Wednesday, March 28, 2012

Can we still reform health insurance without a mandate? Yes, but...

Ok, so it wasn't the best day for President Obama's health care plan yesterday, was it? Not really. The Government's defense of the individual mandate wasn't exactly impressive and many now think the chances of the Supreme Court overturning the Affordable Care Act are larger now than they were Tuesday morning.

There's a long, long way to go before the SCOTUS renders a decision and all the speculation from all sides about what will happen is just that. Speculation. Everybody needs to take a deep breath, relax, chill, chillax, etc. From following the coverage closely my take is that too much is being made of the questioning by some Judges yesterday. There has been tough questioning before, in lower Courts, that ultimately ruled in favor of the mandate being Constitutional. The so-called "experts" say the chances of the mandate took a hit yesterday, but nothing close to a death blow.

Further, I've heard several SCOTUS experts explain that while the oral arguments occurring this week make for compelling courtroom drama, they often have a rather small part to play in the ultimate decision by each of the Court's Judges. More powerful are the dozen's of briefs filed both pro/con toward the health care law. Many are repetitive but both sides of the case have been laid out, in fine detail for these judges. THAT is where the bulk of the individual decisions likely comes from.
I found this article by Jonathan Cohn, author of "SICK", very interesting and timely. It takes a hard look at one state, New Jersey, that tried to reform its health care sector without an individual mandate back in the 1990's. After a promising start, cracks began to show in the reform. Big ones. Participation in regulated plans dropped dramatically and the kind of person that remained was unfavorable. Healthy people left the plan, leaving the sicker ones, which drove premiums up between 48% and 155%, depending on the particular plan involved. The average age of the participants went from 41.9 to 48.4 in just five years. Older. Sicker. More expensive.

Give it a read...

Reform With No Mandate? Ask New Jersey About That...
By Jonathon Cohn/March 21, 2012

On Monday, when the Supreme Court hears arguments about whether the Affordable Care Act is constitutional, the justices will also contemplate a policy issue: Is it possible to reform the private insurance market, making affordable coverage available to all, without an individual mandate?
The Obama administration has told the court that if it invalidates the mandate it should also invalidate two key insurance reforms that would prevent discrimination because of preexisting conditions. On this, the administration has a somewhat unusual ally: The insurance industry. Although insurers have fought many parts of the health law, they have long favored the establishment of a mandate, which requires almost everyone who can afford it to buy health insurance or pay a fee. Without it, they say, the reformed market cannot function. (Critics point out that a mandate would also help insurers generate more business.)
Legally, the administration's argument is as potent as it is risky. The Constitution says that the federal government may do whatever is "necessary and proper" to carry out its other functions. The Supreme Court historically has interpreted that power broadly. If insurance market reform really is more prone to failure without a mandate, that fact alone could, in the eyes of the justices, make the law constitutional.
But is the administration's claim correct? For some clues, the justices could examine what happened in New Jersey, a state that tried to reform its insurance markets without a mandate -- and failed pretty miserably.

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