Supreme Court could strike mandate from health law

By Matt DoBias 

If the Supreme Court strikes down the individual mandate at the heart of President Barack Obama’s health care law, Congress may have to “fix” the rest of the law to prevent a disaster.

But what if Congress isn’t in the mood to “fix” anything? With all the bickering over whether the law should even exist, why wouldn’t lawmakers just keep fighting as many of them try to undo the whole thing?

That’s a real scenario that the Obama administration could face, after a divided 11th Circuit Court of Appeals ruled last week that the federal government could not require Americans to buy health insurance.

A series of split decisions at the appellate level virtually assures that the nine justices of the Supreme Court will have the final say in the matter. But if the high court finds the mandate unconstitutional, but leaves the rest of the law untouched, then Obama’s signature achievement could move forward without its most effective — and controversial — tool to expand coverage.

That’s one possible outcome, since the 11th Circuit ruled that the mandate could be separated from the rest of the law — meaning that the rest of the law could survive even if the mandate is struck down.

The result could trigger a complex scenario in which insurers still have to cover virtually anyone regardless of their health status and history, but without a mechanism that requires everyone to participate. And if healthy people don’t have to participate, premiums for everyone else could shoot through the roof as insurers cover more people with serious health problems.

Such a move could force the very same insurers who lobbied Congress for the individual mandate to persuade lawmakers to strip away provisions Obama and others sold as part of a grander bargain to protect patients’ rights — like the requirement to cover everyone with pre-existing conditions.

Private health insurers are nervous about such a scenario. The 18-month-long health reform battle on Capitol Hill left behind scars not easily healed. Now, Democrats and Republicans are so divided over the law that one of the simplest possible “fixes” — the repeal of the widely hated 1099 reporting requirements for small businesses — took months to accomplish.

“In a rational time, what you would have is the Supreme Court upholds the decision on the individual mandate and then you have a broad negotiation,” between the White House and Congress, said Paul Ginsburg, president of the Center for Studying Health System Change. “You can’t expect that in these times, because people don’t work on these compromises too readily anymore.”

It also leaves the White House in a lurch. As recently as last week, White House adviser Stephanie Cutter wrote in a blog post that the loss of the mandate would lead to double-digit premium increases in the individual market and jeopardize provisions in the law aimed at removing long-standing barriers to coverage.

If everything else in the law stays intact, the removal of the mandate as a cudgel could greatly upset the insurance markets, said Michael Franc, vice president of government studies at The Heritage Foundation. Premiums would skyrocket, the number of uninsured people would increase and many insurers might simply decline to participate in a reformed health care system, he said.

“You’re naked on that front,” he said. “You have a statute on the books with all these implementation dates. Take away the mandate, and what you’re left with is an insurance market that really wouldn’t work.”

If Congress is forced to revisit the law, the process could easily lead both parties to go beyond simple fixes, Franc said. Democrats might push for a type of single-payer system, he explains, while Republicans could lay out a more market-based approach.

Either way, he said, “The status quo could not stand. Congress would have to reconsider and go one way or the other.”

The reform law’s reach reflects the enormity of the $2.5 trillion per year health care sector it aims to overhaul. It touches nearly every aspect of the way care is delivered and paid for, and even the slightest tweak to one part of the law could have a big impact on other parts.

Changing the level of insurance subsidies, for instance, could affect the number of Americans who seek coverage, which, in turn, could affect hospitals by adding to their level of uncompensated care. And so on and so on.

That the provisions in the reform law are so reliant on each other comes as little surprise to those who have labored to change the system before. But it also serves a political purpose. By design, it makes it harder for critics to unspool the law.

Even while House Republicans have passed legislation to repeal the law — all at once, and piece by piece — the Democrat-controlled Senate has been a reliable backstop for the White House.

“You start to work out scenarios that remind people of the debt ceiling negotiations, which are games of chicken,” Ginsburg said. He added that legislative gridlock could force the administration to delay implementation on other parts of the law.

“Does the administration have no choice but to go ahead and implement the exchanges without a mandate, or could they hold off?” Ginsburg asked.

The court challenges, more so than congressional politics, pose the biggest threat to Obama’s signature legislative achievement. The insurance requirement is seen as the law’s spine, and while health policy experts believe there are other ways to expand coverage, few of the options would be as effective as a mandate.

“I would think even the administration might not want to go ahead and have strikingly high premiums on its exchange and low takeup,” Ginsburg said. “It’s not something to point to with pride when it comes to the accomplishments of reform.”