5 Big Questions About Obama’s Healthcare Plan
Next week, the United States Supreme Court prepares to hear oral arguments from 26 state attorneys that are questioning the constitutionality of the Patient Protection and Affordable Care Act, or ACA. It will be a key moment in an already-ugly political battle: While Democrats are hailing the act as historic ("Change is healthcare reform that we passed after a century of trying," said President Obama to loud cheers at a recent fundraiser in New York), GOP house members made their discontent known on Thursday, voting 223 to 181 to repeal the act's Medicare cost-cutting committee in a largely symbolic gesture.
The judges won't be making their decision until summer. In the meantime, here are five big questions to mull over.
1. Is the Individual Mandate Necessary?
The individual mandate requires nearly everyone to obtain health insurance by 2014, or face a fine. It’s been the main point of contention for most critics of the act—as Mitt Romney knows, the individual mandate in Romnyecare has led to a firestorm of criticism among conservatives. According to a recent ABC News poll, an overwhelming 67 percent of Americans are in favor of throwing out either the whole law or at least the mandate.
Unpopular though it may be, the federal government argues that the mandate is necessary because insurers need the extra exposure to keep coverage costs low. They warn that if the mandate falls, so will more popular provisions in the bill, like banning discrimination against pre-existing conditions and allowing children to stay on their parents' plans until 26 years of age. Jonathan Gruber, a health economist at MIT, who advised both Massachussets and the Obama administration on their respective healthcare bills, told the New York Times in 2011: “The mandate is the spinach you need to get the chocolate you want.”
2. What are Guaranteed Issue Ratings?
Guaranteed Issue Ratings require that insurers offer healthcare plans to everyone regardless of prior health history. It's the crown jewel of the ACA, offering 57 million nonelderly Americans with pre-existing conditions a chance to be insured without fear of rejection or exorbitant costs.
Many politicians against ACA are dangling the possibility of guaranteed issue ratings without individual mandates. But we can't have our cake and eat it too. Without the individual mandate, it's too easy for people to game the system: simply wait until you're sick before buying insurance. As Ian Millhiser writes for the Center of American Progress: "If people wait until they are sick to purchase insurance, they will drain all the money out of an insurance plan that they have not paid into, driving up costs for everyone else."
3. Is Community Rating Good or Bad for Young People?
One of the provisions of the ACA is the Community Rating, which requires insurers to charge their eldest beneficiaries no more than three times what they charge their youngest ones. While the intentions are good—it was designed to curtail skyrocketing insurance costs for the eldery—some are worried it might have the unintended consequence of forcing young people to bear the financial burden. As Avik Roy of Forbes writes, with older beneficiaries currently costing about six times what young people cost to insure, "the net effect of this 'community rating' provision is the redistribution of insurance costs from the old to the young."
Proponents of the bill simply point to Massachussetts as a place where community rating, in tandem with individual mandates and guaranteed ratings, has worked. As Paul Krugman notes in the New York Times: "The essence of Obamacare, as of Romneycare, is a three-legged stool of regulation and subsidies: community rating requiring insurers to make the same policies available to everyone regardless of health status; an individual mandate, requiring everyone to purchase insurance, so that healthy people don’t opt out; and subsidies to keep insurance affordable for those with lower incomes... The essential features of the ACA—above all, the mandate—are ideas Republicans used to support." [His emphasis, not mine.]
4. Is Obamacare Constitutional?
Looming above all of this is the constitutionality of the act itself. Does the government have the right to require all Americans to buy health insurance?
The controversy, as always, is politically motivated. As Krugman alluded to above, in the early 1990s, many Republicans endorsed the idea of an individual mandate as an alternative to the employer mandate that President Clinton proposed in his healthcare plan. Lately, however, conservatives have abandoned the notion on constitutional grounds, saying that a mandate would set a precedent allowing the president to issue all sorts of decrees. A favorite example is the "broccoli argument"—could the government, for instance, start forcing Americans to buy broccoli and eat it with every meal? During Elena Kagan’s confirmation hearings in June 2010, Sen. Tom Coburn (R-Okla.) grilled her about where she would stand if there were a hypothetical eat-your-fruits-and-veggies law. Said Kagan: "Sounds like a dumb law... But I think that the question of whether it’s a dumb law is different from the question of whether it’s constitutional."
On the other side of the argument is The New Republic's Jonathan Cohn, who believes not only that the individual mandate is constitutional, but that in order to justify shooting it down the court would have to take back other forms of government-mandated "social insurance" like Medicare and Social Security as well.
"The Affordable Care Act is also a form of social insurance," writes Cohn. "It, too, seeks to protect us from problems that we cannot anticipate or avoid: Illness or accident before we turn 65. To get that protection, we must contribute toward its cost—by obtaining a qualified health plan on our own or, failing that, paying a fee to the government. The government then uses that fee to finance the provision of health care services for those who couldn’t pay for it on their own. The obligation is, if anything, less onerous than the one for Medicare and Social Security."
5. What Will Happen?
The biggest question, of course, is what will happen. According to one analysis, the mostly conservative court will likely show judicial restraint and uphold the law out of deference to Congress, a reading that many conservatives reluctantly agree with. Said former U.S. Court of Appeals Judge Michael McConnell, a George W. Bush appointee who now teaches at Stanford Law School, to Reuters: "It's almost like they're confessing to some secret vice when they say they don't think [the law] should be struck down."
It's widely agreed that the court's four liberals will likely uphold the law, with Justice Clarence Thomas, arguably the court's most conservative member, expected to vote to overturn it. That leaves justices Roberts, Scalia, Anthony Kennedy and Samuel Alito—all of whom are being targeted by the Obama administration for the crucial fifth vote. As Andrew Sullivan notes, while Vegas oddsmakers haven't weighed in, a recent survey done by the American Bar Association found that 85 percent of veteran observers predicted that the court will uphold the law.