* Alternatives to individual mandate require Congress to act
* Consumer protections could provide some common ground
By David Morgan
WASHINGTON, March 20 The U.S. Supreme Court
doesn't have to strike down all of President Barack Obama's
healthcare law to leave his plan to extend healthcare coverage
to millions of uninsured Americans in a state of political
If the high court opted only to reverse the law's unpopular
individual mandate, which requires most adults to purchase
health insurance, the Obama administration could look to several
alternatives to ensure that enough people participate in
coverage to make the law work as envisioned.
The options range from a new tax on individuals who do not
acquire coverage to financial incentives that could encourage
young, healthy people to sign up for insurance. The government
could also consider special subsidies for high-risk individuals
who are already sick or vulnerable to disease.
But they would require that Obama and his Democratic allies
find bipartisan support in Congress to shore up the law, a
daunting challenge during an election year when Republicans are
already moving to repeal several of its provisions.
"All of them would require some sort of congressional
action," said Larry Levitt, a healthcare adviser to former
President Bill Clinton who is now at the nonpartisan Kaiser
Family Foundation. "Congress could end up stalemating, and you
could find yourself in a situation where there's no consensus
about how to move forward."
The Patient Protection and Affordable Care Act of 2010, the
most sweeping social legislation in a generation, is Obama's
signature policy achievement. It would extend health coverage to
more than 30 million Americans, while introducing reforms to
reduce costs and improve care.
The Supreme Court will hear oral arguments on the case
starting o n M onday and is not expected to rule until as late as
June 30. The justices could throw out the entire law or uphold
it. They may also issue only a partial ruling, striking down the
mandate, for example, or overturning the planned expansion of
the Medicaid health program for the poor. Or they could put off
a decision until after the law comes into full force in 2014.
The individual mandate, which requires most adults to
purchase private insurance in 2014 or pay a penalty, is the
linchpin for the law's goal of making affordable coverage
available to an estimated 16 million lower-income people through
new state-run health insurance exchanges.
Its critics include 26 U.S. states that hope to persuade the
court the provision is unconstitutional, on grounds that
Congress has no authority to compel individuals to purchase
products including insurance. Administration officials, who
contend that Congress has the right to regulate interstate
commerce, say they expect the entire law will be upheld.
Reform advocates say the mandate is key to making the
exchanges work, because it requires participation from younger,
healthier adults who cost less to insure. Without them, the
exchanges could become dominated by older, sicker people, whose
care would raise the cost of coverage.
That makes the job of finding an alternative vital, but one
fraught with huge challenges.
Creating a new tax on individuals who do not buy insurance
and adding new federal spending to subsidize insurance premiums
for higher risk individuals are options unlikely to pass muster
with Republicans in Congress.
Partisan politics could also obstruct options that call for
scaling back the law's consumer protections or inducing
enrollment by adopting cost incentives and penalties that are
currently barred by the legislation itself, analysts say.
One option free of congressional entanglement would be to
leave it to the states to follow the lead of Massachusetts and
adopt their own individual mandates. But that could create big
geographic disparities, given the slowness of many states to
embrace the exchanges initiative.
No serious attempt to establish an alternative to the
mandate should be expected until after the Nov. 6 presidential
and congressional elections, according to analysts.
After that point, health reform might also have a lower
legislative priority than tax reform and deficit reduction,
delaying debate on healthcare until late in 2013 and
jeopardizing the law's start date of Jan. 1, 2014.
Conservatives agree that the loss of the individual mandate
would have fundamental consequences for the entire law.
"There would be a bipartisan recognition that the Affordable
Care Act was unworkable," said Douglas Holtz-Eakin, former
director of the nonpartisan Congressional Budget Office who
served as economic policy adviser to Republican John McCain's
2008 presidential campaign.
"The thing is such an intertwined mess, the court could save
us a lot of trouble by striking the whole thing even though
that's what they're most reluctant to do," said Edmund
Haislmaier of the conservative Heritage Foundation.
If the mandate is struck down, the Justice Department has
advised the court that some of the consumer protections - such
as the ban on denying insurance for people with preexisting
conditions and rules prohibiting higher insurance costs for
women and other groups - should be removed to help mitigate the
risk to insurers. But the popularity of those protections could
provide common ground for lawmakers to find consensus on an
alternative that could lead to their preservation.
"There could be pressure for some sort of action to create
an insurance market that addresses the affordability and
availability of coverage for people with preexisting conditions
or chronic illnesses," said Dr. Mark McClellan, who oversaw
Medicare, Medicaid and the U.S. Food and Drug Administration for
former President George W. Bush.
But many are skeptical about how far partisan-minded
lawmakers would go to reach agreement to retain those benefits.
"Even if these alternatives could pass a polarized Congress,
they would be more disruptive, cover less Americans, and
increase premiums for people who have coverage due to adverse
risk selection," said former Clinton healthcare adviser Chris