What should be done if the Supreme Court strikes down the Affordable Care Act’s individual mandate?
If the Court does anything—which, of course, it should not—it would likely only remove the mandate and possibly the associated insurance company regulations and subsidies for purchasing insurance. Striking down the entire law would be a dramatic and unlikely step, even for this conservative bench.
So where would the law stand if the mandate disappears, and what could be done to patch it?
Many Democrats and their political allies have been publicly and privately talking up the benefits of the Affordable Care Act outside the mandate—like the Medicaid expansion, the ongoing creation of state exchanges for buying health insurance, the various cost-control measures in the bill—and downplaying the severity of losing it.
“There’s been entirely too much attention paid to the mandate, and not enough attention paid to what the law will do and the ways that it’s already benefiting millions and millions of Americans,” Ethan Rome, executive director of the progressive coalition Health Care for America Now, which was instrumental in getting the law passed, told me in a phone interview. “The sport of speculation about what the Court will do is in overdrive, and as part of that, people are overthinking how to make the law work if one thing or another about it is changed.”
Here’s a quick look at some policy options to move the ball forward on healthcare reform if the mandate is struck down:
Helping the uninsured to buy coverage. The idea behind a mandate was that by increasing the number of people buying insurance, it would lower the costs for everyone else—both by broadening the base of premium payments, and reducing the external costs of the uninsured seeking treatment in emergency rooms. More urgently, since the ACA required insurance companies to provide coverage to people with pre-existing conditions, it had to have a mechanism to ensure that people wouldn’t just wait until they got sick and then purchase insurance.
But if the mandate is gone and you can’t force people to buy coverage, there are several ways you might be able to entice them to do so:
Subsidies. In the House version of the Affordable Care Act, a surcharge on the wealthy would help fund subsidization of health insurance for people who couldn’t afford it. Annual household income in excess of $350,000 but less than $500,000 would be have a 1 percent surcharge attached; annual household income in excess of $500,000 and less than $1 million would have a 1.5 percent surcharge; and annual household income in excess of $1 million would have a 5.4 percent surcharge. Thursday on Capitol Hill, House minority leader Nancy Pelosi said that in the event the mandate is struck down, “there could be something passed in the Congress, similar to what we had originally in the House bill, which was a surcharge on the wealthy to pay for aspects of [coverage].”
Age rating. The government could entice young and healthy people to buy coverage by allowing health insurers to charge them less, which is known as age rating. The ACA allows insurance companies to charge the elderly only a maximum of three times more than the young, but if that ratio were revised upward, it could make health insurance more attractive to the healthy. But the flipside is that it would necessarily make coverage for the elderly even more expensive, and as Ezra Klein notes, age rating hasn’t done much for affordability of coverage in New Jersey, where it’s been in place since 2008.
Penalties for not buying coverage. Aside from helping people buy coverage, you can penalize them for not doing so. That’s what the individual mandate does, instituting penalties ranging from $695 for poor Americans to $12,500 for wealthy ones for not obtaining health insurance. You can create penalties in other, smaller ways without a mandate—though we should note that these aren’t particularly progressive options. If you think of the uninsured as being all free-riders, then penalties make sense. But again, a majority of the uninsured are either too poor to afford insurance or don’t have a job that offers it, and are often both. So penalizing them further isn’t terribly helpful.
Thinking progressively and outside the box. After considering how regressive penalties for not buying insurance can be, you might realize a dirty little Democratic secret, if you haven’t already: the individual mandate isn’t all that progressive. Yes, it makes the Affordable Care Act work better, and should be preserved. Yes, the Supreme Court would unmistakably enter into a new period of activist overreach if it strikes it down. But remember this was originally a Republican idea.
So what are some truly progressive alternatives to the mandate?
An obvious answer is single-payer health insurance. Former Labor Secretary Robert Reich wrote in March that if the Supreme Court strikes down the individual mandate but leaves the pre-existing condition requirement in place, “Obama and the Democrats should say they’re willing to remove that requirement—but only if Medicare is available to all, financed by payroll taxes.”
The political will for a single-payer system almost certainly doesn’t exist right now, however. (Though Democrats could start nudging towards it, for example by lowering the Medicare eligibility rate to 55).
In the meantime, the public option might be the best viable option for a progressive improvement of the healthcare system—and one that would seem much more attractive if the Supreme Court guts all or part of the ACA.