Economic and Domestic Policy

The real threat to health-care reform (Hint: It's not the Supreme Court)

By Ezra Klein
Tuesday, February 8, 2011

Will the Supreme Court overturn the part of the health-care law that penalizes people who don't buy insurance for themselves? A few months ago, the answer that experienced Court-watchers gave was "not a chance." Orin Kerr, a law professor at George Washington University who once clerked for Justice Anthony Kennedy, said "there is a less than 1 percent chance that the courts will invalidate the individual mandate." Now, the best we can say is, who knows?

As Slate's legal columnist Dahlia Lithwick has said, the conventional wisdom has turned sharply. "Today," she writes, "it is an equally powerful article of faith that everything rests in the hands of Justice Anthony Kennedy in what will surely be a 5-4 decision."

That could mean we were wrong a few months ago, or it could mean we're wrong now. But it doesn't matter. Replacing the individual mandate wouldn't be particularly hard. All we need is another policy that does the same thing - specifically, discourage free-riders who don't want to buy insurance until after they get sick and thus leave the rest of us paying for them.

In fact, I can give you four credible alternatives in four sentences:

l We could limit enrollment changes to once every two years, so people who decide to go without insurance can't buy coverage the moment they get a bad report from their doctor.

l We could penalize those who wait to buy coverage with higher premiums, which is what we do in the Medicare Prescription Drug Benefit.

l We could have a five-year lockout, in which people who decide to go without coverage wouldn't be able to access the subsidies or insurance protections for five years, even if they decided they wanted to buy insurance.

l We could raise taxes by the same amount as the individual mandate penalty and give everyone who showed proof of insurance on their tax forms a "personal responsibility tax credit" of the same amount.

But all these ideas suffer the same problem: They'd need to pass through Congress. And Republicans in Congress don't want to make the Affordable Care Act better. They want to repeal it.

This - and not the Supreme Court, or even any flaws in the design of the bill - is the real problem for the Affordable Care Act. Like any major piece of legislation, parts of it will work much better than we expect, and parts of it will disappoint us. Perhaps the experiment with paying hospitals a flat fee to treat a patient's diabetes will prove a smashing success, leading to lower costs and higher-quality care. And perhaps the provision allowing individuals to publicly rate their insurers will prove a disaster, with companies paying the computer-savvy to rig the ratings.

In that world, the answer would be obvious: Expand the good and repeal the bad. Indeed, we should expect to do this over and over again. We'll constantly need to double down on what works, remove what doesn't, and add new ideas and refinements into the mix. Policymakers are never omniscient, but they are, at their best, persistent. And that's how we'll move from the inefficient and expensive health-care system we have to the efficient and affordable system we want: one tweak at a time.

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