Opinion: The Embattled Individual Mandate
Anyone with even a passing interest in healthcare or politics knows that the so-called individual health insurance mandate has become a legal and partisan battleground of historic proportions. With origins in conservative policy strategies to address failures of private health insurance markets, the idea that everyone should be required to have health insurance has become a symbol of government intrusion in our daily lives. Derisively dubbed socialistic or worse, it is no wonder that this provision of the 2010 Patient Protection and Affordable Care Act (commonly called the ACA) has public approval ratings nearly as low as the U.S. Congress itself.
The debate about the individual mandate reached a crescendo in oral arguments before the U.S. Supreme Court last month. Conservative justices grilled Solicitor General Donald Verrilli about the constitutionality of the health reform law’s minimum coverage requirement. While the nation’s highest court deliberates behind closed doors on the future of this provision, and possibly the entirety of the sweeping health law, some cable TV analysts all but declared health reform dead. The Intrade predictions market handicapped the likelihood that the Supreme Court would strike down the individual mandate at roughly 40 percent before oral arguments, but that prediction jumped toafter oral arguments.
Some Supreme Court watchers are not as pessimistic; for example, Tom Goldstein, publisher of SCOTUSblog, puts the odds of the court striking down the mandate at just.
While the court could strike down the entire law, contingency planning by insurers, hospitals, state officials, and others undoubtedly now centers on more limited scenarios in which some insurance-related provisions fall along with the mandate but not the entire law. Permutations of which parts of the law might stand and which might fall are manifold. Even the Obama Administration argues that if the mandate goes, so should the requirement that insurance companies be prohibited from considering health status in decisions about whom to cover (called “guarantee issue”) and how they set premiums (called “community rating”). Indeed, Verrilli cited the failures of New Jersey’s guaranteed issue and community-rated non-group health insurance market in the 1990s in support of the idea that a mandate is integral to assuring stable health insurance markets. If the court strikes down guaranteed issue and community rating rules along with the mandate, it is not clear how the public will respond. In fact, polls show that regulations requiring insures to take all comers regardless of health are among the most popular features of the ACA.
As health care constituencies contemplate possible futures without the enrollment mandate, it is worthwhile considering what the mandate really is and why it looks unpalatable to the public in polls. The ACA would not send anyone to jail for being without health coverage. Rather, it would work something like W-2 wage statements that get stapled (or virtually stapled) to our tax returns. People without proof of purchase would pay a penalty when they file their taxes. In fact, for most of us who get covered by our employers, the proof of purchase will appear in Box 12 on our annual W-2 forms, and nothing else will be required of us to prove compliance with the mandate. It is also notable that people with incomes below the federal income tax filing threshold ($19,000 for couples filing jointly this year) will not be subject to the penalty for going without coverage. Moreover, millions of Americans would be eligible for sliding-scale federal tax credits in order to bring premiums within reach. Even with these new subsidies, people who face insurance premium contributions above 8 percent of household incomes will be exempted from the penalty.
Careful polling by the Kaiser Family Foundation shows that the public’s view of the coverage mandate is much more nuanced than recent public discourse would lead us to believe. In its monthly tracking poll, Kaiser asks respondents about the requirement that “nearly all Americans have health insurance by 2014 or else pay a fine, ”with only
As is well known, the individual mandate was a central part of the
Regrettably, in the national dialogue on the future of health reform, ideology and political spin have once again trumped the facts. Even if the court upholds the health reform law, its fate is murky as we leap into the federal election cycle. To healthcare policy stakeholders I say: keep on contingency planning.