If the Supreme Court strikes key parts – but not all – of the 2010 health law, the best chances of fixing the gaps might come from the states.
The conventional wisdom – and conventional wisdom based on justices’ comments during oral arguments is not worth its weight in gold – is that the Supreme Court in late June (maybe June 28) will issue the health care ruling and strike the individual mandate. The conventional wisdom, further, is that it will probably, but not necessarily, also strike two related insurance market rules – covering people with pre-existing conditions (AKA guaranteed issue) and limits on how much more older people can be charged for coverage than younger ones (AKA community rating.) But it could strike only the mandate, tossing the other insurance rules back to Congress to address.
The health reform law minus the individual mandate, community rating and guaranteed issue won’t work so well, either as a coverage tool or as a cost-container. (Although Medicaid expansion and subsidies for people buying plans in the exchange would proceed). And the health reform law without the individual mandate but with everything else intact will work even less well. Judging from the experiences of states that have tried such regulations without a mandate, insurance premiums are likely to soar. In fact, it could be such a mess that it would actually increase pressure on legislators to address it.
There are a bunch of “Plan B” policy options – penalties for late enrollment, tax credits, consequences for opting out and so forth. (See our earlier post explaining some of them and providing resources.) But the Obama administration can’t impose them through regulation. Congress would have to pass a law to plug in the mandate gap and/or remove other portions of the law. That would require bipartisanship that we have not seen much of lately – bipartisanship designed to fix a damaged piece of legislation that the Republicans have vowed to repeal. Not an easy lift.
Which brings us to the states. The state responses may vary widely, meaning the state health insurance markets, prices and coverage rates could look different in, say, Vermont than in Texas. States can pass mandates, as Massachusetts already has. But imposing a mandate even in a liberal state is politically difficult. Many polls have found that people don’t like the mandate and it’s quite likely that a Supreme Court ruling will further taint it with the public. Many, if not most, people will not understand why it may be unconstitutional for the federal government to impose a mandate but OK for a state to do so. And states can implement a variety of “Plan B” options – all those carrots and sticks, incentives and tax breaks and deadlines and opt-outs – that would also be on the federal menu.
If you, as a health reporter, ask Democratic state officials now – before the court ruling – what they plan if the mandate is knocked out, you will probably get a response along the lines of: “We aren’t thinking of alternatives. We remain confident that the Supreme Court will uphold the Affordable Care Act.”
If you ask Republican state officials what they will do to plug the mandate gap, most will say something along the lines of: “We don’t need to fix this monstrous health care law. We are confident that President Romney and the new Republican Congress will repeal this intrusive Big Government takeover of health care.” (And I’m only exaggerating slightly.)
But occasionally one official may surprise you with candor and practicality. Virginia – a state with a Republican governor seen as having vice presidential hopes and an attorney general who has been at the forefront of the legal challenge to the health law – is one of the Republican-led states that is well advanced in planning for its insurance exchange. And health officials understand the role of the mandate in making it work – are willing to say so.
“If the mandate goes away, what we do is we look at enrollment periods, we look at penalties,” said Bill Hazel, M.D., Virginia’s secretary of health and human resources. “We would have to look at things that would make insurance more affordable for people who are being responsible.” (See video.)
So if your state officials say they don’t have any backup plans, ask again. The insurance commissioner, the health secretary, the governor’s policy aides and the top members of the legislative health committees (as well as the top health insurance executives in the state) have almost certainly begun thinking about this. If they won’t tell you before the Supreme Court ruling, ask again right after. And keep asking.
If you have seen good coverage about how states are planning for this contingency, email firstname.lastname@example.org and we’ll link in a future post.
Resources for explaining, localizing Supreme Court’s ACA decision
Webcast: To assist reporters who will need to localize the decision and what it means for their states and communities, AHCJ will host a one-hour online roundtable on Friday, June 29, noon ET, to offer suggestions on stories you can pursue right away and in the weeks ahead.