Sometime in the next 10 days, and possibly as early as tomorrow morning, the Supreme Court is expected to release its decision about the fate of the Patient Protection and Affordable Care Act — a.k.a. ObamaCare. With a decision like this, practically anything is possible. But most high court watchers agree that there are only a handful of likely outcomes.
Whatever happens, the ruling is bound to have a big effect on the national political scene, health and entitlement policy, and the legal boundaries of federal policymaking for years to come. Here's a brief look at the most likely outcomes and some of the possible ramifications of each.
Uphold the entire law: This is what the Obama administration and Democrats in Congress are hoping for. This will vindicate the administration to some degree, but it may also spark further public opposition: A recent study by the University of Missouri Political Economics Research Lab reports that the public, which has long been highly opposed to the mandate, would be most upset of the Court decided to uphold the entire law. A ruling to uphold the entire law would also close off opportunities to limit Congressional authority under the Constitution's Commerce Clause going forward.
Strike down the mandate: There are two basic ways this could go. Either the court could strike down the mandate alone, or the court could strike down the mandate along with linked insurance regulations like guaranteed issue and community rating that govern how health insurers can deal with preexisting conditions.
Striking down the mandate and various related provisions would leave much of the law in place, but would also excise some of the most popular parts of the law — the rules restricting the way insurers can discriminate based on preexisting conditions.
Striking down the mandate alone might create a different problem: An easily gamed health insurance system in which it's possible for individuals to wait until sick to purchase individual health insurance at artificially low rates. As I noted in a 2009 Wall Street Journal op-ed, states that have experimented with preexisting condition rules for insurers while forgoing a mandate have watched their individual insurance markets melt down as people drop out and wait until they're sick to purchase coverage. But none of those states had ObamaCare's system of middle class insurance subsidies. Right now there's some debate as to whether the inducement provided by the insurance subsidies would be enough to draw people into the system. Massachusetts health care overhaul mastermind Jonathan Gruber has run numbers suggesting that even with subsidies, the preexisiting condition rules wouldn't work without a mandate, which is certainly plausible. But there's no real-world example for us to look at, which makes it hard to know.
Strike down the entire law: Even if the court took down the preexisting condition rules, it's not clear how the government-run health exchanges would work in the absence of the mandate and related provisions. Those exchanges are intended as the primary vehicle for delivering regulated, subsidized coverage, but as I noted in Reason's July issue, without the preexisting condition rules, that could prove difficult (not to mention all the other challenges exchange designers are already struggling with). The law was designed as an interlocking whole, so taking out any part, especially the mandate, might crash the rest of the system. Which is why the Supreme Court might decide that the least intrusive way to strike down the mandate is to take down the entire law and let Congress start over. This is the least likely outcome, but it's not entirely out of the bounds of possibility. It's also the best possible outcome for those opposed to the law.
I'm not particularly confident in my ability to predict the outcome of the ruling, but I'll venture a guess and say that I think the most likely outcome is that the court strikes down the mandate and the preexisting condition regulations together. Taking down the entire law is probably be more than the court is willing to do, but even the administration explicitly argued that if the mandate goes, the rules regulation preexisting conditions should be scrapped too. If that's the ruling, we'll be left with the insurance subsidies, the Medicaid expansion, the rules governing exchanges (which states may decline to set up and let the feds pay for instead), and assorted other smaller provisions. And Congress will have to sort it all out. It'll be a big, expensive, technocratic mess — in other words, a lot like it is already.
Update: On a related note, prediction site Intrade now has the odds of the Supreme Court striking down at least the mandate at 79.9 percent.