Dranove, who calls the Affordable Care Act the “most important legislation of the last forty years,” already wrote a reaction to his own projection of the Supreme Court’s decision. He suggests that the mandate will be upheld, and fingers Justice Scalia for predicted undue snark. As we await the decision on Eight Forty-Eight, Dranove will not only lay out the numbers for us, but he’ll also explain why he believes that, constitutionally, a punitive tax for those who don’t buy health insurance is no different than a tax rebate.
WBEZ will continue its live coverage of developing health care news throughout the midday hours and into Friday morning, so stay tuned to hear from doctors, lawmakers, an insurance company CEO and small business consultants. To react to the news, or ask questions of our experts, call 312.923.9239. We’ll also be tweeting live at @WBEZ; follow us for updates from the conversation.
9:03 am Tony Sarabia points out that if President Obama speaks during the hour, we’ll be cutting to that on air.
9:08 am The SCOTUS blog reports that the individual mandate survives as a tax. “The mandate is constitutional; Chief Justice Roberts joins the left of the Court.
9:11 am “The medicaid provision is limited but not invalidated.”
Malani: “The mandate may not stand under the commerce power…but it does stand under the tax power, which is very surprising to legal scholars.”
“I’m really looking forward to reading the opinion.”
9:14 am Dranove: “This isn’t a constitutional issue; it’s kind of an economics and market issue.”
“The universal mandate will help make sure individuals who are young and healthy stay in the insurance pool.”
Imus: “That’s really the whole purpose of the individual mandate: to make healthcare more secure.”
9:19 am Malani: “I’m not surprised about the Chief Justice siding with majority…I think he wanted to control the opinion.”
“This interesting compromise; the commerce clause is not unlimited.”
“The biggest challenge to freedom — according to the challengers— is the federal government exercising its power through the commerce clause.”
9:21 am Malani: “On the individual mandate, SCOTUS is saying, ‘You will get to pay lower taxes if you purchase insurance, and you’ll pay higher taxes if you don’t.‘”
9:26 am Dranove: For the economy, “this is good, but the expansion of tax revenues might be bad. It makes economic sense to have people covered and to do this in exchange with the mandate is a way to make sure we have risk pools.”
9:28 am Dranove: “What I think is unfortunate is that we had an opportunity through health care to allow more creativity on the part of the states than we’re going to see…instead I think we’re tied to the mast of this law, and I think it’s going to be very difficult to overturn large parts of this law.”
9:30 am Tony Sarabia reads Justice Kennedy’s dissent: “In our view, the entire Act before us is invalid in its entirety.”
Malani: “It’s clear that Justice Roberts was the swing vote here. I would have guessed that it would have been 6-3. I think we’ve seen the first chapter of the Roberts legacy being written, in that he found a compromise.”
9:32 am: From the SCOTUS blog “The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.”
9:37 am Dranove: “This is really news to Wall Street…people betting online were betting that this would fail. If you look at the stock market reaction, it’s not surprise to see the magnitude of reaction. Hospital stocks are up around 5 percent. Companies that provide medicaid managed care…are up five to ten percent.”
“This is what we saw during the debate — once different sectors got the part of the act they wanted, they turned to favor the Act.”
9:43 am Imus: Governor Quinn could take action, today even, to create a [health] exchange here in Illinois.
9:44 am Here’s the full PDF of the SCOTUS decision.
9:45 am Malani: “If a state says ‘No, I do not want to expand medicaid’…the federal government can [take the money away for medicaid expansion already given.] I would be surprised if a state said no. The only time a state would think about that is if they were under extreme financial pressure.”
Tony Sarabia: “Well that’s Illinois.”
9:49 am Dranove: “Insurance companies sell very similar products. But in many ways, the market is not particularly competitive.”
“What the exchanges will do is kind of level the playing field. It’ll give individuals more information about their options and give them more choices.”
“Blue Cross is going to continue to enjoy some benefits in the market due to it’s sheer size.”
9:52 pm Surprising news: Dranove: “Insurance stocks are down.”
“We should be careful about interpreting the stock market until the end of the day.”
Imus: Health exchanges could become “an Expedia” for health care.
9:55 am To wrap-up, Tony Sarabia asks, what are the mistinterpretations surrounding this ruling?
Dranove: Justice Roberts says the court shouldn’t be activist. “The court is going to start looking less activist whether you’re on the left or the right.”
Imus: Today is a great opportunity for Governor Quinn to call for an executive order for health exchanges.
Malani: I don’t think anybody thinks the health care system we had was working.