, the one that finally got passed and signed, didn’t. Someone forgot. Someone slipped it out.
My lawyer friend Dick Haggart says, “That’s like sending out a business letter with no signature line. It’s unheard of.”
The act’s most vulnerable provision is the mandate that all Americans and all American employers must buy healthcare insurance – and the Administration’s court filings argue that the mandate is the “linchpin” of the whole bill, and integral to it. If any federal court finds the mandate unconstitutional, the Administration lawyers have to then argue the opposite, that the rest of the law is independent of the mandate, and can operate without it.
The futurecast around this is quite chaotic. Judge Henry E. Hudson of Federal District Court in Richmond, Virginia, has said that he will rule before New Year’s Day on the constitutionality of the mandate, and he has grilled the Justice Department lawyers skeptically.
Hudson could find the mandate itself constitutional, or not. He could consider it severable from the rest of the law, or not. He could issue an injunction against enforcement of the mandate until the issue is finally decided, or not. It would have little immediate practical effect if he did, since the mandate does not take effect until 2014.
Or he could find the mandate unconstitutional, find that it can’t be severed from the rest of the law, and issue an injunction against any enforcement of the whole law nationwide – which would throw all parties into the maximum confusion imaginable.
The ruling, however it comes out, is not itself a big problem, since everyone knows that the end result depends upon a couple of swing votes on the Supreme Court. The real and immediate problem is the confusion sown by the uncertainty. How would you plan for the future if you were the CEO of a healthcare institution? The executive team of an insurance company? Or of a large employer trying to decide how to deal with health insurance for your employees?
Politically, the Republicans see an advantage in sowing as much confusion as possible about healthcare reform. Despite their campaign rhetoric, they have little chance of actually repealing the law without electing a Republican president and Congress (with 60 votes in the Senate) in 2012. They have a much better chance of bringing the law down in the courts.
I’ll make one specific prediction: The greater the uncertainty about Obamacare, the faster the rise in health premiums we will see in the short term. Insurance is about managing financial risk, and the uncertainty increases that financial risk every way the insurance companies turn.
Joe Flower
ImagineWhatIf.com
Futurist Joe Flower, a member of the faculties of the American Hospital Association and the American College of Physician Executives, writes and speaks about healthcare economics and the future. For more on where healthcare is headed go to ImagineWhatIf.com.
