Tuesday, June 14, 2011

What happens if the individual insurance requirement is declared unconstitutional?

Last week, a three judge panel of the Eleventh Circuit Federal Court of Appeals heard arguments in the federal government’s appeal of arguably “the most important” challenge to the constitutionality of the Affordable Care Act (ACA), as legal expert Timothy Jost describes it in a superb Health Affairs blog post. Jost, a renowned health law expert, provides the clearest explanation I’ve seen of the arguments being made by the federal government and the plaintiffs in the case, and how the three judges reacted. It is well worth reading by anyone who is interested in how the courts—and ultimately the Supreme Court—may rule on the challenges brought by more than half of the states and the National Federation of Independent Business.

I, like most people, have my own opinion on the legality of the law (I support it), but I am the first to admit that the issues are complex, far more so than the simplistic political arguments made by proponents and opponents alike. It isn’t as simple as saying that if the courts uphold the individual insurance requirement, the government can compel people to do anything it wants, like eat broccoli. Health care is unique, since the decisions I make on buying insurance or not has an impact on everyone else needing health care. But it is also it is not as simple as arguing that Congress can simply mandate any type of individual behavior it determines is needed to achieve a desired policy objective. The U.S. constitution puts boundaries around the government’s authority, and the question in this case is whether or not the ACA exceeded those boundaries.

Also, a federal court can’t overturn a law just because it disagrees with the policies included in it. The federal government’s “most powerful argument”, Jost suggests, may have been that “While the courts have the authority to determine whether a statute is constitutional or not, they cannot strike down a statute simply because they disagree with it as a matter of policy. Courts that exceed their constitutional authority by rejecting legislation because they dislike a policy decision Congress has made are just as great a threat to our democracy as a Congress that adopts legislation that does not fall within its constitutional authority. Indeed, they are a greater threat, because the people can vote Congress out if they dislike the policies it crafts, but judges are appointed for life . . .”

While I am not qualified to predict with any confidence what the courts will decide, I can say with a great deal of confidence what the impact on our health care system will be if the courts find that the individual insurance requirement is unconstitutional:

- It will lead to millions more Americans going without health insurance. According to the Congressional Budget Office (CBO), “Eliminating the individual mandate to obtain coverage . . . would increase the number of uninsured by about 16 million people, resulting in an estimated 39 million uninsured in 2019 . . . That increase in the number of people who are uninsured relative to current law [the Affordable Care Act] would be the net result of about 4-5 million fewer individuals with employer sponsored coverage, about 5 million fewer people with coverage obtained in the individual market (including individual policies purchased in the exchange or directly from insurers in the non-group market), and about 6-7 million fewer individuals with Medicaid or CHIP coverage.” With more uninsured persons, more Americans will suffer unnecessarily and many will die prematurely, according to the Institute of Medicine.

- It will make the ACA’s popular prohibition against insurers excluding or charging more to people with pre-existing conditions completely unworkable. If insurers can’t turn down people or charge them more (except for tobacco use and age, within certain limits), then some people will choose go without health insurance until they get sick. When they do apply to get insurance (subsidized by the taxpayers in many cases!), they will drive up costs to everyone else who had bought insurance all along, and as premiums go up, more people will drop their coverage, leading to even higher premiums for everyone else. The likely result would be a death cycle that leads to the collapse of private insurance markets.

- If private insurance markets collapse, the government would be the only recourse for ensuring that everyone has access to affordable coverage. Mark Pauly, a noted conservative health economist at the University of Pennsylvania who favors free-market solutions, recently noted in Ezra Klein’s Washington Post blog that the “CBO says that you leave about 40 percent of the uninsured population without coverage” [with the subsidies and without the mandate] so “If we want to close that gap, then either we have to have a mandate or make insurance free for everyone and run by the government.”

Next week, the American Medical Association (AMA) will be debating whether to withdraw its support for an individual insurance requirement. The AMA’s Council of Medical Service will recommend that the AMA continue to support the requirement, while a resolution from the Kansas Medical Association calls on the AMA to call for its repeal. ACP has introduced a resolution, supported by 19 other national, state and medical specialty societies, which calls on the AMA to continue to advocate for the individual insurance requirement, while also directing the AMA to explore alternatives should the courts find that it is unconstitutional. ACP’s position isn’t based on ideological or constitutional arguments, but on the evidence that without an individual insurance requirement, millions more people will be uninsured and will experience poorer health outcomes and even premature death as a result.

Today’s questions: Do you think it is possible to cover everyone without an individual insurance requirement, other than the government covering everyone in a public plan? If so, how?


Harrison said...

It is not possible to cover everyone without a mandate or a public plan.

I think the unspoken public debate is whether everyone needs to be covered.
That is the point that is not accepted by those who feel that taxes need to be lower and that the federal budget has to be cut to fit even lower tax rates.

And the irony is that many of those who make that argument benefit from a publicly funded health plan. And they wouldn't want that touched.
They personally don't have back up plans.
They just think everyone else should have back up plans.


ryanjo said...

That publicly funded health plan is not a give-away. It was paid into by the same citizens who are now needing its benefits. The fact that our government has stolen from it, mismanaged it and allowed it to be squandered and defrauded is exactly why our government cannot be trusted with a plan to pay for and provide coverage for the uninsured.

It's simple -- when a plan is acceptable to the majority, it will be supported. The ACA is not.

No back up plans? Read the papers, there are new ones daily. Or even better, get the 3rd parties out and let the market decide. I haven't seen anyone clamoring for an "ACA for food". It is handled on a local level by competition, efficiency, direct public subsidies and local charity if necessary. How many Americans don't have food, compared to how many without health insurance? While some are underserved, there is universal availability. Government meddling has prevented medical care from the same availability.

icebox19 said...

I agree with ryanjo about this "It's simple -- when a plan is acceptable to the majority, it will be supported. The ACA is not.". I think it is all about getting bias?

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