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The Supreme Court is about to decide the fate of a $2.6 trillion market that represents approximately 18% of U.S. GDP. To put it differently, a group of judges is about to make one of the most consequential rulings on the economy in memory – even if they, at times, struggle with basic market concepts.
This is a damn big deal. If the court rules the bill’s individual mandate unconstitutional, healthcare costs could rise anywhere from 2 to 40%, according to economists’ estimates. And killing the legislation outright would mean “31 million Americans who otherwise would have health insurance won’t be covered at the end of this decade.”
At the heart of the case is a requirement that all Americans buy health insurance. “If the mandatory coverage provision goes, so does the whole program,” Noah Feldman writes in an impassioned plea for the Court to make economic sense. “Health insurance, it turns out, presents a classic case of market failure,” he adds.
Obama’s most influential legal critic, Randy Barnett of Georgetown, says the case is at heart about economic freedom: “What the government is claiming here is this power – and this ought to disturb people on the left – to make people do business with private companies when Congress thinks it’s convenient.” But Dahlia Lithwick says the case is about an entirely different kind of freedom:
This morning in America’s highest court, freedom seems to be less about the absence of constraint than about the absence of shared responsibility, community, or real concern for those who don’t want anything so much as healthy children, or to be cared for when they are old. Until today, I couldn’t really understand why this case was framed as a discussion of “liberty.” This case isn’t so much about freedom from government-mandated broccoli or gyms. It’s about freedom from our obligations to one another, freedom from the modern world in which we live.
Adam Serwer runs through the various steps the Supreme Court could take, including punting, striking down the individual mandate or tossing the whole law. Mark Thoma, resurrecting a November 2009 post, argues that an individual mandate, coupled with subsidies for the poor, is the only way to avoid “adverse selection” issues in the healthcare market. (Translation: It’s one of the only ways to make sure everyone is insured.)
You’d think something as consequential as basic healthcare would have an effect on the presidential election, but the AP isn’t so sure. David Frum, for his part, says repealing the law would be big trouble for the GOP:
If the Supreme Court doesn’t rescue them from themselves, they’ll be heading into this election season arguing, in effect, Our plan is to take away the government-mandated insurance of millions of people under age 65, and replace it with nothing. And we’re doing this so as to better protect the government-mandated insurance of people over 65 – until we begin to phase out that insurance, too, for everybody now under 55.
The economic consequences of the Court’s decision won’t be known for months. For the time being, we’re officially in full-on tea-leaf-reading mode, as legal wonks ponder broccoli references, stumbles by Solicitor General Donald Verrilli and Jeff Toobin turning into an odds maker.
Toobin on Toobin, discussing the “Toobin Factor,” vis a vis himself, others – Politico