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Supreme Court could affect health care reform: Here’s how
By Sabrina Eaton    

Washington --The U.S. Supreme Court eventually will get the last word on the legality of the Patient Protection and Affordable Care Act’s mandate that individuals buy health insurance if they can afford it, or face a tax penalty. 

Meanwhile, conflicting lower-court decisions have raised a big question: What would happen to the reform package if the Supreme Court decides it’s unconstitutional for the government to force people to buy health insurance? 

The requirement’s purpose is to keep people from waiting until they are sick to buy insurance, as the new law will keep insurers from denying coverage for pre-existing medical conditions or charging sick people more money. 

“It’s just like your car insurance,” President Barack Obama told folks at a recent town hall meeting in Minnesota. “If the car insurance companies had to give you insurance, you’d just wait until you had an accident and then you’d be dialing on the phone from the wreck, and you’d say, ‘State Farm, I’d like to buy some car insurance, please.’ “ 

The law’s detractors say the government has exceeded its constitutional powers by ordering private citizens to purchase insurance. In testimony before the House Judiciary Committee, Virginia Attorney General Ken Cuccinelli II likened it to “a national police power.” Cuccinelli, a Republican, is lead plaintiff in a case working its way through the federal courts. 

“The federal government simply does not have the right to force someone to buy a product -- be it health insurance or any other type of goods or services that an individual may or may not want -- or face a penalty,” agrees Ohio Attorney General Mike DeWine, a former Republican U.S. Senator who spent his first day on the job adding Ohio to a lawsuit that Florida filed to challenge the law. 

Advocates of the mandate, including the health insurance industry, say that if younger, healthier people forgo insurance, costs would rise for everyone because a higher percentage of those with insurance would be older and sicker.

Uninsured people who become ill and can’t pay their medical bills also boost others’ rates because health care providers have to charge insured clients more money to recover losses from uncompensated care they provide. 

“The basic purpose of health insurance is to spread the risk of potential losses across a large and diverse pool so that no single person bears excessive costs in the event of an unexpected loss,” explains a brief that America’s Health Insurance Plans, an insurance-industry trade group, filed in one of the cases working its way through federal courts. 

Public concern is high enough that Obama was queried on the issue at an Aug. 15 town hall meeting in Cannon Falls, Minn. He told his audience that the law should be upheld if the Supreme Court follows existing precedent. If it doesn’t, he said: “We’ll have to manage that when it happens.” 

“There’s nothing wrong with saying to people who can afford to get health insurance, you need to buy health insurance just like car insurance,” Obama said. “You can’t wait and then go to the emergency room, because we can’t turn you away at the emergency room. And if you’re broke, then we’ll give you some help, but if you can afford it, you should buy it. That’s what the majority of courts have said.” 

Regardless of any Supreme Court ruling on the individual mandate, Obama said that the patient rights established in the bill will remain in place and states will continue to set up exchanges to give individuals better insurance rates by making them part of a larger purchasing unit. 

“No lifetime caps and no fine print that the insurance company gives you where you think you’re covered and then when you’re sick you go to try to get insurance and it turns out that they’re not covering you for that -- all that stuff is going to be in place,” Obama assured the audience. 

If the individual mandate is eliminated from the new law, the nonpartisan Congressional Budget Office projects that 16 million more people would be uninsured than if the mandate were in place. And premiums for those who stay in the system would rise by 15 percent to 20 percent. Fewer people using government subsidies to buy their insurance would actually save taxpayers more than $200 billion between 2011 and 2020, the budget office predicts. 

In a report he prepared for the Center for American Progress, a think tank headed by a former chief of staff to President Bill Clinton, Massachusetts Institute of Technology economist Jonathan Gruber forecast that even fewer people would buy insurance if the individual mandate is eliminated. He believes 24 million more people would be uninsured than if the individual mandate were in place and in that event, rates for those who buy in would rise 27 percent. 

Gruber advised former Gov. Mitt Romney -- now a GOP candidate for president -- on establishing the Massachusetts health insurance law that served as a template for last year’s federal legislation. He also advised the Obama administration on crafting the new law. 

If courts reject the individual mandate, Gruber said, it could be replaced by an “auto-enrollment” policy under which individuals would be automatically enrolled in insurance unless they “opt out.” Alternatively, he said late-enrollment penalties could be imposed on people who delay buying health insurance.

Gruber predicts the auto-enrollment model would direct a higher percentage of the populace into government-provided insurance. Under those circumstances, he said, the government would spend the same amount of money as it would if the individual mandate was in place, but just two-thirds as many people would be covered and premiums would rise by more than 10 percent. 

The impact of late-enrollment penalties would vary depending on the severity of the penalty. The greater the penalty, the more impact it might have. He expects that establishing late-enrollment penalties rather than an individual mandate would result in only one-third as many people being insured, and that premiums would rise about 20 percent. 

“No alternative to the individual mandate can cover more than two-thirds as many uninsured as the Affordable Care Act does,” Gruber said in his report’s conclusion. “Any alternative imposes much higher costs on those buying insurance in the new health insurance exchanges as the healthiest opt out and the less healthy face increased premiums.” 

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