Reform May Survive if Supreme Court Kills Mandate
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The Fiscal Times
June 18, 2012

The Supreme Court’s imminent decision on the Affordable Care Act will trigger a political firestorm whether they accept the legislation in its entirety, throw out every page of the 906-page bill or do something in between, which is the most likely outcome.

If the high court follows the polls, it probably will rule the requirement that individuals purchase insurance – the mandate – is unconstitutional but leave the rest of “Obamacare” intact. A CBS/New York Times poll released earlier this month showed that 41 percent wanted the entire law overturned, 24 percent supported it fully and 27 percent supported it but wanted the mandate eliminated.

Pooling the latter two groups suggests there is majority support for the coverage expansion, insurance protections and delivery system reforms contained in the bill – as long as there is no mandate. It was only the Obama administration’s decision to include the requirement that individuals purchase health coverage – something done to win insurance industry backing for the law – that gave opponents the cudgel they needed to stoke widespread opposition to reform.

The insurance industry, recognizing many of the reforms are popular, is already preparing for a thumbs-down ruling on the mandate. Three major carriers, UnitedHealth, Aetna and Cigna, said last week they would continue to allow young adults to stay on their parents’ plans until age 26, pay for 100 percent of preventive services and eliminate lifetime caps on coverage, reforms from the ACA that are already in place.

Notably, they did not mention two of the most important and popular changes that industry officials say depend on everyone or nearly everyone buying policies: guaranteed issue and community rating. Translated into everyday language, those regulations require insurers to sell coverage to all comers at any time without changing the rates to reflect their claims history (the law does allow insurers to charge older adults up to three times more than they charge younger people, recognizing people use more health care as they age).

America’s Health Insurance Plans (AHIP), the industry trade group, claims millions of people who already have insurance will drop it once they realize they can sign up at any time. Why bother buying a plan when you can sign up in the emergency room after you’ve had a serious car accident?

Enacting guaranteed coverage at community rates without a mandate will lead to a “death spiral” of rising rates for everyone who stays insured, the industry’s trade group says. “In 1993, Kentucky attempted health insurance reforms without a mandate. Costs skyrocketed for consumers, and the number of uninsured increased,” AHIP’s public education campaign, dubbed “The Link,” says on its website.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.