If the individual mandate falls, can the health care law stand?

March 23, 2012

On March 26 the U.S. Supreme Court will begin hearing arguments in the case on health reform. At the center of the controversy is the constitutionality of the individual mandate. Advocates say the mandate is the key to making the law work and congress has the power to regulate commerce among the states, but opponents argue that Congress does not have the authority to require all citizens to buy health insurance or pay a penalty.

The decision, due in late June, could be one of the most important the Supreme Court has ever made. The Court will hear six hours of arguments over three days – more time than any case in over 45 years. So, what happens if the Court strikes down the individual mandate?  Will the entire health care law go down with it?

The individual mandate is an integral part of the health care law. Its purpose is to increase participation and minimize the adverse selection that could happen if a large percentage of healthy people do not buy insurance.  But is the mandate the only way to ensure enough participation? Many, including the GAO, have suggested alternatives that might work as well, maybe even better than, the individual mandate. Here are a few of the proposed options:

  • Strict enrollment periods. If missed, the individual would have to wait until the next year to be eligible for insurance.
  • Levy a tax on those who don’t purchase insurance and offer a tax credit to those who do.
  • People could opt-out without paying a penalty, but would be ineligible for benefits for a specified length of time. In addition, people who neither opt out nor purchase insurance would be charged a penalty.
  • Raise premiums for people who don’t purchase insurance during the initial open-enrollment period. This option is similar to rules for enrollment in Medicare Part B and Part D, where individuals who don’t enroll during their initial elegibility period pay a penalty in the form of a higher premium, for as long as they are Medicare beneficiaries.
  • Let states adopt their own individual mandates.

If the court finds that the “individual mandate provision is both unconstitutional and ‘necessary and essential’ to the health care reform law, then the entire law will go down with the provision,” according a recent InsuranceNewsNet artcle by Bryce Williams. If the court strikes down the mandate, but allows the rest of the health care law to stand, there are many alternatives that could take its place. But would Congress be able to work together – during an election year – to revise the health care law? More likely, any changes to the law to ameliorate the loss of the individual mandate would have to wait until 2013 after a new Congress is seated.

Opinions and predictions from experts on both sides of this political – and now legal – football abound. At Extend Health, we tend to believe that the Court will uphold the mandate, and if they don’t uphold it, they will rule that it is severable from the rest of the ACA’s provisions. No one knows for sure, but you can count on the prognostications and rhetoric to continue as we all wait for the court to announce its decision in June.

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare exchange.

One Response to “If the individual mandate falls, can the health care law stand?”

  1. […] If the indi­vid­ual man­date falls, can the health care law stand? (extend​health​.word​press​.com) […]

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