Contingency Plans Are Few if Court Strikes Down Health Insurance Requirement

 

Source: Source: NY Times | Published on March 28, 2012

After a day punctuated by seeming skepticism from Supreme Court conservatives about the constitutionality of requiring Americans to buy health insurance, the justices will turn their attention on Wednesday to how much of the 2010 health care law might survive if they strike down that mandate.

If the court invalidates the insurance requirement, the White House and a divided Congress would be left to pick up the pieces. Their first steps toward finding alternatives to reduce the number of uninsured in the country — nearly 50 million, or one in six Americans — would depend heavily on how far the Supreme Court goes, and on the balance of power in Washington after the November elections.

Lower courts that have ruled against the insurance mandate have adopted a spectrum of positions. Judge Roger Vinson of Federal District Court in Pensacola, Fla., who first ruled in the case now before the Supreme Court, invalidated the entirety of the Affordable Care Act, writing that the insurance mandate could not be legally separated from the rest of the expansive law. He stayed that judgment until the law could be reviewed by higher courts.

The Court of Appeals for the 11th Circuit in Atlanta upheld Judge Vinson’s invalidation of the insurance mandate. But it significantly scaled back the impact by concluding that only the mandate itself would die.

The Obama administration will argue on Wednesday for a middle ground that is driven by economic assumptions as well as legal analysis. If the mandate falls, the Justice Department has said, two politically popular provisions must die naturally with it — those that prohibit insurers from declining coverage or charging higher premiums because of pre-existing medical conditions.

The economic argument is that it would be unreasonable to expect health insurers to cover the sickest Americans if the healthiest ones are not required to pay for coverage and broaden the actuarial pool. “If you are told that you can buy insurance anytime, you would wait until you got sick and buy it en route to the hospital,” said Neal K. Katyal, the former acting solicitor general, who argued the health care case before the 11th Circuit.

But there also is a clear political component to linking the insurance mandate to the insurance regulations. A poll taken this month by The New York Times and CBS News found that while more Americans disapprove than approve of the law’s insurance requirement, the abolition of pre-existing condition exclusions is wildly popular, with 85 percent saying they supported it.

The health care law began requiring that insurers cover children regardless of their health in September 2010, but the ban would not apply to adults until 2014.

In court on Wednesday, the challengers to the law will argue that the entire act must fall along with the mandate. The court has appointed an outside lawyer, H. Bartow Farr III, to argue the 11th Circuit’s position, that the mandate could fall alone.

White House officials said that they remain confident that the Supreme Court will uphold the law, and that they have done no planning for the possibility of its full or partial demise.

Congressional leaders in both parties also said there had been no significant contingency planning.

“I think the law is going to be found constitutional, and if not we’ll have to deal with it then,” said Representative Henry A. Waxman, a California Democrat.

Representative Paul Ryan, the Wisconsin Republican chairman of the House Budget Committee, said his party would continue to press for repeal of the law and substantial changes to government insurance programs.

So long as the court does not invalidate the entire law, many other components — and the taxes to pay for them — could remain in place even if the mandate and related insurance regulations are struck down. They include a vast expansion of Medicaid eligibility and the establishment of health insurance exchanges, offering subsidized coverage to those with low incomes, both scheduled to start in 2014.

Other provisions that might survive include increased prescription drug benefits for Medicare recipients, requirements that insurers cover preventive services like cancer screening, incentives for doctors to adopt electronic records, and grant programs aimed at disease prevention and restructuring the medical payment system.

Some health care experts have suggested that there might be ways to replace the insurance mandate by using market incentives to encourage the uninsured to gain coverage.

The government could, for instance, give consumers limited enrollment periods to buy insurance so they could not wait until they were ill. Or it could tell them that if they did not buy a policy during a defined period they also would not be eligible for benefits, like subsidized coverage.

But supporters of the health care law contend that such measures would insure only a fraction of the 30 million estimated to gain coverage with the mandate in place.

“There are alternatives to the mandate, but none of them are considered as effective,” said Neera Tanden, a former Obama aide who now heads the Center for American Progress.

Drew Altman, the president of the Kaiser Family Foundation, a health care research group, said that without the mandate the number of uninsured and the premiums paid for coverage would almost certainly rise.

He said that the partisan divide in Washington, where Republicans have vowed to repeal the health care act, makes it difficult to imagine Congress seeking any kind of repair.

“States may be forced to stitch together a variety of imperfect state-specific approaches if the mandate falls,” Dr. Altman said. “It is useful to remember that we have averaged 19 years between national health reform debates, and only passed national health reform legislation once.”