The not-so-surprising news today is that the federal government will appeal Monday's ruling by a Virginia federal court judge who found the individual requirement to purchase health insurance unconstitutional. The appeal is just one of many that are likely to occur as this issue marches its slow, winding way up to the U.S. Supreme Court.
Part of the difficulty of implementing health reform is reacting to changing circumstances in the law or in the insurance markets to keep health reform on track. Supporters of health reform must now draw up contigency plans to move the law forward if the individual mandate must fall away before it takes effect in 2014.
Can health reform survive without the mandate? It doesn't appear that all of it could as currently written. While Judge Henry Hudson declined to find the entire law unconstitutional, it is a big piece of legislation with many working parts -- and many of those work in tandem with one another. The mandate appears to be crucial to the popular element of health reform that insurance companies can't discriminate based on preexisting conditions. Without the new, healthy customers that the mandate would bring to insurance companies, the requirement that they cover everyone may very well ruin the economics. Since health reform chose to largely use the existing private insurance infrastructure to expand coverage, it's unclear how the additional people would still get covered. The administration has shown that it is sensitive to concerns about the destablization of insurance markets by relaxing some of the laws while health reform is being implemented. To think it would attempt to force insurers to cover everyone without the benefit of the new customers would be a significant shift from precedent.
To keep health reform intact, without the mandate, would require some other policy that approximates the impact of the mandate but does not REQUIRE everyone to participate. A few ideas could be providing incentives, such as tax credits, so that it would be economically unwise NOT to purchase health insurance. Another idea is to give people the option of signing a waiver that they won't use the health system if they choose not to be covered and then get sick. The first would undoubtedly make the cost of health reform significantly more expensive, while the latter might be difficult to monitor and enforce.
Without the mandate or something approximating it, the goals of health reform might need to change. The Medicaid expansion -- which would cover about 16 million additional Americans -- and the insurance exchanges could presumably still go forward. People meeting income requirements could still get subsidies to purchase insurance on the exchanges. But, if the pre-existing condition protection is tied to the mandate, it's questionable whether the sickest people would be able to find coverage through the exchanges. Health reform would then be about improving access moderately, and providing a new central clearinghouse to compare plans via the exchanges. But it would seemingly no longer be the health reform that covers nearly all of those who are currently uninsured.
Without the mandate, Congress would almost certainly have to turn its attention back to health reform. Things would get interesting. No mandate likely means having to reach consensus on an alternative policy, and/or more money, if lawmakers still want to reach the goal of covering as many people as possible. The final word on the mandate probably won't come down until a couple of years from now, and it's anyone's guess what the politics in Congress will be at that point.
