Modern Classical Economics Flunks Its Reality Tests
From EH.Net: Christopher Tassava On Jim Lacey, "Keep from All Thoughtful Men: How U.S. Economists Won World War II"

Supreme Court Possible Health Care Decisions

Jonathan Cohn:

Health Care Supreme Court Outcomes:

  1. Uphold the entire law: If you believe in health care reform, as I do, this is obviously the best outcome. And it remains a very credible one. Remember, two very conservative judges at the appellate level found the law to be constitutional, despite tough questioning during oral arguments.

  2. Strike the mandate, keep everything else, including the penalty: This would be a moral victory for the critics and it would, quite possibly, limit federal power for generations to come. But it would probably do very little…. If Justices Roberts and Kennedy want to have their cake and eat it too—to issue a major ruling with long-lasting doctrinal effects, but in a way that doesn't look like a naked usurpation of legislative authority—this is the way to do it.

  3. Strike the mandate and the penalty, keep everything else. I keep reading that this would be equivalent to gutting the law. That is very, very wrong. Such a ruling would significantly weaken the law: Many fewer people would get insurance and, at least initially, and individual insurance premiums would be higher. But middle-class people buying coverage on their own would basically pay the same as they would if the mandate stayed in place, because of the way the subsidies work. (People who get coverage through employers or through Medicaid would also fare the same.) The law would still bring coverage to between 10 and 20 million people, according to the projections, and the deficit would actually end up slightly lower. In the future, state and federal lawmakers could bolster the law by thinking up alternatives to the mandate, or versions designed to meet the Supreme Court’s legal criteria.

  4. Strike the mandate, the penalty, the insurance reforms, but keep everything else. This would be a lot more devastating. The dysfunctional insurance market would remain…. We'd have universal coverage for the very poor and for the old (thanks to Medicare). The non-elderly middle class would be the ones left out.

  5. Strike the whole law—in other words, keep nothing. This is as bad as it sounds. Thirty million people lose health insurance they were supposed to get. People who would have had insurance anyway lose consumer protections and guarantees of minimum benefits. The deficit goes up, according to projections. Incentives to make the health care system safer and more efficient disappear.

This list is not exhaustive. The Court could decide that it can't decide the case until the law is in place and somebody can allege actual harm. The Court could also make a ruling on one part of the law and then "remand" the case to a lower court to sort out the rest. Those outcomes, and other permutations I've heard, seem far less likely, at least according to the experts I've consulted. But this is the Supreme Court. The justices can do pretty much what they want.