OP-ED

Defending the Affordable Care Act

What will they do? The Supreme Court (more or less) that gave us Bush v Gore in 2000 will later this month hear arguments by states challenging the Affordable Care Act, a.k.a. health care reform. The heart of the legal challenge raised by conservative state attorneys general is whether the individual mandate is constitutional. What happens if the Supremes say no? Does the entire law fall, or just the mandate?

The issue for lawyers is called “severability.” Did Congress when passing the law believe the mandate was necessary to the smooth functioning of the rest of the law? Clearly there are large swaths of the law for which the mandate is largely irrelevant: the physician payments sunshine act (disclosure of drug company payments to doctors); the creation of the Patient Centered Outcomes Research Institute to conduct comparative effectiveness research; the numerous payment pilot projects; and more.

But on the core question of the law’s desire to expand coverage for the uninsured and set minimum insurance standards like forcing insurance companies to guarantee policies to all comers at non-discriminatory rates, the issue of the mandate’s necessity becomes murkier. The Obama administration is simultaneously arguing that it is crucial to the law’s smooth functioning, yet isn’t necessary. How can both be true? Here’s how two physicians, Samuel Y. Sessions and Allan S. Detsky, writing in the New England Journal of Medicine explain the seeming contradiction:

Arguing that the mandate is constitutional under the Commerce Clause requires taking the position that it is “essential” to the statutory scheme, whereas arguing that it is severable dictates the seemingly opposite position that the ACA is “capable of functioning without it.” Politically, making both arguments may be awkward, which may be one reason why the administration endorses partial severability. Legally, however, the positions are consistent: the mandate may be an important part of the statutory scheme, and thus constitutional, but not absolutely vital, and hence completely severable.

Important, but not vital. If the Supreme Court strikes down the mandate but leaves the rest of the law intact, the insurance industry will have to jack up rates to pay for the free riders who fail to purchase coverage. That would be sad. But let’s not forget that it would be no different than what we have now with regard to the free-riding problem, while we would still have millions more with coverage.

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect, The Washington Post and The Fiscal Times. You can read more pieces by him at GoozNews, where this post first appeared.

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bob hertzJohn BallardNate OgdenBobbyGMD as HELL Recent comment authors
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bob hertz
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Right on! We must allow employer plans to pay something like 110% or 120% of the Medicare fee schedule to hospitals and drug companies. That payment must be accepted by the provider, and balance billing to the patient must be restricted. As a minor concession to hospitals, Medicare part A would pay directly for uninsured EMTALA care if the patient cannot pay. (this should have happened 15 years ago) In Canada, there was a doctor’s strike when the government imposed limits on balance billing. The left wing Canadians took on the strike and won. As you suggest, something like that… Read more »

Nate Ogden
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Nate Ogden

agree EMTALA needs repealed, the whole notion of forcing people to give service away for free needs to end. Just accounting gimicks that hide the true problem.

Imagine if the government was required to pay for uncompensated care and we could see exactly how much it was costing.

MD as HELL
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MD as HELL

My 10 doctor group has 28 million dollars in collections since 1997. That does not include the theft built into fees paid at rediculouly low levels. That is unpaid after contractual deductions and all the other adjustments, including the uninsured.

bob hertz
Guest

I have seen the same resistance to spending anything on health insurance. In the case of the home health company, though, if they are paying wages of $10 an hour then a lot of employees do not in fact have $80 a month to spare on insurance. Just a caution there. I also remember several small groups where 50% of the employees had decent health insurance through a spouse, and therefore had no interest in the employer’s plan. I don’t know how to unravel that particular corner of health policy. Finally, before I move on, I have read that Massachusetts… Read more »

Nate Ogden
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Nate Ogden

Times like this I wish I had a Think Tank so I could delegate the math to some unpaid interns begging for a job. Medicare lasted 7 years, I believe, before they needed to start fixing the faulty projections. http://reason.com/archives/1993/01/01/the-medicare-monster/3 The whole article should be read but this is pertinant; “This plan ran into trouble by the insurance suggests early 1970s, again because the cost of medical care rose faster than income. Elderly enrollees, many of whom lived on fixed incomes, were paying an increasing share of their income for supplemental-insurance premiums. In the 1972 amendments, Congress stipulated that these… Read more »

bob hertz
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Nate, I could sense your response as I wrote my own post. And in part you are not wrong. I admit that I have in mind the millions of people whose employers pay nothing and do nothing, whether out of greed or indifference or the employer themselves being next to broke. In food, retail, agriculture, and commission sales, the employers by and large never did pay a role. The employees in these sectors have led the way in health care bankruptcies for years. The millions of employees in these sectors defer health care until they reach age 65 and Medicare,… Read more »

Nate Ogden
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Nate Ogden

150 million? people have employer insurance and maybe 20-30 million do not. To me that seems like screwing over a lot of people that are doing the right thing to get at a handful who are not. I would further argue things are not as cut and dry as you might think. Participation is a big issue right now, group policies require you have 50-75% of employees covered in order to avoid adverse selection. Every week I work with employers that want to offer insurance but can not due to participation. Or employers that are in a death spiral they… Read more »

bob hertz
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MD as Hell is correct as far as the impact of the current law – – i.e., if you get free health insurance, fully paid from your employer or union, you may as well accept it…… but if you have to buy your own insurance, in any way, wait for the generous federal subsidies and buy it after you are sick. The national economic result is rather ironic. Check it out:…………………. A corporation has been paying $12,000 a year for family coverage, and the employee has been paying $3000. Under the new law, the corporation can pay a $2000 fine… Read more »

Nate Ogden
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Nate Ogden

who controls cost, negiotates premiums, fights with the doctors, and educates the employees when you remove employers from the equation?

People really need to give more thought to what an employerless healthcare system would actually look like.

I have a full staff that works with employers everyday assisting their employees with their insurance. Who is going to help all these people when the employer is gone? The Insaurance company? A government 800 number?

What do you hope to achieve by eliminating employers from the process and what do you think your giving up? Have you ever actually worked it out?

John Ballard
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If PPACA is ruled unconstitutional by the Supremes many GOP platforms will implode.

The real death panel is not IPAB but the US Supreme Court, another group of non-elected federal employees who rely on amicus crib notes to become experts on every matter on which they decide.

Nate Ogden
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Nate Ogden

“The Supreme Court (more or less) that gave us Bush v Gore in 2000” Funny I could have sworn it was a poorly ran State election, hanging chads, and opaque election laws that gave us Bush v Gore. The SCOTUS gave us a solution to B v G, they didn’t give us the problem. “Clearly the mandate would nearly eliminate the free rider and moral hazard problem.” Actually no it will not, it will make the problem much worse. Now if someone forgoes insurance they are entitled to emergency care. After PPACA they are entitled to buy insurance at any… Read more »

MD as HELL
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MD as HELL

Keep smokin’ whatever it is that lets you ramble. Everyone who pays his or her own premium is going to drop coverage. And why not. There is no need to maintain coverage when you can get it when you want it. I will save $20,000 pr year between my wife’s Blue Advantage and my Blue Cross through my corporation.

I myself have never made a claim. People like me are the suckers in the room, healthy and paying for peace of mind.

BobbyG
Guest

“healthy and paying for peace of mind.”
__

Well, that IS in fact the entire “Socialist” notion of “insurance.”

MD as HELL
Guest
MD as HELL

I prefer health and freedom from government tyranny.

BobbyG
Guest

So, I take it you forego car insurance?

MD as HELL
Guest
MD as HELL

Insurance is pooled risk. If everyone is not paying, they should not be covered. You gotta pay to play.

BobbyG
Guest

“Pooled risk” is a “Socialist” concept.

Nate Ogden
Guest
Nate Ogden

according to the uneducated that don’t know what pooled risk or socialist means. If a person is free to join a risk pool how is that socialist?

Social Security and Medicare with forced participation are socialist, the underlying risk pool is not in of its self.

Brendan O'Brien
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Brendan O'Brien

It’s hard to start of an unbiased article by mentioning Bush v. Gore. There is good evidence that the court had a good 70 years of history prior to the 1990s where there were no federal laws struck down no matter what their reach was. Fortunately, the court has done a better job of balancing interests with the language of the constitution Clearly the mandate would nearly eliminate the free rider and moral hazard problem. However, there may be more legal ways or incentives to achieve that goal. I think the one thing that can truly not stand without the… Read more »