Anthony Hall
Analysts say it will hard for President Barack Obama to come up with a victory no matter what call the U.S. Supreme Court makes on Obamacare.
The arguments will waft east, then west, and if Obamacare survives its constitutional litmus test, it will then simply prime the Republican presidential candidate to be all the more vociferous against the insurance mandates. For now, skip the point that it will likely be a face-off between Obama and Mitt Romney, who instigated his own from of insurance mandates when he was the governor of Massachusetts. Romney has offered as two-faced an explanation for that as he can: It was the right thing to do for the small state he governed, he says, but not for the nation as a whole.
He should go back to math class. If that math works for Massachusetts, it will work nationwide. But again, that's just a sidebar here.
For Obama, a victory means a renewed effort to repeal a law that makes the Troubled Asset Relief Program look like free food.
TARP -- the federal bank bailout program -- was unpopular because it was seen as bailing out big banks that recklessly promoted risky mortgages with adjustable rates that eventually burned the borrower. Those borrowers happen to be taxpayers, making it fairly clear that the victims of the financial crisis were bailing out the culprits who turned a blind eye to the risks involved.
The first argument for the Supreme Court to resolve is whether or not they should hear any arguments at all at this point. The penalties for non-compliance with Obamacare are paid to the IRS, but they do not kick in for several years. Attorneys will argue no one has been hurt as the penalty phase has not begun. If no one has been hurt, then the court is just listening to some hypothetical reasoning about the possibility of penalties meted out in the future. Generally, courts do not listen to arguments about the possibility of harm in the future -- whether it has been clearly spelled out or not.
The critical decision, however, is the federal government mandating health coverage. One would normally assume that means the sick will be covered -- and that would be a good thing. But the argument centers around healthy people who are covered because insurance pools operate like a Ponzi scheme. To wit: It is the healthy people paying into the system who defray the costs of the sick people in the same insurance pool. If everyone in an insurance pool were sick, in other words, the company would certainly loose money. It takes healthy people who are not draining funds with doctor's bills, who keep insurance companies solvent.
The mathematical conclusion for all is that even those with established health problems can be guaranteed insurance. But it takes a lot of healthy people to defray the costs to the point where someone who is already diagnosed with an expensive medical condition to join the general pool.
To put it another way, if the law said insurers could not turn people down but had no mechanism to force people to buy insurance in advance, then people would wait until they got sick before buying insurance. As soon as they found out they needed $20,000 worth of medical care, they would send in their $250 premium. Obviously, that math isn't going to work.
Obamacare is not exactly a house of cards, but even if it works, some consider it too expensive for many small businesses. A small tweak could make the whole the collapse.
Either way, two votes count: the Supreme Court and the national election in November.
In international markets Monday, the Nikkei 225 index in Japan was flat, up 0.07 percent while the Shanghai composite index in China rose 0.05 percent. The Hang Seng index in Hong Kong was up less than 0.01 percent while the Sensex in India lost 1.78 percent.
The S&P/ASX 200 in Australia fell 0.18 percent.
In midday trading in Europe, the FTSE 100 index in Britain gained 0.71 percent while the DAX 30 in Germany added 1.07 percent. The CAC 40 in France climbed 0.44 percent while the Stoxx Europe 600 rose 0.79 percent.
