Is There Life After Mandates?

By Kim Bellard, March 29 2012

This week the health policy, legal, and political worlds have been focused on the Supreme Court hearing oral arguments about the constitutionality of the Affordable Care Act (ACA).  If the passage of ACA was a once-in-a-generation piece of legislation, the Supreme Court review has been the inevitable sword of Damocles hanging over it.

After two years, ACA remains unpopular, with roughly equal percentages of the population opposed to it as supporting it (see, for example, Pew or Kaiser Family Foundation surveys), with the mandate requirement of the bill driving much of the unpopularity.  Ironically, the provisions that health insurers must cover all comers, without preexisting condition exclusions, are widely popular, even though the mandate was included explicitly to offset the risk of those provisions. 

I have to confess that the mandate never bothered me too much.  I’ve been following health policy long enough to remember that the idea of a mandate is neither new nor a Democratic proposal; it has as many Republican roots as Democratic.  I also remember that candidate Obama opposed the mandate before he became President.  Still, the slippery slope – aka, the Judge Scalia “buying broccoli” – arguments are not without merit: where does the federal government draw the lines of its authority?  The Solicitor General Verrilli had no good response for that line of questioning, which may have doomed ACA.  In the oral arguments earlier this week, several of the Justices showed skepticism towards the mandate, but were less clear about its potential severability – i.e., can ACA survive without the mandate?

There are two reasons why I’ve never been too troubled by the mandate.  For one, it’s not that strong a mandate in the first place.  The mandate never applies to low income individuals – who are most likely to be without insurance – and the penalty for not having insurance caps out at $2000 per family/2.5% of family income.  Depending on one’s age and income, not having insurance might be a rational trade-off; the mandate won’t sweep all those low risk young people in.  Despite having a mandate there for five years now, The New York Times recently reported that 120,000 residents of Massachusetts – some 2% -- still remain without insurance, of whom only 48,000 paid a penalty, so we shouldn’t expect ACA’s mandate to work miracles either.

More importantly, the mandate is, in my mind, less important than the subsidies.  Despite the horror stories trotted out by the Administration and other supporters of ACA, by far the vast majority of people who lack health insurance lack it because they cannot afford coverage, or choose not to buy it – not because they cannot qualify for it.  As evidence of this, HHS admits that only 50,000 people have enrolled under the high risk pools set up by ACA as an interim measure – far short of the 375,000 initially projected.  Think about that: 50 million uninsured, and the most optimistic estimate projected less than 1% of them would take advantage of guaranteed access to health coverage – and those projections proved wildly high.  HS has tried dropping rates to entice more high risk individuals, but they’re not buying.  The problem isn’t access, it is cost.

There is considerable passion on both sides of ACA – people seem to either love it or hate it (and Kaiser Family Foundation says 40% think it has already been struck down!).  The law was carefully designed so that most of the taxes/penalties would not kick in until after the 2012 elections, yet here we are with ACA as one of the focal points of the election anyway, with the Supreme Court decision expected to be delivered in June, just in time for the final campaigns.   One likes to think that the Supreme Court will base its decision purely on the constitutionality of the law, as opposed to the desirability of what the bill accomplishes or the politics of the situation – but that would be naïve. 

Despite the pundits’ predictions, it’s pointless to predict how the Court will rule.  If the mandate does end up being stripped out, there are several options that could help take its place (assuming anything can get through the hyper-partisan Congress).  For example, simply keep the subsidies and the high risk pools.  We might need the health insurance exchanges to help set the market prices for the subsidies, but maybe not.  We could also allow uninsured persons an annual limited enrollment period, similar to how an employer plan operates, and as a last fallback we could always open up the Federal Employees Health Benefit Plan to uninsured citizens – it is one of the largest health insurance programs in the country and so could accept the risk, and it is already closely overseen by the federal government. 

Of course, with a small shift in the political winds, conservatives may find themselves hoist by their own petard – instead of a mandate to buy private coverage, some future Congress could pass a broad-based tax to fund universal coverage, which would almost certainly be constitutional.  Such a program could come with a public option – or simply with “Medicare for all.”  Some cynics think that has been the goal of ACA all along.

I can’t help but to equate, on some level, the opposition to a mandate to the recent (and ongoing) furor over covering contraceptives.  Opponents of contraceptive coverage do not seem to recognize a difference between being required to pay for something they object to from being required to do that something themselves.  We all pay for things that we may morally object to: my federal taxes pay for members of Congress to go on junkets, my state taxes fund the death penalty, and even my auto insurance premiums subsidize premiums of drivers with DUIs.  I don’t approve of those actions, but I’m not forced to drive drunk or to perform the lethal injection.  It’s the same for subsidizing other people’s contraceptive coverage, or coverage generally.  People who live in a democracy, particularly the uniquely American version of democracy – have to accept that they don’t always get their own way, that compromise is necessary.  Other people have rights too.  Democracies require shared sacrifices.

The sad thing about the debate on the mandate, like ACA in general, is that it simply doesn’t address the real problem: exploding health costs and how to reshape our health system to better deliver value.  Mandates and insurance reform should be corollaries to the outcome of that debate, not the core of the debate.