The Return of the Public Option

Any day now the Supreme Court will issue its opinion on the constitutionality of the Accountable Care Act, which even the White House now calls Obamacare.

Most high-court observers think it will strike down the individual mandate in the Act that requires almost everyone to buy health insurance, as violating the Commerce Clause of the Constitution — but will leave the rest of the new healthcare law intact.

But the individual mandate is so essential to spreading the risk and cost of health care over the whole population, including younger and healthier people, that some analysts believe a Court decision that nixes the mandate will effectively spell the end of the Act anyway.

Yet it could have exactly the opposite effect. If the Court strikes down the individual mandate, health insurance company lobbyists and executives will swarm Capitol Hill seeking to have the Act amended to remove the requirement that they insure people with pre-existing medical conditions.They’ll argue that without the mandate they can’t afford to cover pre-existing conditions.

But the requirement to cover pre-existing conditions has proven to be so popular with the public that Congress will be reluctant to scrap it.

This opens the way to a political bargain. Insurers might be let off the hook, for example, only if they support allowing every American, including those with pre-existing conditions, to choose Medicare, or something very much like Medicare. In effect, what was known during the debate over the bill as the “public option.”

So in striking down the least popular part of Obamacare – the individual mandate – the Court will inevitably bring into question one of its most popular parts – coverage of pre-existing conditions. And in so doing, open alternative ways to maintain that coverage – including ideas, like the public option, that were rejected in favor of the mandate.

The fact is, there’s enough the public likes about Obamacare that if the Court strikes down the individual mandate that won’t be the end. It will just be the end of the first round.

Robert Reich served as the 22nd United States Secretary of Labor under President William Jefferson Clinton from 1992 to 1997. He shares many of his thoughts and columns at Robert Reich, where this post first appeared.

17 replies »

  1. Michael M gives an articulate expression of what it is like to worry about a pre-existing condition. I respect his feelings a lot.

    But I will stick by my point that the number of Americans who share his dread is not that large in electoral terms.

    No more than 10 miliion Americans have individual coverage. Certainly up to a million or more Americans might be turned down for coverage each year, or persuaded by their insurance agent not to apply in the first place.

    This is not enough to elect a progressive candidate or enough to overthrow a reactionary. Texas had millions of uninsureds every year that they gave George Bush huge pluralities as governor.

    The uninsured and underinsured do not know each other or live by each other, and they are a very poor source for campaign contributions.

    I have said this to Maggie Mahar more than once — getting young people to sign up for insurance will NOT lower everyone’s premiums dramatically.

    There is no way to make health insurance affordable if you are going to cover preventive care and if you restrict deductibles. We should just accept this and get to work protecting the subsidies.

  2. John,
    We don’t know each other, and, with respect, it’s clear that you’re angry and that you and James Fallows believe that somehow it’s all the Republicans Party’s fault. But, since we’re talking about the upcoming SCOTUS ruling on a set of federal laws I can’t see how one expects the discussion to proceed without including the Federal Government’s role in all of it.

  3. I’m about tired of all these references to “the federal government” as though it were some kind of metaphysical construct. When that gets into the discussion it’s like trying to argue with a minister and he plays that “the Lord said…” card. Any further disagreement and you’re arguing against the Almighty. To coin Justice Ginsburg’s line, those who use the term don’t know what it means and those who know what it means don’t use the term.

    James Fallows put up a tight but disturbing observation this afternoon, easy to grasp, which pretty much torpedoes the whole idea of any “federal government.”


    How would you characterize a legal system that knowledgeable observers assume will not follow the law and instead will advance a particular party-faction agenda? That’s how we used to talk about the Chinese courts when I was living there. Now it’s how law professors are describing the Supreme Court of the John Roberts era.

    This discussion would be far better if comments kept to health care, simple economics and risk management, leaving the politics for another thread.

  4. I’m not sure what you mean by “provision of your choice.” Since you asked, I get that for the ACA to work the dollars have to be there so insurance companies can afford to be required to ensure everyone regardless of their condition at the time of enrollment. The dollars also must be there to provide the same quality insurance to the 50% of insured who will pay little or no premiums as that which will be received by the 50% insured who pay most or all of the premiums. I understand that without the mandate the dollars will not be there to cover health plans costs. Thus, the requirement of the mandate for the entire ACA scheme to work.
    Trouble is, the federal government as it was conceived and as it’s defined by the Constitution doesn’t have the right to force Americans to purchase products and penalize them when they refuse. That much has most likely already been determined by SCOTUS. We’ll know on Thursday.
    Personally, I would benefit from the ACA if withheld in its entirety. But I can’t abide the federal government’s overreach and usurping of powers that rightly belong to the States.
    It would be nice if every American volunteered to be insured and pay premiums even when healthy. Then there’d be plenty of dollars to cover the sick. But that’s not realistic, is it? Without the mandate, many Americans will likely choose to stay uninsured until they get sick and then purchase insurance at that time, which will most likely be the end of the insurance industry as we know it. Perhaps that’s the ultimate aim of those who think up plans like the ACA. I don’t know. I also don’t know if I’ve answered your question, Peter.

  5. Michael, are you one of the people who don’t support the ACA but support the provision of your choice?

  6. I think we’ll find that Purple Insight’s poll is pretty accurate on what SCOTUS will rule and the fallout that will create.

  7. ‘without the mandate they (AHIP et al] can’t afford to cover pre-existing conditions.’

    Perhaps ‘they’ need be reminded to: ‘Watch what you pray for!’

  8. As informed citizens await the decision on the ACA, here is a brief polling report conducted by the American Action Forum, which provides some insight into the ruling: http://bit.ly/Kz0zv9

  9. Peter,
    There are many reasons to not support ACA that don’t have anything to do with pre-existing conditions. I don’t think you can accurately state that “many people don’t look or plan that far ahead.” Of course we do.

  10. “Neither are we ever without the fear that someday I might lose my job and our health insurance, after which we would be unable to insure ourselves.”

    Michael, most people don’t look or plan that far ahead – hence the poor support for the ACA and the mandate.

  11. If thye check is divided equally, then nobody passes on the appitizer, dessert, and drinks. Thus, the system will crush itself under its own weight. Hail, Obama!! What a joke!!

  12. Bob,
    As a man in his 50s who has a pre-existing condition, and whom is married to a cancer survivor, I can tell you that the opposite is actually true. The pre-existing condition clause is never far from our minds. Neither are we ever without the fear that someday I might lose my job and our health insurance, after which we would be unable to insure ourselves. This is a very real concern. Having said that, I’m not in favor of the individual mandate. I do believe it is unconstitutional. But I disagree with your assertion that for 80% of likely voters the loss of the pre-existing condition clause in Obamacare has “never crossed their mind.” That’s just not true.

  13. Robert Reich is terrific most of the time.

    But he misfires here

    About 80% of likely voters either have group coverage or Medicare.
    The issue of pre existing conditions has never crossed their mind.

    Of the remnants who are forced to buy individual insurance, some have decent policies and so pre existing conditions do not trouble them either,
    Others do not have enough money to buy any policy, regardless of conditions.

    The real fight will be about the subsidies. If the subsidies survive, then non-rich Americans can survive without employer beneifts. That is what Democrats should be focusing on. The Mandate is a side show by conparison.

    Bob Hertz, The Health Care Crusade

  14. “If the Court strikes down the individual mandate, health insurance company lobbyists and executives will swarm Capitol Hill seeking to have the Act amended to remove the requirement that they insure people with pre-existing medical conditions.They’ll argue that without the mandate they can’t afford to cover pre-existing conditions.”

    The AHIP / BCBSA is already well-known on this point. Read their amicus brief. It basically says “roll the regulatory clock back to 2008” if you strike the Mandate.

  15. Duh…
    That which is not mandated is by definition optional.
    So the opposite of an insurance mandate must be….(wait for it)…an insurance option.
    If by law a mandate for everyone is prohibited, then by law everyone (i.e. the public) must be provided an option.
    What am I missing?