The Supreme Court's RomneyCare Decision and the Future of Health Care Reform

As delivered at the U.C. Berkeley SCOTUS ACA Forum, July 2, 2012:

With respect to last Thursday: One piece of background is all-important in assessing the decision: ObamaCare is RomneyCare.

The health-care reform plan that Mitt Romney proposed when he was Governor of Massachusetts is the health-care reform plan that Barack Obama proposed. RomneyCare made it through the Massachusetts legislature with only two dissenting votes. No office-holding Republican complained that RomneyCare was bad policy, or would destroy the economy, or would be unconstitutional, or whatnot--for it was the signature policy initiative of a Republican governor. The mandate that was at its core? That was the conservative Personal Responsibility principle. And remember the centerpiece of the Bush administration's Social Security privatization proposals: it was an individual mandate to regulate "inactivity": to require that people who had not established their own private individual retirement accounts do so.

Had the issue of "inactivity" reached the justices in the form of a challenge to a Republican mandate to purchase retirement accounts rather than a Democratic mandate to purchase health insurance, the Republican justices would have voted the other way.

But when the same Republican policy became the signature policy initiative of a Democratic president, every single Republican in office changed their mind. When a state government requires people to buy insurance, they said, that is an assertion of the Conservative Principle of Personal Responsibility. But when a federal government requires that people to buy insurance, they said, that is Bad Big Government, the Liberal Nanny State, and unconstitutional.

Go figure.

Akhil Reed Amar of Yale said a couple of weeks ago that if the Court did not uphold the ACA under the Commerce Clause that his career had been a waste--that he ought to have been doing constitutional law not as an autonomous discipline but as a subbranch of political science.

Amar really ought to have taken as his model not doctrinal analysts like Alex Bickel but legal realists like Fred Rodell.

But even that ultimate legal realist Fred Rodell would have been surprised by last Thursday. In past Constitutional Moments--Miranda, Brown, Jones and Laughlin, Lochner, Dred Scott--the stakes had been partisan, yes, but they also had been moral, and properly political: decisions on deep questions about what kind of country America is going to become. The last time the Supreme Court was this polarized was back in the New Deal era. But when the original Four Horsemen--never mind that McReynolds, van Devanter, Butler, and Sullivan begged Herbert Hoover not to appoint Cardozo because Brandeis was already one kike too many on the court--struck down New Deal legislation, it was because they thought America should not become a social-democratic country.

This time our New Four Horsemen--who claim to be market-oriented Republican justices--struck at an approach supported by the market-oriented Republican presidents who appointed them, thought up by market-oriented Republican ideologues to be the market-oriented Republican approach to keeping the market-oriented health insurance system from collapse. Fred Rodell understood that supreme court justices are for the most part moral and political actors first and text- and precedent-oriented legal technicians second.

Fred Rodell would have been astonished by judges who are for the most part neither precedent- and text-oriented legal technicians nor moral and political actors, but mere partisan weathervanes.

Go figure.

With respect to the future: One piece of background is all-important in assessing healthcare reform: ObamaCare is RomneyCare.

It thus has RomneyCare's weaknesses. It does not allow us to see if people would find a Medicare-like public option better than bargaining with private insurance companies. It hands market power to near-monopoly insurance companies in thinly-populated states. It requires state-level bureaucracies be functional and effective when politicians have laid down political markers that the reforms will fail. It assumes that Medicaid can grow by 2/3, maintain its sub-market reimbursement rates, and still attract doctors and nurses and technicians.

And the ACA's critically important long-run efficiency-increasing provisions rely on six largely untested bets:

1. That Congress will allow the tax on high-cost health plans--which is, over the next two generation, a slow repeal of the much-loved tax preference for employer-sponsored health benefits.

2. That Congress will allow the IPAB to recover the reimbursement system for doctors from the groups of specialist who have currently captured it.

3. That the bet on evidence-based medicine and comparative-effectiveness and electronic medical records will bring cost and quality in the U.S. as a whole within shouting distance of best-practice found in the Mayo Clinic.

4. That large for-profit providers and sociological groups of practitioners will not find additional ways to game the system and profit from large amounts of unconstrained market power.

5. That demand will create its own supply--that we can double the amount of health care currently received by our 40 million presently-uninsured without demand for care outstripping the ability of our doctors, nurses, and technicians to provide it.

6. That the exchanges will function as benefits departments for those who do not work for large bureaucracies, and deliver high-quality insurance options at an affordable price.

Bets (1) and (2) are bets on us: on what kind of future congresses we are going to elect. The preliminary evidence from RomneyCare in Massachusetts on (3) through (6) is very hopeful--but the dive is less difficult in Massachusetts, and the success of RomneyCare in Massachusetts is only preliminary.

I am hopeful but worried.