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As many of our members make their way to our Spring Management Clinic in Biloxi next week, the U.S. Supreme Court will be hearing oral arguments in the constitutional challenge to the Obama health care law which goes by the title, Patient Protection and Affordable Care Act (PPACA).

Just how big is this case?

The high court justices have scheduled six hours of arguments over three days — more time than given to any case since 1966. Depending on your point of view, the PPACA is either the most consequential progressive domestic legislation since the creation of Medicare or the biggest government power grab in the nation’s history.

The case is so big, the justices have postponed half of the cases they would ordinarily hear in April in order to clear time to get started on the health care opinions that they are expected to issue by late June, or possibly early July.

The immediate issues, in the order the court will hear them, begin with the question of whether the so-called “individual mandate”, which requires almost all Americans without coverage buy individual health insurance policies or pay fines, is ripe for adjudication now? Or must the case be deferred until 2015 because of laws that bar ruling on the constitutionality of tax laws before payments are due?

After that come the arguments about what many consider the central issue: whether the mandate, which is unprecedented, should be voided because it represents an unconstitutional exercise of Congress’ power to regulate commerce and to levy taxes.

Next is what becomes of the law’s 2,700 pages if the mandate is ruled unconstitutional? Are some or all of them “severable,” meaning that Congress would have wanted them to stand even if the mandate falls? For example, what about the provisions establishing tax credits to help small businesses and individuals buy health insurance and taxing large employers that do not provide full-time employees government-approved coverage?

Apart from those issues, does the law’s expansion of Medicaid violate the sovereignty of the states by effectively requiring them to spend more of their own money or forfeit all of the federal Medicaid money they now receive?

The 26 states challenging the law, along with the National Federation of Independent Business (NFIB) say, “The individual mandate rests on a claim of federal power that is both unprecedented and unbounded: the power to compel individuals to engage in commerce in order to more effectively regulate commerce. This asserted power does not exist. It is a revolution in the relationship between the central government and the governed.” The 26 states argue that the mandate was deemed by Congress to be “necessary to make the other provisions work as intended,” and that the court should strike down the whole law.

It has been estimated that job losses resulting from just one provision of the law — the health insurance premium tax, “will reduce private sector employment by 125,000 to 249,000 jobs in 2021, with 59 percent of those losses falling on small business.” It seems clear this tax falls heavily on small business while bypassing big business, labor unions, and governments.

Whichever way the Supreme Court rules, the country will still need real health care reform that improves health care delivery and moderates costs.

The NFIB has what seems to be a reasonable set of solutions that could begin the task of replacing PPACA.

Their proposals include:

(1) Tax parity between the group and individual markets;
(2) Tax parity between insurance purchased by the self-employed and group insurance;
(3) Defined contribution health insurance;
(4) More transparent measures of cost, options, and quality;
(5) Public and/or private exchanges;
(6) Interstate insurance purchasing;
(7) More risk-pooling options for small businesses and individuals;
(8) Mechanisms to get insurance for those with pre-existing conditions;
(9) Greater insurance portability;
(10) Greater latitude for consumer-driven health insurance products;
(11) Wellness incentives; and
(12) Malpractice reform.

Shortly following the passage of the current law we were pleased to have Dr. Bob Graboyes, Senior Fellow for Health and Economics, NFIB Research Foundation, address our Fall Convention. We continue to find Dr. Graboyes views on health care most insightful.

Dr. Graboyes recently wrote, “Those who wrote this law ought to go to bed each night fearing two things. Their lesser fear should be that the Supreme Court overturns PPACA, leaving their vision of health care reform as dead as Pompeii. Their greater fear should be that the Supreme Court doesn’t overturn the law, for then they will spend the next generation explaining the destruction they brought upon American health care and the American economy.”

Once the Supreme Court rules and the dust settles, we hope Dr. Graboyes’ schedule will allow him to again share his views and insight with our members at an upcoming meeting.

As always, we welcome the viewpoint of members on this or any other topic that affects our industry and small business in general.