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USSC Ruling has Grave Implications for the Poor

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The Economist — OBAMACARE’S individual “mandate”, or requirement to buy health insurance, has been the most controversial part of a bitterly controversial law. The Supreme Court’s decision on June 28th to uphold it was historic. But the reality of the mandate fails to live up to the rhetoric. The penalty for not buying insurance is less a stick than a noodle. The fine is fairly small, and those who do not pay it face no further punishment. Arguably much more important, in purely practical terms, was the Supreme Court’s ruling on Medicaid.

Barack Obama’s law sought to expand Medicaid, a health programme jointly funded by the federal government and the states, to a broader swathe of America’s poor. Citizens with incomes of up to 138% of the federal poverty level (the poverty level is now $23,050 for a family of four), including childless adults, would be eligible: before the bill, the federal government required the states to cover only some impoverished groups, including those with children and pregnant women. Obamacare was supposed to extend insurance to 32m more Americans by 2019; the Medicaid expansion would account for about half that increase. Now the Supreme Court has said that the expansion must be optional for the states. More than 11m uninsured poor adults may get no help at all.

In the suit decided by the Supreme Court, 26 states argued that the Medicaid expansion was coercive. Under Obamacare’s terms, the federal government would pay for 100% of the expansion in 2014, dropping to a still generous 90% by 2020. If states did not comply, they would lose all federal cash for Medicaid. Such arm twisting, the states argued, was unconstitutional. No lower court agreed. But the Supreme Court’s opinion, written by John Roberts, the chief justice, said states must be allowed to decide for themselves without losing existing federal aid. Some of the 26 will now decide not to play along.

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