A Victory For Health Reform And Good Law – Health Affairs Blog

by Timothy Jost

To understand this controversy, it is necessary to understand what the minimum coverage requirement actually says and why Congress adopted it. The law provides that, beginning in 2014, if you are not covered by health insurance from your job and are not eligible for Medicare or Medicaid; if you do not have a religious objection to having health insurance or belong to a health care sharing ministry; if you have been uninsured for 3 months or more; if you are not a Native American; if you earn more than the tax filing limit (currently $18,700 for a couple); if you can find a health insurance policy for less than 8 percent of your income; and if it does not otherwise cause you a hardship, you must purchase a basic, high cost-sharing health insurance policy or pay a tax penalty. If you don’t pay the penalty, you cannot be criminally prosecuted and the IRS cannot place a lien or levy on your property. Tax credits will also be available to help many of those subject to the mandate (a small minority of Americans) to purchase the required insurance.

The Purposes Of The Minimum Coverage Requirements

Congress adopted this provision for two reasons. First, the requirement was the only way to get to universal coverage using private insurance. If you require private insurers to insure people with pre-existing conditions, the health insurance market will collapse if you do not also require healthy people to participate in the market. Only sick people will purchase insurance, while healthy people will wait until they get sick or have an accident and then purchase insurance. Insurance will soon be unaffordable to all. Congress did not consider an alternative which would clearly have been constitutional—a tax-financed public insurance system like Medicare for all—because it wanted to make our private insurance system work.

Second, the use of health care is in the end unavoidable. We will all need health care sooner or later, and when we do, someone will have to pay for it. If an individual is insured, the insurer will pay for it. Each year, however, $43 billion worth of care is received by people who do not have health insurance and who do not pay for it. This cost is passed on to the rest of us—to our employers, insurers, health care providers, and the government. This level of cost-shifting may be understandable today, when many cannot afford health insurance, but once tax credits are available so that no one needs to be uninsured, it is no longer tolerable, The purpose of the law, that is, is to discourage this freeloading and to encourage individual responsibility (something conservatives used to be in favor of).

Judge Steeh’s Decision

The Michigan case, however, was the first case to reach the merits of the claim. The court squarely upheld the minimum coverage requirements. Judge Steeh ruled first on the jurisdictional claims raised by the federal government. Surprisingly, he held that the plaintiffs did have standing to challenge the law and that it was “ripe” for adjudication, even though it will not go into effect until 2014. He accepted the plaintiffs’ argument that they must already “reorganize their affairs” so that they will be able to afford health insurance in 2014. Although this argument seems spurious (who knows whether the individuals will or will not be insured or required to purchase insurance three years from now), and a claim that the plaintiffs were already suffering an injury was rejected by the judge in the California case, Judge Steeh refused to dismiss the case on this basis, obviously eager to get to the merits.

Once he got to the merits, the judge made short work of the nonsense argued by the opponents to the law. First, he recognized that for nearly six decades the Supreme Court has interpreted the Commerce clause broadly to permit Congress to regulate the use of the channels of interstate commerce; the instrumentalities of interstate commerce and persons and things in interstate commerce; and activities that substantially affect interstate commerce. The court cited Supreme Court cases recognizing that Congress could regulate purely local, non-commercial activity as an integral part of a statutory scheme that permissibly regulated interstate commerce. The court distinguished two cases from a decade ago that had struck down legislation regulating non-economic activity. And the court recognized, quoting earlier Supreme Court cases,

In assessing the scope of Congress’ authority under the Commerce Clause’ the court’s task ‘is a modest one. ‘The court need not itself determine whether the regulated activities ‘taken in aggregate, substantially affect interstate commerce in fact, but only whether a “rational basis” exists for so concluding.

Judge Steeh then turned to the “rational bases” of the minimum coverage requirement. First, he observed that Congress rationally concluded that the decisions of individuals to forego purchasing insurance coverage drives up the cost of insurance for everyone else: “The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers.” The decision whether to purchase insurance or to attempt to pay for health care out of pocket is plainly economic.

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When Republicans Were for Mandates | Gooznews

by MERRILL GOOZNER

Last week, a federal judge rejected the first of a dozen conservative legal challenges to the mandate requiring individuals to buy health insurance starting in 2014. In the first major ruling on the merit of the cases, Judge George Steeh of the Eastern District of Michigan ruled the commerce clause of the constitution gives the federal government the right to regulate health insurance sold within states. As Tim Jost, professor at Washington and Lee University points out in a post on the Health Affairs blog, the mandate is a necessary complement to one of the most important national regulations included in reform - the requirement that insurers cover all comers no matter what their pre-existing medical condition. Coverage would become unaffordable if healthy people were allowed to wait until they got seriously ill before buying coverage.

There's not much left to be said on the wisdom of including the mandate in reform. I argued during the debate that the amount of money lost through free-riding non-payers would be relatively small in the larger scheme of things, and not worth the political liabilities. We'll never know if I was right on the economics. I was obviously correct on the politics. The Tea Party wing of the Republican Party has made opposition to the mandate one of its main rallying cries.

So let us now turn to their hypocrisy. Where were these tea-baggers when a Republican Congress passed the prescription drug benefit for seniors in 2003? That insurance program (Part D charges an average premium of $35 a month, taken directly out of senior citizens Social Security checks) is "voluntary," but you can opt out only if you agree to pay a penalty when you decide you want to get coverage. The penalty is one percentage point increase in the premium for every year the senior stays out of the program.

So what is the takeaway lesson from this little bit of hypocrisy? Republicans back mandates that charge higher prices later as the penalty, while Democrats prefer mandates that charge penalties up front. I'll leave it to you to decide who has the greater claim on political genius.

A Consumer's Guide To The Health Law, Six Months In - Kaiser Health News

By Mary Agnes Carey KHN Staff Writer

By Sept. 23, the six month anniversary of the enactment of the health overhaul, many of the law’s provisions will be in effect. Most consumers, however, won’t see any changes until after Jan. 1 when their new health plan year begins.

In the meantime, employees will be getting ready for fall’s “open enrollment” period, when they pick their health coverage for the following year. In addition, people who buy their own health insurance will be researching their options. And Medicare beneficiaries will be able to change their coverage later this year, if they want to. Here’s a look at how the law affects people who get their coverage at work, buy their own health insurance or are enrolled in Medicare.
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Medicare Update: Senate Finance Committee Releases Legislative Language of America's Healthy Future Act

On October 19, 2009, the Senate Finance Committee released the actual legislative language of the America's Health Future Act of 2009 (Act), which will reportedly be known as S.1796.

The Act is 1502 pages in length.

Senate Democratic leaders may now work to combine the Act with the Senate Health, Education, Labor & Pensions (HELP) Committee's Affordable Health Choices Act, which the HELP Committee approved in July 2009.

Read/Download America's Health Future Act of 2009