By David Feldman
My favorite band, the Supremes (aka the US Supreme Court) tomorrow will release the most important decision they have rendered in decades, maybe only other than the seminal Bush v. Gore decision which determined the 2000 Presidential election. They are ruling on whether the Patient Protection and Affordable Care Act of 2010, better known as Obamacare, is constitutional. In particular, the bill requires every American human to purchase health insurance or pay a fine. The argument is that fining people for not doing something is unconstitutional as exceeding the government's right to regulate interstate commerce. A number of federal appeals courts have agreed, and others have not, hence the reason for kicking it upstairs to the big guys in D.C.
Before the first ruling striking it down, no legal experts seriously thought there was a chance it could be successfully challenged. Then came more rulings and the scholars are changing their tune. Meantime, Obama's team really was not prepared for this possibility as they probably believed it was not serious. So they didn't consider it when writing the bill and they didn't consider it in their battles in court or in the court of public opinion. Now they're behind the 8-ball with no publicly known plan to deal with the possible declaration of unconstitutionality and little to say other than they believe the Court will uphold the law.
The Republicans, I understand, are working feverishly behind the scenes on Plans B, C, D, etc. depending on the decision. But they have not yet announced any of those plans.
I heard a well-placed but completely unconfirmed rumor that Chief Justice Roberts is writing the majority opinion. If that is true, it is more likely than not that the Court will strike down at least part of the bill, if not the whole thing. Based on prior decisions they can probably do either. If they strike down the mandate to buy insurance, the rest of the bill makes no sense because the mandate basically pays for all the other goodies in the law.
The libertarian part of me believes that requiring everyone in the country to do something or pay a fine goes too far. You have to have car insurance but you don't have to have a car. You have to pay into social security but not if you don't work (somewhat extreme example I admit). They could have simply called the fine a tax and it would have been legal, but that would have been political suicide for the Dems.
But what then? So many efforts to reform health care over the years (including Clinton's disastrous failure) failed. This one finally happened, seriously infected warts and all, and now it may well go away. How do we fix health care? To quote Fiddler on the Roof in answering the question, "Why do we always cover our heads?" - I don't know. But with Medicare's viability sputtering, doctors' incomes spiraling down, and insurance company profits through the roof, something is terribly wrong and the extreme partisanship in Washington is not a good environment to do something about it. Let me know what you think!
For additional insights on reverse mergers, SPACs, other alternatives to traditional initial public offerings, the small and microcap markets and the economy, visit the Reverse Merger and SPAC Blog by David N. Feldman, Esq., Partner of Richardson & Patel LLP.
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