The Health-Care Ruling & Your Business
Here's the short version: Obamacare is constitutional.
It was the most anticipated legal decision since Bush v. Gore, which settled the 2000 presidential election. National Federation of Independent Businesses v. Sebelius, the U.S. Supreme Court's health-care decision Thursday, proved surprising for several reasons.
(It also proved surprisingly complicated. Some media organizations that rushed to summarize the 59-page decision, not counting dissents, got it entirely backwards in their initial reports.)
As the dust settles a bit, it's becoming more clear what the decision really amounts to, and what that really means for you and your business. Here are some of the key points:
A Little More Certainty
When I talked with entrepreneurs and experts leading up to this decision, the one thing I heard across the board was that they just wanted the issue settled. Sure, there were strong feelings on both sides, but overall, they wanted to know what the law entailed, exactly, so that they could figure out how to comply with it...and then spend more time running their businesses.
Today, we came a giant step closer. But, of course, there are still many details to be worked out.
Government regulators have to come up with rules about minimum insurance offerings. Many states haven't taken the first step toward building the insurance exchanges that are supposed to help individuals obtain insurance if they can't do so through their employers. Moreover, the court did strike down part of the expansion of Medicaid included in the act, so we'll have to see how that shakes out.
And, there's also the possibility that Republicans will win the White House and take over majorities of both houses of Congress, and then repeal the health-care law in its entirety. So, so much for certainty.
Tax vs. Penalty: Does it Matter?
From legal and political perspectives, it's huge that the court upheld the individual mandate as a tax, not a penalty. That allowed the court to shift the constitutional justification from the Commerce Clause to the federal government's much broader tax powers, and delivered a major talking point to Republicans in the upcoming elections.
For entrepreneurs, however, it probably doesn't matter much one way or another.
Remember, as well, that the individual mandate applies (as the name implies) to individuals.
Since that part of the law was upheld, the court never even had to address the question of whether some parts of the law, like the employer insurance requirement, could survive if other parts were struck down. It's a non-issue now but something that observers spent a lot of time debating prior to the decision.
Bottom line for entrepreneurs? Businesses with more than 50 employees will be required to provide health insurance to their employees. Next step for the government is to work frantically and provide guidance on what kinds of insurance plans will past muster.
Depending on how efficiently the health insurance exchanges work--and that's likely to vary from state to state--the law is likely to make it easier for employees to switch jobs. Employees who have stayed with an employer simply because they need health insurance (especially if their main challenge was overcoming insurers' refusal to cover preexisting conditions) should have many more options to obtain insurance on the open market.
As an entrepreneur, this might mean some of your employees have more freedom to go elsewhere. But it also likely opens the door for recruiting opportunities and the chance to use more freelancers and independent contractors if your business supports it.
And, if you've been thinking of launching a start-up, but the need for medical insurance through your employer is one of the things holding you back, that excuse might soon hold a bit less water.
Increased Health-Care Demand
This gets complicated, but it's now likely that since more people will have health insurance, there will be more demand in the long-term for health services. There also will be even more demand for ways to cut costs within the health-care industry.
If you're an entrepreneur who can come up with unique solutions to newfound customer pain in these areas, you might one day look back on the health-care law as the best thing that ever happened to your start-up!
Water-Cooler Question du Jour: Is Chief Justice Roberts Really a Liberal?
One of the most intriguing questions to come out of this decision is whether Chief Justice John Roberts, appointed to the court by President George W. Bush in 2005, is actually a closet liberal. I don't know that this will affect anyone's business tomorrow, but longer-term it's worth keeping an eye on.
Roberts's vote with the majority (and the fact that he wrote the decision) are big disappointments to conservatives. But one decision does not a court make, and in his first five years as chief justice, the Roberts court was seen as the most conservative part of the court in living memory.
The health-care decision was especially surprising given that Justice Anthony Kennedy, a more moderate jurist and expected to have been the swing vote in the case, voted with the more conservative bloc. In fact, Kennedy took the time to make a statement from the bench in which he called the act, "invalid in its entirety."
Longer-term, the fact that Roberts and Kennedy basically switched sides in this decision does raise interesting questions that could affect entrepreneurs. Businesses usually benefit from stability in the law and in the courts. Expect to see a lot of analysis of what the voting blocs here might mean for predicting future cases about government power and business.
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