Perspective on U.S. Supreme Court Ruling on Health Care Reform Law

June 29, 2012 12:41 AM

via a special arrangement with Informa Economics, Inc.

Big Supreme Court ruling was a BIG surprise

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Thursday's Supreme Court ruling on the health care reform law was a major surprise, at least to some major media pundits and some politicians who thought the decision would at least rule that the individual mandate was unconstitutional. That did not happen.

Veteran observers have learned on very important events to let the dust settle before appropriate analysis can be made. However, from a congressional and election standpoint, there are impacts – including, it seems, the House farm bill.

A farm bill connection? House Ag Chairman Frank Lucas (R-Okla.) in an interview on Agri-Talk Radio said the ruling adds another issue to the House GOP agenda in July, increasing the challenge of getting a farm bill through the full House. Lucas suggested that a one-year extension of existing programs may be needed just because of the time required for USDA to implement the new bill. The House Ag panel’s farm bill markup is still slated for July 11.

Meanwhile, House Republican leaders have already announced they will hold a vote the week of July 9 to repeal the health care law. The Senate, controlled by Democrats, will not have a similar vote.

From an election standpoint, some pundits are saying it could galvanize the Republican base to come out and vote for more party candidates in order to up the odds of what GOP presumptive presidential candidate Mitt Romney said he would do if elected president – push to repeal the law. But that by no means can be predicted at this stage.

Meanwhile, the Supreme Court found fault with the Medicaid expansion, so that could and likely will have some state implications ahead. The high court ruled that the federal government cannot force states to agree to the law’s Medicaid expansion by threatening to take away their current Medicaid funding. The Medicaid expansion is expected to cover 17 million of the estimated 30 million people who will get insurance under the law.

If states do opt out of the Medicaid expansion, it could mean that the cost of the health care law will increase, as people who would have gone on Medicaid shift to private insurance and collect federal subsidies. The subsidies for private insurance can be more expensive than Medicaid coverage, meaning the Congressional Budget Office may be forced to increase the cost of the law and potentially increase the deficit. CBO said on its blog that the new estimate is in the works. "CBO is in the process of reviewing the Supreme Court’s decision related to the Affordable Care Act to assess the effect on CBO’s projections of federal spending and revenue under current law. We expect that this assessment will probably take some time," the office said.

Bottom line: The law's future depends on which party controls the White House and Congress after elections in November.

Comments: In the past, it took from 200 to closer to 300 days for USDA to totally implement a new farm bill, so it does, indeed, take some time. If a farm bill extension is acted on, and I believe at some stage it will have to be, the question then is what Congress will do regarding direct payments, of which $4.8 billion are now paid annually. A partial or full cut for 2013-crops is a likely "down payment" that conservative lawmakers will demand for any farm bill extension.



NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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