By Bikna Huang
In March 2012, the United States Supreme Court heard oral arguments about the Affordable Care Act, popularly known as “Obamacare.” Most of the argument was about the individual mandate provision, which bothered the states who had brought the original individual law suits that were heard together before the Supreme Court. Once fully implemented in 2014, the individual mandate requires the 50 million uninsured Americans to obtain health insurance.
The idea behind the mandate is to bring costs down for everyone by bringing generally younger and healthier Americans who would not normally buy health insurance into the market which has the effect of spreading the costs for expensive care over a larger population and thereby reduces the average costs for everyone and thereby lowers premiums. A secondary argument is that it keeps the uninsured out of emergency rooms which is generally where the uninsured get their care. The reason this is important is that emergency room treatment is extremely expensive compared to normal medical care. Thus, the mandate was added as a method to require Americans who are generally healthy to buy insurance they would not otherwise buy. There are some studies to support the notion that the mandate is important to cost containment. For example, a study published in the journal Health Affairs noted:
“We estimate that if the mandate were lifted, premiums in the individual market would increase by 12.6 percent—somewhat less than other estimates—with 7.8 million people losing coverage, versus other estimates for coverage loss of 16–24 million people. In sum, the Affordable Care Act would still cover 23 million people who would have been uninsured without the law.”
While cost containment is the reason for the inclusion of the individual mandate, we wondered whether The Affordable Care act could survive if the Supreme Court strikes down that provision. That is, without the individual mandate, is Obamacare still Obamacare? There are a number of possibilities, however, removing the individual mandate would remove the central feature of the plan—premium cost containment. If the Supreme Court strikes down the individual mandate, Congress can either fix or abandon the bill by transforming the mandate into a tax (or tax rebate) that is clearly within Congressional power. The Court could also simply order that the references to the individual mandate be stricken, that would leave the rest of the act in place. In that case, the most popular provisions of the ACA would remain, people with pre-existing conditions would have guaranteed insurability, low income people would receive subsidies for health insurance. Of course, the individual mandate itself is a way to provide revenue for the insurance companies in exchange for insuring everyone without regard to risk (pre-existing conditions) so in the most dismal outcome, striking the individual mandate could lead insurance companies to bankruptcy.
Bikna Huang is an intern with TheFactFile.com who studies at CalPoly in San Luis Obispo, California.