This column has made the point repeatedly that one of the major drags on the U.S. economy comes from the uncertainty that the business community faces in determining how government laws and regulations will impact its costs going forward. One of the biggest unknowns to businesses is what impact the new federal health care law will have on their bottom lines once it is fully in effect.
It now appears that some of those blanks will be filled in by early summer. The Obama administration had until 5 p.m. on September 26 to file a motion to have the full 11th Circuit Court of Appeal hear the case after a panel of that court had ruled 2-1 that the individual mandate was unconstitutional. The Obama Justice Department did not file that motion, so the case is in all likelihood on its way to a hearing by the Supreme Court next spring. A ruling on the case should be announced by June.
President Obama should be commended for letting the case get to the Supreme Court expeditiously. He could have played a waiting game and prevented the law from being finally adjudicated until after the 2012 election. That may have been an advantageous political move on his part, but it would have left businesses, workers, the uninsured, state governments and insurance companies up in the air with major deadlines for implementation looming. Obama’s decision not to petition for a full hearing by the 11th Circuit means that the issue should be much better defined nine months from now.
From a political perspective, the president’s decision is an interesting one. The Supreme Court decision will come down in the heat of the presidential race, shortly before the nominating conventions of the two major political parties are held. How the ruling will impact the presidential race is an interesting question. Polls show that the law is no more popular now than it was when it was enacted. Some of the polls show a majority of voters want it repealed. But the law does have a large group of supporters.
If the Supreme Court strikes down the mandate that every individual must purchase health insurance, the law will be severely damaged. The mandate was critical to the fiscal “solvency” of the health care law. It was also necessary to prevent individuals from purchasing health insurance only when they came down with a serious illness. Without it, insurance carriers would be denied many of the healthy individuals who make health insurance actuarial tables work and would be left with the chronic users of services. If the high court finds the mandate constitutional, the full law will go into effect as set out in the legislation.
Regardless of how the Supreme Court rules, opponents of the health care law will go into the November 2012 election angry that the legislation was ever enacted. The court’s decision will more likely have a greater effect on the mood of those who supported the passage of some form of a comprehensive health care law. If the Supreme Court rules against the mandate, those who wanted a public option or a single-payer system will relive their anger at Obama for not fighting to have those elements included in the bill.
Regardless of how the high court rules, the fact that the decision will come sooner rather than later is a plus to all businesses, individuals, and governmental entities that need to know well in advance what impact the legislation will have on them. President Obama did everyone a favor by letting the case get to the Supreme Court as soon as possible.