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Correction to This Article
Earlier versions of this article, including in Tuesday's editions of The Post, incorrectly said that, according to congressional budget analysts, eliminating the insurance mandate would drive up the federal deficit. In fact, the deficit would be reduced. This version has been corrected.

Mandatory health insurance now law's central villain

It was a fascinating year for politics. From the election to the summer rallies to "Dancing with the Stars," 2010 held its fair share of surprises.

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By Amy Goldstein
Washington Post Staff Writer
Wednesday, December 15, 2010; 12:23 AM

With a court ruling in Virginia this week that the government cannot require Americans to buy health insurance, President Obama has landed in the position of defender-in-chief of an idea he once opposed.

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As a candidate for the Democratic presidential nomination, Obama insisted that the health-care reform plans of his rivals were misguided, because they envisioned forcing Americans to buy health insurance or risk a fine. Over and over, he said on the campaign trail that such a mandate was unnecessary.

"My belief is - is that if we make [insurance] affordable, if we provide subsidies to those who can't afford it, they will buy it," Obama put it during a January 2008 debate in Los Angeles against fellow candidate Hillary Rodham Clinton, who favored a mandate.

Nearly three years later, the insurance requirement - part of the scaffolding of the health-care legislation that Congress enacted in March - has emerged as the law's central villain.

The mandate is the most frequent grounds for challenges to the constitutionality of the health-care law, appearing in 20 of the two dozen lawsuits working their way through federal courts across the country. And among the public, it is, by far, the least popular facet of the law; nearly seven in 10 Americans say it should be repealed, according to a recent survey by the Kaiser Family Foundation, a health-care research and policy organization.

In such a hostile climate, the Obama administration vigorously defends the insurance requirement, arguing that it is vital to the law's fundamental goal of extending coverage to most of the record 50 million Americans who lack it today. Some health policy specialists agree. Others say that the effects of removing the mandate, by congressional Republicans or higher courts, would not necessarily be dramatic.

The Justice Department announced Tuesday that it will appeal to the U.S. Court of Appeals for the 4th Circuit the ruling Monday that found the insurance requirement to be unconstitutional.

The opinion by U.S. District Judge Henry E. Hudson, in a lawsuit brought by the commonwealth of Virginia, was the first to strike down any aspect of the law. Two other federal judges - another in Virginia and one in Michigan - have upheld the mandate. Critics and proponents of the law alike predict that the matter ultimately will be decided by the Supreme Court.

Obama embraced the mandate after he moved into the White House and placed an overhaul of the nation's health system at the top of his domestic agenda. Eager to avoid the strategy that had helped doom President Clinton's health reform efforts of the 1990s, the White House refrained from producing a detailed road map, deferring to Democrats in Congress to write a plan. House and Senate Democrats preferred the idea of an insurance mandate, to take effect in 2014, and the president went along.

The debate over whether the mandate is essential does not split neatly along ideological lines. The insurance industry, a part of the health-care system that the White House has vilified, shares the administration's view that the mandate must accompany other insurance rules in the law.

Those other rules forbid insurers to refuse to sell coverage to people who already are sick - and thus expensive to insure - and will restrict the price differences that insurers charge different customers. Proponents of the mandate contend that the only way to make those changes affordable is to ensure that most Americans are covered.

"Without everyone in the health insurance market, costs will increase, people with preexisting conditions will continue to be shut out of coverage, and insured Americans will continue paying for those who don't get coverage," said Kathleen Sebelius, secretary of health and human services.

America's Health Insurance Plans, the industry's main lobbying group, points to evidence from several states that have required insurers to guarantee coverage to everyone who wants it and restricted price differences. The result, according to research commissioned by AHIP, has been steep increases in insurance premiums, unless those rules are accompanied by a mandate for people to buy coverage.

Congress's budget analysts estimated in June that the absence of a mandate would reduce the federal deficit by $250 billion over the next decade, because fewer people would be insured and getting federal subsidies for their coverage. Removing the mandate would cut roughly in half the 32 million Americans who are projected to gain coverage under the law, according to the estimate.

Others predict a gentler effect.

John Sheils, vice president of the Lewin Group, which conducts health-policy research, said he has examined "whether eliminating the mandate just torpedoes the whole thing" and concluded that it would not. Part of the reason is that the fines written into the law for people who refuse to buy coverage are much lower than the price of insurance premiums, prompting some healthy Americans to prefer the fine.

If the rest of the law remains the same, Sheils's analysis shows, insurance premiums could climb by nearly one-fourth. But the effects, he said, could be blunted if the government made some "tweaks," such as making it harder for people to buy insurance only when they are sick by restricting signup for coverage to just once a year.

Edward F. Howard, executive vice president of the Alliance for Health Reform, said the government also could deter people from drifting in and out of the insurance market by charging higher prices to people who wait to sign up.

Staff writer N.C. Aizenman and staff researcher Lucy Shackelford contributed to this report.


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