In-depth briefing

The individual mandate: Health-care's inherent controversy

President Obama's health-care bill requires that every American have health insurance. Is that constitutional?

Who first proposed making health insurance compulsory?
The Heritage Foundation, a conservative think tank. In the late 1980s, when Democrats were pushing to require employers to provide health insurance, the foundation started thinking about ways to achieve universal coverage without placing a heavy burden on business. Its experts soon encountered the "free rider" problem: In a system where insurers are barred from refusing applicants with pre-existing conditions, many people — especially the young and healthy — would only buy a policy when illness struck. But if only sick people bought coverage, insurers would pay out more in doctors' bills than they received in premiums, and quickly go bust. To overcome this death spiral, the Heritage Foundation suggested that every American be required to buy health insurance, a requirement known as the individual mandate.

Which politicians took up that idea?
Many Republicans did in the early 1990s, after President Clinton introduced a plan that would have forced companies to cover employees. "I am for people, individuals — exactly like automobile insurance — having health insurance and being required to have health insurance," said Newt Gingrich, then House minority whip, in 1993. When the Clinton plan collapsed in 1994, talk of the individual mandate died with it. But a decade later, Mitt Romney, then the governor of Massachusetts, resurrected the concept for his state health-care plan, which requires residents to buy health insurance or pay up to $1,212 in annual penalties. "It's a Republican way of reforming the market," Romney said when the law debuted, in 2006. "[To have] people show up [at a hospital] when they get sick, and expect someone else to pay, that's a Democratic approach."

So why did Obama adopt a Republican proposal?
At first, he didn't want to. During his 2008 campaign for the Democratic nomination, Obama ran a TV ad criticizing rival candidate Hillary Clinton's support for a mandate, saying she would force everyone "to buy insurance, even if you can't afford it." But after President Obama and the Democratic Congress began to construct his health-care plan, advisers warned that free riders would undermine the objectives of extending insurance coverage to anyone who wanted it. For health reform to work, young, healthy people had to be pushed into the pool, to spread cost and risk. So the president allowed his 2010 Affordable Care Act to incorporate a provision that, by 2014, all Americans must have health coverage or face a tax penalty. Conservatives decried that directive as a gross infringement of individual liberty, and their anger helped fuel the rise of the Tea Party. Twenty-six states and the National Federation of Independent Business are now challenging the mandate's constitutionality at the Supreme Court, which will make a final judgment by June.

How has Obama responded?
His administration argues that the mandate is authorized by the Constitution's commerce clause, which allows the federal government to regulate interstate economic activity. Several conservative judges agree. In a November appeals court decision that upheld the mandate, Judge Laurence Silberman, a Reagan appointee, declared that Congress must "be free to forge national solutions to national problems." And this summer, Judge Jeffrey Sutton — a George W. Bush appointee to the 6th Circuit Court of Appeals — concluded that the individual mandate is a legally sound way to prevent taxpayers and hospitals from having to pick up the cost of treating the uninsured. "Not every intrusive law is an unconstitutionally intrusive law," he wrote.

Haven't other judges disagreed?
Yes. In August, the 11th Circuit Court of Appeals declared that it could find no precedent for ordering Americans to buy health insurance. "Even in the face of a Great Depression, a World War, a Cold War, recessions, oil shocks, inflation, and unemployment," the majority wrote, "Congress never sought to require the purchase of wheat or war bonds, force a higher savings rate or greater consumption of American goods." Other federal judges and critics of "Obamacare" warn that the mandate sets a dangerous precedent that the government could use to make citizens purchase whatever it deems good for them — or for the economy. "Congress could require every American to buy a new Chevy Impala every year," said a 2009 Heritage Foundation report.

What happens if the individual mandate is voided?
It depends. If the Supreme Court decides that the Affordable Care Act can't function without the individual mandate, it could strike down the entire law. But it might declare the mandate "severable," and remove that particular part of the law, while letting the rest of it limp along, with far fewer uninsured people covered and less ability to rein in costs. Some experts have proposed that instead of the uninsured being required to buy insurance, they could be "nudged" into the health-care system by giving them a window of time during which they could buy insurance relatively inexpensively; once that window closed, the cost would rise sharply. The problem with any alternative to the individual mandate, said Paul Ginsburg, president of the Center for Studying Health System Change, is that it would have to be approved by the bitterly divided Congress. "You can't expect that in these times," he said. "People don't work on these compromises too readily anymore."

How the Supreme Court could punt
Next year's Supreme Court hearing has been billed as judgment day for Obama's Affordable Care Act. But it might end with no judgment at all. Before the justices rule on the individual mandate's constitutionality, they will first have to decide whether the 1867 Anti-Injunction Act bars the claimants' challenge. That law prevents citizens from challenging the legality of a tax before it goes into effect. If the court finds that the penalty for defying the Affordable Care Act's mandate is a tax, they could push a legal challenge back to 2015, when the first fines will be levied. And that, said Simon Lazarus, an expert at the National Senior Citizens Law Center, might "be a good solution for a court that doesn't really care to be Public Issue No. 1 in an election year."


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