Three possible futures for health-care reform
Today’s appellate court ruling underscores what we perhaps already knew: The Affordable Care Act is heading to the Supreme Court. The ruling, which declared the individual mandate unconstitutional but the rest of the law constitutional, makes it somewhat easier for the Supreme Court to overturn the individual mandate, as there’s now plenty of precedent for that, and somewhat harder for them to overturn the whole law, as that would be a very radical move. But either way, it makes it necessary for them to weigh in.
If they decide to follow the 11th Circuit Court and strike the mandate without touching the rest of the law, they will have effectively thrown the law back into Congress’s lap. Congress will then be left with three options:
Do nothing: If Congress neither repeals nor repairs the law, it will simply limp along, covering fewer people at a higher cost. Health economist Jon Gruber estimated that under this scenario, the law will “cover fewer than 7 million people in 2019 rather than the 32 million projected to be newly covered. ... Federal spending, however, would decline by only about a quarter under this scenario since the sickest and most costly uninsured are the ones most likely to gain coverage under the Affordable Care Act.” The irony of this outcome is that the law would look more like Obama’s campaign proposal, which did not include an individual mandate.
Repair: The individual mandate isn’t specifically necessary for the bill to work. But there needs to be something to discourage free riding and make sure there’s a mixture of healthy and sick, young and old, signing up for insurance. A recent report (pdf) from the Government Accountability Office laid out a number of possible alternatives, including open enrollment periods combined with penalties for late enrollment, as we see in Medicare’s prescription drug benefit; autoenrollment through workplaces; conditioning other government services on proof of health coverage; a tax to pay for uncompensated care, and more. Another option would be to strengthen the state waiver program and allow states to implement whatever fix they deem appropriate, ranging from an individual mandate of their own to nothing at all.
Repeal: If there’s no law, there’s no need for an individual mandate.
Congress’s decision will most likely be governed by its composition. If a Republican wins the presidency in 2012 and Republicans take the Senate, repeal, or at least a radical scaling back of the bill, becomes a virtual certainty. If President Obama wins reelection and Democrats take hold the Senate and make gains in the House, some sort of fix is plausible, if not assured. But in a world of divided government, the likeliest outcome is that we don’t do anything. At least for now.
Instead, both parties wait until 2014, when the law goes into effect, and hope that the problems created by the absence of an individual mandate — or some alternative to the individual mandate — puts pressure on the other to buckle. That’s not a very good way to make policy, but it’s the path of least compromise, which seems to be Congress’s preferred roadway in recent years.
This analysis, by the way, extends beyond just the individual mandate. Even if the Supreme Court upholds the law in its entirety, there will be policies that work and deserve expansion and policies that fail and require removal. No sweeping legislation survives first contact with reality unscathed, and the Affordable Care Act will be no different. If the law is to be successful, Congress is going to have to be willing to revise, rework and reform it over time. If Republicans refuse to allow such updates, but also find themselves unable to muster the votes for repeal, we will be stuck with a policy that is never quite allowed to succeed and never quite forced to fail.