Opinion: The debate over the ‘individual mandate’: Stuck in neutral?


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Now that the kabuki theater portion of the healthcare reform debate is over, what’s the chance of this Congress actually improving the Patient Protection and Affordable Care Act?

My guess: none.

Senate Republicans’ attempt Wednesday to repeal the law was defeated on a party-line, 51-47 vote, falling far short of the 60 needed to waive the budget rules (a prerequisite to killing the Affordable Care Act, which is projected to save money over the coming decade). Simply having a vote, however, was the best the GOP could hope for; if a bill repealing the law made it through Congress, President Obama would certainly veto it.


With both chambers now having recorded their votes, lawmakers can move past the binary debate over repealing the law and get on with the work of addressing its shortcomings. In particular, they could explore how to make healthcare more affordable without the hotly disputed requirement that adult Americans buy health insurance.

The ‘individual mandate’ is in the law purely as a way to achieve a widely shared goal, to wit ...

... giving consumers with preexisting conditions better access to the individual insurance market. Insurers frequently shun these customers, forcing them to choose between buying expensive (and incomplete) coverage from state high-risk pools or going uninsured. Given that much of the cost of treating the uninsured gets passed on to people with insurance, it’s in everyone’s interest to extend coverage to more people with preexisting conditions so that they receive better-coordinated and more-efficient care. The new law requires insurers to offer coverage to people regardless of their medical histories, starting in 2014. The point of the individual mandate is to deter people from purchasing coverage only when they need costly healthcare -- a phenomenon known as ‘adverse risk selection’ that could drive up premiums sharply. But even supporters of the mandate (including The Times’ editorial board) acknowledge that it may not be strong enough to stop many people from gaming the system. That’s because the penalty for not buying insurance will be significantly lower for many consumers and businesses than the premiums they would have to pay.

The insurance lobby, which has been the strongest advocate of the mandate, has started to talk up an alternative approach similar to the one Congress took with the Medicare prescription drug benefit. Consumers who don’t sign up for coverage during the annual open-enrollment period would face higher premiums when they ultimately do sign up. And the longer they waited to sign up, the longer they would have to wait for their coverage to become effective.

One problem with that suggestion -- as with any proposal based on ratcheting up the penalties for those who don’t obtain coverage -- is that it doesn’t make it easier for people to sign up in the first place. David Kendall, a health policy analyst for the centrist Third Way think tank, said he’s worried that many consumers who can’t get coverage through an employer wouldn’t learn about the mandate until it was too late to avoid the penalties.

That would lead to a second problem, Kendall said: the difficulty Congress has in being ‘the bad guy.’ To be effective, the tougher penalties would have to be enforced, even if that meant denying coverage to people who needed it desperately. Imagine the horror stories (and the attack ads) that could ensue.

Democrats have floated several other ideas to soften or eliminate the mandate, leading some (OK, me) to speculate that lawmakers are ready to start tinkering with the law in earnest. But Kendall argues, persuasively I think, that nothing of the kind will happen until the courts have made a final decision on whether the mandate is constitutional. The courts’ decision ‘is going to shape whatever solution we have,’ he said, adding, ‘No one’s going to do anything until they have to.’

Opponents of the mandate notched another victory on Monday, when U.S. District Judge Roger Vinson in Tallahassee, Fla., declared it unconstitutional. That brought the total to two District Court rulings against the law (by Republican appointees) and two in favor of it (by Democratic appointees).

Vinson went one critical step further than District Judge Henry E. Hudson in Richmond, Va., who ruled against the individual mandate in December: He threw out the entire law. Both judges, though, analyzed the mandate from the narrowest possible angle -- as a regulation of the insurance market -- instead of considering it in its proper context -- as part of a new regulatory scheme for the healthcare industry. Harvard Law School professor Charles Fried, a former solicitor general in the Reagan administration, offered a good version of this argument for the mandate’s constitutionality Wednesday in testimony before the Senate Judiciary Committee.

The cases continue to work their way through the courts. Even if the Supreme Court agrees to pre-empt the process and decide the issue before the various appeals courts weigh in -- an extremely unlikely event -- the question isn’t likely to be resolved before the next campaign season renders Congress incapable of making substantive changes in the Affordable Care Act. So it’s probably not wise to expect anything out of this Congress on the subject except theatrics.

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-- Jon Healey