Tag Archives: SCOTUS

The technical flaw in Hobby Lobby’s case.

There is one technical flaw in Hobby Lobby’s argument, it is a corporation. If the owners wanted to apply their “religious views” upon their business, that is that the business truly reflects their views, then they should have remained a sole proprietorship or partnership. When you’re an SP, there is legally no difference between the business and the owner. When you incorporate, you are officially telling your state that X is a separate legal entity to you, which affords certain legal protections. The owner could hold any faith or religious views it wants, but your firm, if incorporated, is a separate legal body. The only time this is not the case is if you incorporate as a type of non-profit organization akin to say the Salvation Army for example.

Of course all of this could have been easily avoided by simply de-linking healthcare and employment. We all know how employers came to be offering health insurance plans. But that was a different era. Those benefits should have been terminated decades ago allowing the market to develop an alternative forcing employees to come up with their own plan or some sort of alternate public system.

Another thinking that is striking here is the composition of the health plans in the Exchanges. Why can’t there have been plans tailored to males and females? Prior to the “Obamacare” passage, we had that. Now everyone is mandated to buy the same plan with a ton of stuff they would never need, for example why would men need pregnancy coverage?

My take on tomorrow’s SCOTUS decision on the Affordable Care Act

The way I see it, this whole healthcare thing can go one of three ways:  The Supreme Court can say the whole thing stays, and thus the Affordable Care Act goes into full effect in 2014 (unless Romney becomes President, then who the heck knows). SCOTUS can say the whole “Obamacare” is bunk and has to go (due I suspect mainly from severability). But, if SCOTUS rules only that the individual mandate has to go, thats when things get interesting.

If you remove the mandate, the health insurance industry begins to face the grim prospect that people will only purchase coverage when they need it.  They may have to raise premiums to those already holding coverage (who may drop it). Insurers may also just get out of the health insurance market entirely. But assuming the last part doesn’t happen, then they will be inundated by sick people, and their risk pool will become completely skewed to the point where their already faltering business model goes into the toilet.

 

Now they are financial companies, and under current law and a political climate against bailouts, these insurance companies will start to implode. Eventually, the prospect of hundreds of millions of Americans losing coverage as their insurer becomes history, the acting President when this happens may make the executive decision to open up Medicare to everyone.