Editor’s Note: Aaron E. Carroll is an associate professor of pediatrics at the Indiana University School of Medicine and the director of the university’s Center for Health Policy and Professionalism Research. He blogs about health policy at The Incidental Economist.
Aaron Carroll: Health care reform has wound through courts since passage last year
He says law likely to reach high court this summer amid wide public disagreement on merits
He says many of law's controversial points already exist in Medicare
Carroll: Swing vote of Kennedy may decide; court might strike down some parts, uphold others
The Supreme Court’s new term began on Monday. It promises to be a significant one for health care reform.
Lawsuits against the reform shepherded by President Obama, the Affordable Care Act, have been winding through the courts for some time now. Most have focused on the individual mandate, the part of the law that requires everyone to buy insurance. Some people believe that it is an overreach of government. If you can be forced to buy health insurance, then what can’t you be forced to buy?
Others believe that health care is different, and that allowing this provision does not lead to a slippery slope. Still others believe that the individual mandate is simply a kind of tax, and completely fine.
What most people wanted out of health care reform was the guarantee that they could always get health insurance, even if they were sick. Most people also felt that you shouldn’t be penalized if you had a chronic condition that wasn’t your fault. You should pay the same premiums as everyone else. Both of these provisions, known as guaranteed issue and community ratings, were very popular.
There was a problem with those two things, though. They might keep some people, especially young, healthy people, from buying insurance. If you know you can always get health insurance even after you get sick, and you can’t be charged any more for it, why not just wait until you need it? You can game the system.
If only sick people buy insurance, then it gets very expensive, and won’t work. This is called the “free rider” problem. One way to solve it is to make everyone buy insurance. And that’s what the Affordable Care Act did.
But it’s not the individual mandate that’s paramount; it’s the idea that we need to strongly discourage healthy people from gaming the system. Congress could have done this in other ways. It could have raised everyone’s taxes a bit and then provided a tax credit or refund for buying insurance. That’s totally legal and done all the time – think of the mortgage-interest deduction and child tax credit. But it was hard enough to pass the law without also raising everyone’s taxes, and Congress chickened out of that route.
There were still other options. Congress could have set an “open enrollment” period, say in January, as the only time you could get into the system. Since you couldn’t buy insurance the rest of the year, people might be less likely to gamble on a free ride. Congress could have imposed a penalty for trying to enter the system at a later date. Or it could have enacted a single-payer system, much as Vermont is doing.
The real problem is not that we don’t know how to fix the law, it’s that many people don’t want to. It’s not as if the Obama administration isn’t trying. Part of the recent “President’s Plan for Economic Growth and Deficit Reduction” included language to strike the word “penalty” and replace it with “tax,” thus rendering all of the court challenges moot. But there’s no way opponents of the Affordable Care Act will allow that. They want the whole thing gone, and challenging the constitutionality of the individual mandate may provide them the tool to do just that.
As the cases have worked their way up the courts, some justices have ruled in favor of the law and some against. Everyone knew, however, that this would eventually wind up at the Supreme Court. It’s likely going to come down to one man – Justice Anthony Kennedy – providing the swing vote in a 5-4 decision to uphold or strike down the individual mandate.
Even if that part is struck down, the rest of the law may survive. Precedent exists for allowing laws to survive after a piece is ruled unconstitutional. In fact, many think that striking down the mandate, while upholding the rest, might provide the perfect balance to justices who want to avoid being too controversial.
A resolution is coming soon. The Obama administration has decided to take its case directly to the Supreme Court, bypassing the 11th Circuit. This means that the case could be resolved as early as June, right as the presidential election campaign heads into full swing.
People will disagree as to whether this is good or bad for the law, or good or bad for Democrats and Republicans, or good or bad for the candidates up for election. No one disagrees, however, that this will be a pivotal moment for the Supreme Court, for politics, and for the future of health care reform in the United States. Mark your calendars. It’s going to be an exciting summer.
The opinions expressed in this commentary are solely those of Aaron Carroll.