What if the individual mandate was unconstitutional?

An alarming article in Politico.com looks at what could happen if the Supreme Court determines that the Affordable Care Act’s individual mandate provision is unconstitutional—something that the current conservative leaning of the Court seems to indicate is somewhat more likely than not.

Assuming that such a possible decision by the Court follows that of the Eleventh Circuit Court of Appeals in ruling that the mandate is unconstitutional but the remainder of the ACA may stand, the Politico.com article anticipates some potentially disastrous consequences.

The provisions of the ACA—some of them already in force—include guaranteed issue, elimination of annual and lifetime limits, and a ban on basing premiums on health status, essentially decoupling coverage and premiums from insurance risk. Without the requirement for almost everyone to have coverage, there will be nothing to ensure that the risk pool contains a large percentage of individuals in good health as well as those with medical problems, and nothing to stop anyone from waiting until they’re sick or injured to demand coverage.

Without a subsequent change to the ACA, the consequences of full implementation in 2014 with no individual mandate would be dramatic jumps in premium rates in the individual and small group markets. These, in turn, would lead to further drops in enrollment, especially by those least in need of coverage, leading to additional premium increases as all but the sick retreat from the insurance market—the classic adverse selection-fueled death spiral.

As premiums for all but major employers shoot through the roof, those unfortunates who work for marginally-profitable small businesses or, worse still, pay for their own coverage will find insurance either unobtainable—as insurers exit the small group and individual markets—or unaffordable.

In a more politically rational world, a possible high court ruling against the mandate would be followed by Congressional action to modify other parts of the law—for example, by modifying the guaranteed issue provision. However, no-one who watched the cliff-edge battle over the debt limit can be confident that extremists in either party would compromise on any reasonable solution. What’s to stop lawmakers from continuing to refuse to modify their positions regardless of the impact on the insurance market? After all, the ACA is anathema to Republicans, while there are plenty of Democrats who despise the private insurance industry and who might be happy to see it close to collapse.

Even leaving political adversarial issues alone, Democrats will not be eager to renege on their promise that health insurance will be available to anyone, while many Republicans may also hesitate to revoke such an apparently attractive provision for fear of a subsequent electoral backlash.

The Politico.com article doesn’t try to guess the outcome, but it’s hard to be optimistic. A reasonable supposition—given the current inflexible mood in Congress—is that there will be no compromise until the insurance market is on the edge of disaster—or maybe already slipping over that edge. Insurance industry lobbyists are likely to find few votes for a rational solution until there is sufficient public outcry over skyrocketing premiums and cancellations of coverage by carriers abandoning the market to put politicians’ reelection chances at risk.

Roger Collier is a consultant specializing in health care policy issues who blogs at Health Care Reform Update.

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  • http://www.facebook.com/people/Natalie-A-Sera/743004321 Natalie A. Sera

    Well, if SCOTUS rules the individual mandate unconstitutional, it will destroy our healthcare system for all but the very rich, and eventually create fertile ground for a Democratic govt. take-over and a single-payer system. But many people will suffer and die in the meantime, and there is a limit on how much true charity care physicians and hospitals can provide. EMTALA will ensure that hospitals go bankrupt and prevent physicians from caring even for people who CAN afford it. Laid-off nurses and hospital workers will swell the ranks of the unemployed, insurance companies will discover that they can’t find enough clients to pay the high premiums, so they will go out of business, and physician incomes will plummet, and many will be forced to leave the profession. We will become a 3rd world country in terms of medical care. Is that what the Republicans REALLY want? They sure act like it!

    • Anonymous

      “The sky is falling!  The SKY is FALLING!!”

      No, Natalie, the entire issue will be taken back to the drawing table and a workable, constituionally sound alternative will be drafted. One that actually tackles tort reform and allows physicians to write off all of the charity care they NOW provide due to EMTALA.

      Do not know why you guys on the far left have to get so darned emotional about everything.  And, for the record, I am not a republican, either.

  • Bob Builder

    Consequences can be dealt with.  The assumption in this article is that only the individual mandate is unconstitutional and everything else will remain in place.  But that’s silly, since the IM is the central component of the bill.  Thus, the logical step (and the one supported by every Republican candidate, and at minimum half the country across all polls) would be to repeal the bill and get to work on true healthcare reform.  Not a bill that immorally uses the federal hammer of force and coercion to achieve the goals of one political party over 100% of the population.  It’s hard for me to believe a country based upon freedom and self-determination has tolerated this egregious overstepping of federal authority in attempting to control the lives of individual Americans.  But then again, the federal government is entitled to as much of our hard-earned money as it wishes, so why would they care about this?  For the record I am not a republican.

  • Matthew Bowdish

    The PPACA seems pretty unconstitutional to me, in addition to unsustainable, corrupt, immoral and a downright bad idea as evident by Massachusetts’ experience with this law.  A government that can force you to buy a private product can force you to do anything it wants.  There will not be a constitutional republic if the PPACA survives.

  • http://Www.insuremekevin.com/ Kevin Knauss

    Americans never like to be told what to do and we are big on personal responsibility. My solution to the individual mandate is to have folks who opt out of health insurance coverage sign a pledge that if they need medical attention (emergeny room, surgery, long term care, etc.) they will pledge to pay their bills and not declare bankruptcy and force the rest of the tax payers to foot the cost of their care. http://insuremekevin.com/2011/05/13/individual-mandate-solution/

  • Anonymous

    The health care system dominated by Wall Street health care cartels are a product that deserve to die.  How did Doctors allow themselves to be put in such a helpless position?  Where I live the HMO’s dominate and fee-for-service can not survive.  None of it is sustainable.  When both Wall Street and the “health care profit systems” crash, maybe we can build a decent system on top of the rubble.  Of course people will die, but they have been dying for a long time in the US from lack of access and care.  Don’t tell the magical thinkers who assume because they get care that everyone else is fine.

  • Anonymous

    Mr. Collier, you are correct to fear that the entire system will be profoundly damaged if this provision is removed.  

    I find it ironic – and telling about our society – that, in many states like Illinois where I live, it IS mandatory to have auto insurance if you own a car.  The reasons for that are pretty obvious, I think, and people realize that this law represents a trade-off, but an acceptable one.  But when it comes to insuring people for medical conditions, many find this so objectionable that they would compromise the viability of the whole system rather than let it (the individual mandate) stand.  (Of course, those who are out to repeal the ACO must be practically orgasmic at the prospect.)

  • Anonymous

    Such a mess!  It has been building so long that most don’t have the foggest idea of how we got to this point, and why it keeps getting worse.  We know it is getting worse.  Highest costs, higher costs – every aspect.  Folks are eating more unhealthy food and getting sicker – some folks are getting richer because of it.    Maybe Vermont will do something more sensible than Mass.  Maybe those demanding more of the latest drugs for preventable conditions due to diet will come to their senses and stop the unhealthy diet – ditch the drugs. Maybe politicians will realize that if we don’t have a sustainable healthcare system and a healthier population  instead of this hodgepodge, we will never we able to compete.  Insurance has to be mandatory – how can it be otherwise and have a healthcare “system”.  Something the US has NOT experienced.   The free market concept is great for cars, iphones, all the things we like and can sell to other countried etc but to build all those things to make us competive we need a healthly and educated populuation – we cannot rely on weapons, and mac macs to keep this country afloat  Congress is stuck because they are owned by the companies who have a lot to lose if we don’t buy their unhealthy products.  Health care reform does not go far enough. 

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