Much Ado About A Mandate

When the Supreme Court begins examining the federal health reform law next March, much of the focus will be on the constitutionality of the individual mandate—the provision in the Affordable Care Act that would require most Americans to purchase health insurance.

Beyond all the rhetoric about a “government takeover of health care,” or the dreaded “death panels” and threats of rationing and imminent financial collapse, this is the key issue that that divides Americans. In fact, the mandate originally divided then-presidential candidates Hillary Clinton (who believed it was integral to the success of health reform) and Barack Obama, who held out hope that his vision of universal care could succeed without mandating coverage.

Once elected, under pressure from an insurance industry that threatened to oppose health reform unless they could be guaranteed millions of more customers for their plans, the President did change his mind and included the insurance mandate in the legislation. The administration also saw it as a fiscally sound move; the Congressional Budget Office estimates that removing the individual mandate will cut the number of individuals newly insured in half (from 32 million to 16 million), and will cause premiums in the nongroup market to rise by 15 percent to 20 percent.

But opposition to the mandate has persisted, and it is now a rallying point for conservatives who would like to dismantle the health bill in its entirety. According to the National Council of State Legislators, a total of 18 states have passed binding legislation opposing elements of health reform—most calling for repeal of the individual mandate. This occurred most recently in Ohio, where 66% of voters favored opting out of the federal insurance mandate—even as they rebuffed the Republican-led state’s new law limiting the collective bargaining power of public unions. (Parsing this confusing message from Ohio voters has eluded pundits from both political parties.) All together, 44 states have filed more than 200 of these anti-reform measures or have proposed their own alternatives to the federal law.

With all this legislative activity percolating at the state level, one might imagine that there is strong grassroots opposition to all of “ObamaCare”. But the picture is far murkier. First of all, even as some legislators advance bills that would flout the federal authority of the ACA, most of their home states are quietly using federal grants and technical assistance to help plan how they will set up health insurance exchanges, extend Medicaid to millions more enrollees and make other fundamental changes to meet the requirements of the 2014 roll-out of the health law’s major initiatives.

Meanwhile, polls indicate that many of the ACA’s provisions are very popular. In March, the Kaiser Family Foundation, which tracks public opinion on the health legislation, found that 74 percent of Americans would keep, rather than repeal, the law’s provision that bars insurers from discriminating against people with pre-existing conditions.  Other popular provisions include subsidies to help low and moderate income people buy insurance (79 percent); making insurers meet a threshold of spending on actual medical care, as opposed to administrative costs and profit (66 percent); and expanding Medicaid (66 percent). There is also strong support for initiatives that were rolled out earlier this year, like keeping adult children on their parent’s health plans, eliminating co-pays for preventive care and screening, and a ban on denying coverage to chronically ill children.

So what is it about the individual mandate that continues to foment such fierce opposition to the federal health law?

The New York Times recently quoted Paul Starr, the estimable professor of health policy at Princeton University as saying of Obama as a presidential candidate, “I think he saw that there could be a backlash against a mandate and that there needed to be some other kind of approach. So in a way, I’m sorry he didn’t stick to his original position.”

With all due respect to Professor Starr, I am not sorry that Obama embraced the mandate. It is there to impress on Americans that in order to pay for all the benefits of universal health care, everyone—young, old, sick, healthy or “invincible”—needs to be part of the “pool.” And as far as mandates go, this one is far from being onerous. If an individual decides not to purchase health insurance, he will have to pay a measly penalty of $95 in 2014, then $695 a year in 2016, when the penalty is fully implemented. That’s less than what it would cost each month if my family of five had to pay for health insurance on the individual market.

Clearly there are plenty of Americans who just don’t like the idea of the federal government mandating much of anything, let alone that they have health insurance. These same folks oppose actions as varied as seat belt laws, limits on carbon dioxide emissions, and bans on snowmobiling in national parks. They embrace the Tea Party’s notion that the free market will solve all of the nation’s problems despite ample evidence to the contrary. And they believe that because they exercise, eat right, and are in good health, they don’t need insurance. Mandating that they purchase it serves only to subsidize those other lazy Americans who eat too much, drink too much, smoke and otherwise sabotage their health. Where’s the personal responsibility, they love to argue, why can’t these people just get jobs?

What they fail to understand is that without comprehensive health insurance, most of us are just one job loss, one serious illness or one accident away from medical bankruptcy.

Besides the Tea Party types who fundamentally oppose most government mandates, there is another very different group of disgruntled Americans who haven’t come around to supporting the insurance mandate. These are the folks who resent the ACA’s strong dependence on the for-profit insurance industry with its checkered history of high premiums, dropping people when they get sick or pregnant, refusing to provide coverage to anyone with a “pre-existing condition” and other practices that in the past, served only to improve the bottom line. Some of these people were strong, early supporters of the “public option,” a health insurance program run by the federal government that by competing in the state exchanges with commercial plans, promised to help keep costs and premiums levels down. Perhaps as was the case in Ohio, these voters just aren’t convinced that their state health insurance exchanges will provide enough affordable choices.

The fact is that much of the opposition to the individual mandate can be overcome with more effective communication from the Obama administration. It has become such a hot-button issue mainly because it has been co-opted by politicians who are interested only in toppling Obama’s signature legislation, and in the long run, his chances of reelection.

I think this is becoming clearer to segments of the population—like independent voters and older people—who realize that fundamental health reform is necessary as the economy continues to flounder, unemployment persists and health care costs continue to rise. And without a mandate, health reform risks being deemed insolvent, a lesson made all too clear by the recent demise of the CLASS Act—the government’s voluntary plan for long-term care. In fact, according to a new CNN poll, 52% of Americans now indicate that they favor mandatory health insurance, up from 44% in June. The survey also found that 47% oppose the health insurance mandate, down from 54% in early summer. Remarkably, this is the first time since the ACA was passed that more Americans support the insurance mandate than oppose it.

With the Supreme Court now agreeing to consider the constitutionality of the individual mandate the issue is moving into center stage. Some supporters of reform—like Starr—are proposing what they consider more palatable alternatives to the mandate; one would have people be automatically enrolled in a plan unless they actively opt out of participation. The other alternative is to make insurance coverage voluntary, but have incentives for those who sign up immediately and heavy penalties and waiting periods for late enrollment. Jonathan Gruber, an economics professor at MIT offers greater detail and analysis of these alternatives in a brief he prepared for the Center for American Progress, but essentially, he writes, “a bill without the individual mandate will cover significantly fewer persons, with more erosion of employer insurance, and lead to significantly higher premiums.” Perhaps most importantly, removing the individual mandate, according to Gruber, “will raise our uncertainty about what health care reform can accomplish.”

There is plenty of conjecture about the Court’s decision—and its effect on the 2012 elections. But the fact is that most constitutional scholars maintain that the mandate will survive this constitutional challenge and the basic premise of the health law will stand. Major provisions of the law are already being rolled out and changes are being made in how health care is delivered and how providers are compensated. Despite the political rhetoric and the grand-standing by state officials, the slow process of refiguring and reforming health care in this country is, by necessity, well under way.