Will We Get to Watch the Supremes on TV?

The Supreme Court is a fancy place. They do things with a strong sense of tradition and that most definitely applies to how they hand down their opinions and what information is made available to the public. It is relatively recently that they began releasing time-delayed audio recordings of oral arguments. Television cameras remain a no-no. I suppose the idea is that they want to be able to hear cases and deliberate without feeling scrutinized. Introducing the real-time effect of television could produce some sort of Hawthorne Effect. If the Justices know that America’s watching, perhaps they’re worried that they’ll rule differently than they otherwise would.

I have mixed feelings about this. On the one hand, I believe in preserving traditional institutions, and I don’t think that anything and everything needs to be televised. On the other hand, the outcome of this case has the potential to affect many Americans who are unlikely to ever read a majority opinion from the Court, but would certainly catch snippets on the tube.

Perhaps that’s why so many groups are asking the Court to allow television cameras in the courtroom for the first time. There’s the Association of Health Care Journalists, C-SPAN, the Radio Television Digital News Association, the New York Times, and most interestingly, Iowa Republican Sen. Chuck Grassley. My hunch is that their requests will be denied, but I hope I’m wrong, because I’d watch this case around the clock like it was the Casey Anthony trial.

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Supremes to Hear Case on Affordable Care Act

The legal challenges to the Affordable Care Act commenced just as soon as the bill became law in 2010. There have already been a number of lower courts that have ruled on the constitutionality of the law’s individual mandate, and I have written fairly extensively about these cases here, here, here, here, here, here, here, and here. Those links are in chronological order, and I’d suggest reading them if you need to get up to speed quickly on the issue.

More recently, the Court of Appeals for the D.C. Circuit ruled in favor of the individual mandate, and the decision is notable in that a conservative judge and Reagan appointee broke with the precedent of conservative judges ruling against the law. In fact, he was the second judge to do so. Jonathan Cohn has more of the details over at The New Republic as does Timothy Jost at the Health Affairs blog.

This decision was the prelude to the Supreme Court’s decision to hear the Affordable Care Act case early next year. In fact, they’re not only going to hear it, they’ve set aside a record amount of time for oral arguments–5 1/2 hours to be exact. The New York Times’ Adam Liptak has more.

Meanwhile, voters in Ohio passed a meaningless referendum rejecting the individual mandate. Why is it meaningless? Because if the Supreme Court finds the individual mandate unconstitutional, the Ohio amendment won’t be necessary, and if the Court upholds the mandate, federal law trumps state law, rendering the amendment useless. Which will it be? We’ll have our answer just in time for the election in 2012.

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Mandate Realists

Last week, I wrote about what might happen if the Supreme Court struck down the individual mandate portion of the Affordable Care Act, leaving the rest of the law intact. It seems that others have been chiming in to, and if I interpreted the Lewin Group’s study in Health Affairs through a “glass half-full” lens, others aren’t convinced and certainly aren’t optimistic.

One of the cynics (realists?) is Mark Hall, who I know and admire. He has a well-written article critiquing the Health Affairs piece, where else but the Health Affairs blog. In his post, he does an excellent job of explaining why Lewin’s research is an outlier and why we should put more stock in the doomsday predictions of Jonathan Gruber and friends. He also puts forward a sort of Pascal’s Wager in support of the mandate: We don’t know how bad things will be without a mandate, but we do know that things won’t be bad with the mandate, so better to make the safe bet. I actually agree with all of this, with one exception: It ignores the case of the status quo, which I think is worse than all the other elements of health reform minus the individual mandate, which is itself worse than all of the elements of health reform including the individual mandate.

I’m all for the individual mandate, I’m just not ready to throw in the towel if that single piece of the law takes a hit. For more on how there’s “no ‘silver lining’ in repealing [the] insurance mandate” check out this excellent piece from Naomi Freundlich at Health Beat.

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What If The Supreme Court Strikes Down the Individual Mandate?

Any ruling by the Supreme Court on the constitutionality of the Affordable Care Act’s controversial individual mandate isn’t likely for at least another several months, but it’s worth thinking about what might happen after the case is decided. The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear: If the Court finds the mandate unconstitutional, do they find it severable from the rest of the law? If not, they’ll strike the whole ACA down. This seems like the least likely outcome. If, on the other hand, they do invoke severability, the ball is back in the White House’s court. The decision at that point would be whether or not health reform can be successful without the individual mandate.

The concern here is the death spiral first described by Nobel Prize-winning economist Joseph Stiglitz. In essence, if we don’t require everyone to buy insurance, then insurance will be disproportionately purchased by the sick, making it more expensive and leading many to discontinue coverage in a continuous cycle that drives the price higher and higher until no one can afford insurance any more and the system collapses. By contrast, getting everyone into the pool is seen as the only way to keep costs down and maintain the insurance system. So the question is: What happens if the Supreme Court strikes down the individual mandate? Does the Obama adminsitration wash its hands of health reform, proclaiming that it can’t be done without the individual mandate because costs will rise too rapidly and the insurance system will collapse, or does it forge onward and see what happens?

Option one is the safe bet if you believe that a bad status quo is better than a potentially worse change, but it’s absolutely terrible politics. It would be admitting defeat on one of the defining aspects of the Obama presidency. Moreover, it would have tremendous negative implications for the future of health reform initiatives generally. Option two looks good politically for all of the opposite reasons, but it could destroy the health insurance market and hurt Americans in the process. That’s bad leadership. While such action might lead to the type of catastrophic collapse necessary to precipitate true change, it would be incredibly painful.

New evidence suggests, however, that the pain might not be as great as many–myself included–fear. John Sheils and Randall Haught of the Lewin Group ran a simulation model to see what might happen to coverage and costs if reform went forward as planned with the exception of the individual mandate. Remember, the concern is that fewer people would be covered and health insurance premiums would increase. What they found is that, yes, compared to estimates under health reform with an individual mandate, health reform without the individual mandate would mean fewer people would be covered and insurance premiums would increase, but things would still be better than if we did nothing at all.

How much better? Well, without reform, they estimate that 51.6 million Americans would be uninsured. With reform, that number drops to 20.7 million. With reform, but without the mandate, their estimate stands at 28.5 million. Not too shabby. As for premiums, the authors estimate that eliminating the individual mandate will mean a 12.6% increase. Not a welcome increase, but not necessarily the kiss of the death spiral.
That said, other estimates by the Congressional Budget Office and MIT health economist Jonathan Gruber have not been as optimistic. The CBO expects that axing the individual mandate will mean 16 million fewer insured persons and a premium increase between 15 and 20%. Gruber puts the figures at 24 million fewer insured and premium increases on the order of 27%. Because of the sheer volume of people involved and the uncertainty of their decision making processes, it’s really hard to know who’s calculations are the most reasonable.

What you can count on is this: If the Court finds the individual mandate unconstitutional, the White House will have more actuaries and health economists crunching numbers than you can imagine. These latest results from Lewin suggest that even if the Court says no to the individual mandate, it shouldn’t necessarily mean the Obama adminsitration should give up on health reform.

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The Necessity of the Individual Mandate

People are quite accepting of the idea that choices have consequences and that choices are often unavoidable and irreversible. That’s why so many people like to bandy about the saying “You can’t have your cake and eat it, too!” Yet, with health insurance, that’s exactly what people seem to be longing for. They don’t want the government telling them what to do (e.g., requiring everyone to buy health insurance), but they also want health insurance when they need it, lest they be unable to afford a trip to the doctor or hospital. Americans are being confronted with an inescapable “either/or” proposition, all the while clamoring for a “both/and” solution that simply doesn’t exist. Let me put it into the starkest of terms. Forget politics and the courts for a minute and just join me in a simple thought experiment.

Congress passes, and the President signs, a law that forbids health insurers from denying people coverage on the basis of pre-existing conditions. As a result, people with pre-existing conditions are happy, because they can now purchase health insurance, which they couldn’t previously do in many cases without taking out a home equity loan. At the same time, people without pre-existing conditions are happy, because they no longer have to purchase health insurance while they are healthy. Why waste the money? Instead, they can simply wait until they get sick and buy insurance then, when they need it. After all, the insurance company is powerless to prevent such behavior, thanks to the new law.

Pretend for a moment, that you are the CEO of a major health insurance company. Suddenly you find yourself insuring only sick people. All the healthy ones don’t need your product, and there is no incentive for them to purchase it until they fall ill. Ordinarily, you combated this problem by denying coverage to sick people–or by charging them much higher premiums. Congress won’t let you deny coverage any more. What do you do? Your options are simple: Keep premiums low and pay out enormous claims, or raise premiums dramatically in hopes of generating a net profit after paying out enormous claims. It’s not rocket science. Under this scenario, health insurance costs would skyrocket, quickly becoming unaffordable for all but the wealthiest Americans.

If only there was some way to ensure that people didn’t wait until they got sick to purchase insurance. Enter the individual mandate. By requiring everyone to purchase insurance coverage, the insurance companies no longer face a scenario where all their beneficiaries are sick and costly. In fact, the number of healthy insured persons will go up, and that should actually steer things in the opposite direction, helping to spread risk and bring premium costs down on average.

In the end, we are left with three options:

1. Return to the status quo. Under this approach, most of the sick who truly need it will be unable to afford health insurance. Our system will remain fragmented and costs will continue to rise. 
2. Ban pre-existing condition exclusions without an individual mandate. Under this approach, people won’t buy health insurance until they get sick. As a result, health insurance costs will rise even faster than they have in the past, the number of uninsured persons would grow dramatically, and the health insurance system as we know it would face significant contraction if not collapse.
3. Ban pre-existing condition exclusions with an individual mandate. Under this approach, everyone would be covered and health insurance costs would not increase at such alarming rates. In fact, they might even decrease.

Maybe it’s just me, but door number 3 seems like a pretty clear winner. It’s only when politics and the legal system get involved that such economic commonsense gets confused. As most of the courts thus far have ruled that the individual mandate is severable (meaning the mandate can be ruled unconstitutional while the rest of the law remains intact), door number 1 seems firmly closed. Fundamentally at issue is whether the decision not to buy health insurance is an economic decision affecting interstate commerce. Based on the different outcomes that can be expected depending on the presence or absence of a mandate, I don’t see how a judge worth their salt could determine that the decision not to purchase health insurance isn’t an economic decision. This much is certain: there will be a decision and it will have far-reaching consequences. To wish otherwise is to hope in vain. We must eat our cake, or save it for later. We simply cannot do both.

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The Individual Mandate and Its Alternatives

Dr. Jonathan Oberlander is a nationally-known expert on the U.S. health care system and the politics of health reform. He also happens to be my academic adviser and the chair of my dissertation committee. Recently, he published an article in the New England Journal of Medicine that updates the current status of (read challenges to) health reform implementation–in particular the individual mandate. It’s quite good, and deserves your reading.

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The Commerce Clause and Legal Challenges to Health Reform

My friend, Mark Hall, the Fred D. & Elizabeth L. Turnage Professor of Law at Wake Forest University School of Law, has written a very thorough critique of the commerce clause as it relates to legal challenges to health reform. The great thing about what he has written is that it considers both sides of the issue in great detail. You don’t find that kind of balance very often. Click here to read it.

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The First Verdict

I just wrote a piece about the challenges being mounted against the implementation of health reform by its opponents. One of those was that the issue could be decided in the courts. Well, last Thursday, the first judicial ruling came out. The case of Thomas More Law Center v. Barack Obama was decided by U.S. District Judge George Steeh, and he found that health reform–or more specifically, the individual mandate–was constitutional. (You can read his decision here.) As I explained before, if the individual mandate gets struck down by the courts, it effectively eviscerates health reform. Since courts tend to rely on precedent, this first “victory” is important, but it isn’t the final say by a long shot. A number of other District courts will rule, and this issue will most likely weave its way to the Supreme Court.

There are 9 justices there, and it will take 5 of them to decide that the individual mandate is unconstitutional. Judge Steeh’s ruling may or may not reflect how the Supreme Court will rule. The thing is, judges aren’t outside of politics. Sure, the members of the Supreme Court and District Courts are appointed for life, rather than elected. On the one hand, this means that they need not judge in such a way as to please the people. After all, justice is a stand-alone quality, right? Moral principles, for example, do not change based on popular opinion. The catch is to be found in that word “appointed.” The President has the job of appointing the District judges and nominating the Supreme Court justices (who are subject to Senate confirmation). It should be obvious that Presidents nominate and appoint judges who share their own political views (to the extent that such can be gleaned from past decisions and the like).

The judge who ruled in favor of health reform in Michigan was appointed by President Clinton. He sided in favor of the Democrats’ reform law. The Supreme Court looks different. Two were appointed by Ronald Reagan, one by George H.W. Bush, two by Bill Clinton, two by George W. Bush, and two by Barack Obama. If you’re doing the math, that’s five justices appointed by conservative presidents and four appointed by liberal presidents. That means essentially that one justice–just one non-elected official–could determine the fate of health reform in this country. Most would say that that person is Justice Anthony Kennedy, who is traditionally considered the swing-vote in 5-4 decisions. Does the result in Michigan really mean anything? Let’s hope Justice Kennedy thinks so.

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Let’s Place Bets On Repeal

I have it on good authority that there are basically three outcomes that the health reform law may experience in the future (other than becoming a resounding–or mediocre–success). They are:

1. The Republicans get elected to a veto-proof majority and repeal the law in its entirety.
2. The Republicans get elected to a simple majority and are able to attack the law by reducing funding for a number of its provisions.
3. The lawsuits being brought against the law are successful and the individual mandate is found to be unconstitutional. Consequently, the entire thing unravels.

As to Option 1, I don’t see it happening. Is the GOP going to pick up seats in November? It would be historic if they did not. Will they pick up enough seats to override Obama’s veto and repeal health reform? I doubt it. Even if they did pick up the necessary seats, they might suddenly find out how hard it is to hold the votes together, especially considering that repeal isn’t going to be any easier politically than passage was. The obstacles here are huge. I’ll do a little forecasting, and say there’s about a 1% chance that this happens.

Option 2 is much more likely, because all that would be needed is a simple majority in both chambers. I put the likelihood of this one at about 30%, and that number would get greatly revised upward or downward after the election. After all, if the GOP can throw a wrench in the works without repealing reform, the end result will be pretty much the same, but with one major difference: Option 2 lets them say “Hey, Look! The Democrats’ health reform didn’t work!” They don’t have that luxury if they repeal the thing.

Lastly, Option 3. The courts are unpredictable. After all, this is the kind of case that would make its way up to the Supreme Court, and then you’re only talking about winning five votes in a best-of-nine series. (Sorry, the baseball postseason just started.) I’d give this one about a 20% chance of happening.

If you’re tracking with me and doing the math, that means I put the likelihood of health reform facing a serious challenge to implementation at 51%. Again, that’s without knowing how the elections will turn out. Still, the threat is quite real. Equally as real is the threat posed by the GOP’s proposed alternative to health reform as outlined in the Pledge for America. (As another aside, I can’t wait until another 16 years go by and we get the Promise to America to make the hat-trick with the Contract with America. But Washington never recycles ideas.) Others have had some good takes on the problems with what is being proposed. You can read them here, here, and here.

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