Archive for March, 2012

Will the Supreme Court strike down health care reform?

Now that oral arguments are done, everyone who is not a Supreme Court judge has to wait for three months to see if the Court will rule the individual mandate Constitutional or Unconstitutional. As if that weren’t enough, the justices can also strike down some or all of the rest of the law, if they decide they want to. I have no idea what the outcome will be, btu I can see the arguments from both sides. So, here are the best arguments that “they will uphold the individual mandate” and “they will rule it unconstitutional.” The con first:

The Justices will rule the individual mandate Unconstitutional.

The Supreme Court is divided between five conservative justices and four liberal justices. The conservative justices have shown themselves more than willing to ignore prior case law and hand down decisions which confirm to their own political beliefs. They tossed out decades of campaign finance law in Citizens United v FEC and revealed themselves as a political branch in Bush v Gore. What’s more, this is the most conservative Supreme Court in decades, so if  any Court is going to strike down a major accomplishment of a Democratic President, this will be the one. The conservatives are also very worried about the possibility that if they uphold this law, then Congress will have no limit on its power to regulate commerce.

During oral arguments, the Court revealed themselves as pretty hostile to health care reform. Before oral arguments, most commentators assumed the Court would uphold the entire law. Now, court-watchers think there’s only a 50-50 chance (maybe worse). Kennedy and Roberts, the conservatives most likely to side with the Obama administration, were very skeptical about the Constitutionality of the law. Worryingly, they also parroted some of the opposition’s lines when they questioned the Solicitor-General, showing they probably are thinking about the case in the same way as the law’s opponents. Scalia seemed willing to disregard his previous ruling in Gonzales v Raich in order to strike down this law. In short, the future does not look good for health reform.

The Justices will rule the individual mandate Constitutional.

Everyone who is very worried about the Government’s poor job in oral arguments is missing the fact that those arguments rarely determine the case. The written briefs and the environment of the case are much roe deterministic. The environment of the case should swing in the health care law’s favor. Chief Justice Roberts and Anthony Kennedy want to preserve the aura of independence and impartiality surrounding the Court. They do not want it to be labeled as the third political wing of the government. They care about the Court’s reputation far too much to strike down a President’s greatest accomplishment on shaky technical grounds. Also, upholding the law may give them much more latitude to strike down parts of the Civil Rights Act or the acceptability of affirmative action, which are things they care about far more than the Commerce clause.

As a friend pointed out to me, the legal case for the law is pretty simple:

The main argument that opponents of the health-care law have come up with is that the mandate regulates economic inactivity—i.e., not buying insurance—and the Commerce Clause allows only the regulation of economic activity… The [Sixth Circuit] court pointed out that there are two unique characteristics of the market for health care: “(1) virtually everyone requires health care services at some unpredictable point; and (2) individuals receive health care services regardless of ability to pay.” Thus, there was no such thing as “inactivity” in the health-care market; everyone participates, even if he or she chooses not to buy insurance.

The legal contortions the conservatives would have to go through to strike this down would be enormous and the precedent set by such a ruling would probably make Social Security and Medicare privatization (other important conservative goals) impossible. Therefore, the Court will probably grudgingly rule in the law’s favor.

So which argument do you believe?

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Can Health Reform survive without the individual mandate?

Wednesday, the Supreme Court heard arguments over whether the individual mandate is “severable” from the rest of the health reform law. That is, if they choose to strike down the individual mandate, do they also have to take down other parts of the law that may or may not depend on the mandate to function? The Court should rule that all of the rest of the law should stand, even if the mandate falls.

The individual mandate is in the law as a companion to the law’s prohibition on discriminating against people with pre-existing conditions. If we want universal coverage, the insurance companies have to be required to cover everybody. If  they have to cover everybody then everybody has to sign up. If not, then only the sick would sign up for health insurance and rates would go through the roof.

Of course, most of the Affordable Care Act (ACA) isn’t related to the individual mandate and would not be affected if the mandate is struck down by the Supreme Court. For example:

  • The Affordable Care Act will expand Medicaid so that it covers everyone who makes under 133% of the poverty line. Currently in many states, you cannot qualify for Medicaid even if you make nothing in income. The only way for adults in many states to get on Medicaid is if they (1)have children and (2) make less than a third of the poverty line! (How’s that for a social safety net?) The ACA patches up this hole and of course, the individual mandate does not affect Medicaid at all.
  • The law also starts several experiments in payment reform through Medicare. Currently Medicare, like almost all insurance plans, pays doctors for every service they perform. This is a problem because it means insurance pays for more care rather than better care, driving up the cost of health care in America. The ACA aims to change that. It is already starting several small scale experiments in cost-control. Its payment reforms include giving a hospital a set amount to treat one disease or a lump sum to treat one group of people for a year. It also starts lowering payments to hospitals that have high rates of re-admission and has given out grants to medical providers so that they can better share information about patients and study which treatments are the most cost-effective for a given disease. All this is to say that the ACA is trying lots of different ways to bring down the cost of medical care in the US. These methods have nothing to do with the individual mandate.
  • Finally the ACA reforms the individual buyer’s insurance market. Even these provisions, though they are related to the mandate, should be able to stand if it is declared unconstitutional. For example, the ACA makes insurance companies display information about their plans in an easy to read format. Its sort of a “nutrition facts” label for insurance plans. As it stands currently, you would need a lawyer to wade through countless pages of insurance jargon to tell you what you are buying  from an insurance company.  This is as big of a no-brainer as I can think of in the bill. The law also creates online exchanges where you can compare and buy these newly-understandable insurance packages. It also says that insurance plans must cover preventive care and cannot retroactively cancel coverage when you get sick.

So, can you  think of a way that the expanded Medicaid program would be affected by striking down the individual mandate? I can’t.  Besides the fact that they are both tools to increase insurance coverage, I don’t see them overlapping at all. Likewise with the reforms to Medicare. Those reforms are done in order to reduce costs in the Medicare program. The Medicare program and the population it serves are completely unaffected by the individual mandate.

Finally, the ACA’s improvements to the individual insurance market do not rely on the mandate to function. Some, like the exchanges and the insurance plan fact sheet won’t be terribly affected by the loss of the mandate. Even the guarantee of insurance coverage–the part of the ACA most related to the individual mandate–can still stand (though it wont work nearly as effectively).

For instance, New York, New Jersey, Maine and Vermont all force insurers to cover everyone in the state and do not have an individual mandate. This is less than ideal, and insurance premiums are much higher in those states because of that decision, but it is obviously possible to have a health insurance system with guaranteed issue  and without an individual mandate. Congress is also more than capable of coming up with a substitute for the mandate.

At any rate, it is not the Supreme Court’s job to make political decisions about a statute. If part of a law is unconstitutional, then they should strike only that portion. The Courts should not and cannot wade into the political and policy issues involved in deciding which *Constitutional* parts of the law need to be thrown out alongside a (supposedly) unconstitutional provision.

Explaining the individual mandate

What is the individual mandate?  

Protesters in front of the Supreme Court this week

In 2014, it will be a tax penalty that will be assessed against anyone who can afford health insurance but who chooses not to purchase it. It will be a penalty of 2.5% of income or $695, whichever is greater. People on Medicare, Medicaid, on their employer’s health plan, or who have bought an individual policy will not have to pay this penalty. (Also starting in 2014, the government will begin giving out subsidies to individuals so that they can afford to purchase health care individually.)

Why did Congress enact the individual mandate?

The individual mandate is in the law as a companion to the law’s prohibition on discriminating against people with pre-existing conditions. As it stands now, insurance companies will refuse to cover people who have ever been struck by a serious disease or who are at risk for one in the future. Yes, another side-effect of childhood leukemia is that you will never be able to qualify for private individual health insurance for the rest of your life! So Congress, reasonably enough, put a stop to this practice in the Affordable Care Act.

However, this does present a legitimate problem for health insurance companies. If they can’t refuse coverage to people with existing medical conditions, what’s to stop someone from calling to buy medical coverage from the ambulance on the way to the hospital? (to take the most extreme example) In order to keep people from waiting until they get sick to buy insurance (and thereby overloading the insurance system), Congress said that anyone who does not buy insurance will be docked a tax penalty.

Why is the individual mandate being challenged before the Supreme Court?

Detractors say that Congress does not have the power to enact an individual mandate. They say this would amount to forcing people to buy a private good which they may not want. They say that the Constitution only gives Congress the power to regulate “economic activity” and not a person’s choice to remain “inactive” in the health insurance market.

Supporters say that everyone is involved in the health care market because disease or illness can impact anyone at any time. Therefore, to protect society at large from having to pay for an individual’s medical bills, Congress can require people to have some form of insurance to cover them when they fall ill. They say that the Constitution’s “commerce clause” gives Congress the power to regulate health care and the “necessary and proper clause” gives Congress the power to enact a mandate as part of an broad regulatory scheme.

Who originally thought up and popularized the “individual mandate”?

Actually, the same people who now say that this is an unprecedented and unconstitutional infringement on civil liberties are in many cases the individual mandate’s old supporters. Republicans across the board used to think the mandate was a great idea. However, once Democrats decided to include it in their health care bill, every Republican politician in the country suddenly had a collective change of heart. As Ezra Klein shows: “If you’re talking about Republicans who were in any way active during the 1990s, there’s a very good chance you’re talking about Republicans who either supported or said nice things about bills that included an individual mandate.”

How does the mandate relate to the rest of health care reform?

The mandate is very intertwined with the law’s ban on discrimination against people with pre-existing conditions  and some other reforms to the individual health insurance market. But the law does much more than just reform the individual insurance market. It expands Medicaid, reforms Medicare, regulates insurance companies’ profits, allows young adults to stay on their parents’ health insurance plans, etc. However, the Supreme Court has the power to strike down much of the rest of the law if they determine it is inextricably linked to the individual mandate. More on this in my next post.

How Republicans have already won on Health Care Reform

The US Supreme Court is hearing arguments this week (principally) over whether the “individual mandate” in President Obama’s signature health care reform bill is constitutional. This issue is dominating political news coverage this week, just as the issue of the individual mandate has dominated coverage of the Affordable Care Act since Obama signed it into law. This is why Republicans have already won the messaging war on health care reform.

Unfortunately, when most people hear the words “health care reform,” “Obamacare” or “Affordable Care Act” they immediately think of the individual mandate, which (starting in 2014) will put a tax penalty on people who have not signed up for health insurance. It is a tragedy (though not an unpredictable one) that this one small part of the bill has become its best-known feature. The bill does so many good things for people in America, but the continuous media coverage of the court challenges have made sure that the individual mandate is the one thing people associate first with Obamacare. In politics, name association and messaging are everything and the strong popular connection between “health care reform” and “individual mandate” is probably the main reason why health reform remains unpopular.

This is extremely ironic because the individual mandate was originally a conservative idea, advocated by Republicans as an alternative for Pres. Clinton’s proposed health care reforms. Obama didn’t like it when he ran for President, and liberals have never liked it. Conservatives (predictably) turned against it when Democrats included it in their health reform package. And the only reason it made it into the Democrats’ bill was because of a desire to make the bill more appealing to Republicans and centrists. But alas, the mandate is now integral to giving people the good parts included in health reform. I could go on for 10 posts about this but here are some of the good parts:

  • Over 30 million people will be given access to health insurance. Anyone without money to buy insurance will be given a government voucher or will be added to expanded Medicaid rolls.
  • People can no longer be denied coverage because of “pre-existing conditions” or whatever other reasons insurance companies can come up with to deny health coverage.
  • The plan will save tens of thousands of lives every year.
  • The plan will reduce the deficit by over $100 billion in its first 10 years.
  • The plan also starts experiments in payment reforms which could hold the key to bringing down our skyrocketing medical costs.

Imagine if any of these major parts of the bill were what was dominating the news coverage around Obamacare. The individual mandate is a provision that will affect very few people in America but is given out-sized significance. Its too bad, because if people knew the Act contained all these beneficial and popular provisions, our health care debate would be very different. Instead of focusing on the most unpopular part of the Act, we could all be talking about how the US is joining the rest of the world in offering health care to all of its citizens. And that, my friends, is why Republicans have already won the messaging war over Obamacare.