Ezrati’s Economic Outlook: Supremes Will Clarify Little

The high court's decision on healthcare reform is bound to leave uncertainty.

As of this writing, the Supreme Court has yet to announce its decision on Obamacare. It has not even announced when it will reveal its decision. Still, if much about the court’s conclusion remains a mystery, two things are pretty clear: 1) the court will almost surely hand down something complex, and 2) whatever it decides, uncertainty will continue to plague business and investment decision making.

Apart from the court’s decision about whether it can decide anything until the law goes into effect, it is focusing on two matters. The big issue is the individual mandate and whether it violates the constitution to demand, as Obamacare does, that individuals purchase healthcare insurance. The second issue is Medicaid expansion and whether it exceeds the limits of federal authority to demand, as Obamacare does, that states provide a certain level of healthcare insurance coverage for all those with incomes up to 133% of the federal poverty line.

Even if experts are wrong, and the court simply accepts or rejects the law overall, uncertainty would reign. If the law were to stand, it would require clarification on a raft of its provisions, regulatory decisions, rule making, and negotiations between the states and federal authorities. This would take some time. Such clarification, after all, is still far from complete two years after the president signed the law.

Nor would it relieve uncertainty if the court were to strike down the entire law. The debate surrounding this contentious piece of legislation has made it obvious that the country could never return to pre-existing arrangements. Republicans, Democrats, those on the left and those on the right all seem to acknowledge that the end of Obamacare would require a new set of rules. Until those are worked out, business and investment planning would have little to go on.

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