Posts Tagged ‘individual mandate’

ACA Opponents Grab a (Partial) 11th Circuit Win

Tuesday, August 16th, 2011

In a 2-1 decision this past Friday, the 11th Circuit U.S. Court of Appeals in Atlanta handed ACA opponents a partial victory and dealt a partial blow to the Obama Administration and ACA supporters. While the ruling is frustrating to those working tirelessly on ACA implementation, the good news is that the entire law wasn’t ruled unconstitutional. The individual mandate provision – or the requirement that everyone who can afford insurance must obtain it – was struck down, raising doubts about the long-term sustainability of the ACA. However, let us grab the bits of good news that are sprinkled (lightly) throughout this ruling.

Medicaid is no bully.

 Medicaid expansion is at the heart of expanding coverage to millions of uninsured Americans in the coming decade. The appeals panel confirmed that the Medicaid program is a legitimate federal mechanism to expand coverage to the uninsured. It is not a coercive tool, as charged by the plaintiffs; rather, Medicaid is a longstanding federal-state partnership to address the uninsured in states. The panel writes “If states bear little of the cost of expansion, the idea that states are being coerced into spending money in an ever-growing program seems to us to be ‘more rhetoric than fact.’”

The individual mandate is one provision of many…

It is worth noting that the panel declined to uphold Judge Vinson’s lower court ruling that the entire law be thrown out. Therefore, it raises the possibility that the individual mandate could be severed from the ACA, leaving the law intact. This does raise concerns for ACA supporters and insurers alike because the mandate is a way to include everyone – healthy and sick – and is used as a tool for calibrating risk.

Politics aside…or front and center?

Pam Bondi, the Florida AG leading the 26 state lawsuit against the ACA, commented that due to the bipartisan nature of the 11th Circuit ruling, “politics are out of this now.” (Judge Hull of the majority opinion is a Clinton appointee; however, she is also cited as a compromise candidate during a fierce partisan nomination battle for judges during the mid-nineties). Did Bondi really say that? If that were the case, the 6th Circuit ruling where Republican appointed Judge Sutton upheld the individual mandate would have marked the beginning of the end of ‘politics.’ Saying ‘this is the end of politics’ surrounding these ACA legal challenges is merely politics. Yes, it is confusing. What is clear, however, is that the individual mandate provision of the ACA is bound for the Supreme Court. All pundits agree that the Justices cannot avoid taking an ACA case– as to when the Justices take the case may depend on, well, politics.

Therefore, perhaps you feel a tinge of pity for the Supreme Court as everyone waits to see what ruling they will choose to hear. Will it be the 4th Circuit where we are still awaiting an appeals decision? Will it be the 6th Circuit that has already petitioned the Supremes? Or will it be the 11th Circuit where we are awaiting the Administration’s decision as to whether or not to appeal (they have 90 days)? You can hear the chorus now – “Pick me! Pick me!” Most believe the Obama Administration will win this leg of the race (rare to turn down an Administration petition). Who will reach the finish line first? Well, that is the topic of another blog.

- Eva Stahl, Policy Analyst

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And we all March forward…

Tuesday, March 15th, 2011

The Department of Justice, upon the request of Judge Roger Vinson, filed a request for an expedited appeal to the Eleventh circuit last Tuesday. This, in exchange for a clear issuing of a ‘stay’ from the Judge that requires states to continue implementation of the Affordable Care Act (ACA) while the appeals court determines the case. This is important to all parties involved – first, because the Administration wants implementation to proceed and second, because opponents want the individual mandate challenge to reach the Supreme Court of the United States (SCOTUS).

Currently, there is a flurry of legal activity. In the Fourth U.S. Circuit Court of Appeals, a hearing is scheduled for mid-May that combines two cases (one lower court ruling in support of the ACA – Liberty University) and one against (Virginia). In the Sixth U.S. Circuit Court of Appeals, a Michigan ruling in support of the ACA is being challenged by the Thomas More Law Center on grounds that the ACA’s use of an individual mandate (requiring citizens to purchase health insurance) is unconstitutional. The Sixth U.S. Circuit Court of Appeals case is scheduled for the beginning of June. But the big story last week was that the Eleventh U.S. Circuit of Appeals would enter the march to SCOTUS by scheduling hearings beginning early summer.

So what?
First, the Fourth and Sixth Circuit rulings appear less likely, according to legal analysts, to make it to SCOTUS. The larger case brought by multiple states and Attorneys General and led by Florida is the focus of the ACA court challenges – first, because the ruling by Judge Vinson effectively dismantled the entire law and second, the plaintiff list is lengthy and includes over 20 states. The prime focus of the case is the individual mandate.

There is some good news.
The directive to states: No more whining – implement. The resulting stay from Vinson, even with strings attached, clearly tells states that they must implement the ACA while the case moves through the court system. This is great news for advocates and Americans. Need an Exchange? Build it. Have a pre-existing condition? We’ve got you covered. Under 26 with no health insurance? Give Mom and Dad a call.

And we all march forward…
If these cases move rapidly enough to land on the 2012 SCOTUS docket, then it will be a challenge for ACA supporters. This is because the issue of health reform will once again be the center of attention during election season in lieu of a much more pressing issue – joblessness. While this is a frustrating outlook, the path to success does not change. All roads lead to public education – the ACA is the opportunity to give American’s a fair chance to have a healthier life. Spread the word.

– Eva Marie Stahl, Policy Analyst

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Choose Your Own Adventure: Possible Paths for ACA Legal Challenges

Tuesday, January 4th, 2011

Please note this post was updated 1/5/2011

In the midst of all of the legal challenges to the Affordable Care Act (ACA), there may be a lack of clarity for the average person regarding how these lawsuits proceed. We thought that we would take a brief moment to offer our readers a quick legal 101 on judicial process. Open our flowchart and follow along.

Where are we?
The day President Obama signed the ACA into law, Attorney General Bill McCollum of Florida held his own press conference in an attempt to steal thunder and oppose what he termed an infringement upon “state sovereignty.” The domino effect was almost instantaneous as numerous conservative-leaning states and their AGs jumped aboard the McCollum bandwagon with cries of constitutional betrayal. In other states where AGs refused to sign on (Democrats), governors sought state legislative approval to one-up the AG and join anyway. This was successful in a handful of states. While other lawsuits emerged (Virginia, Michigan, New Jersey, California, etc.), the group led by McCollum currently holds the spotlight – mostly due to its expansive plaintiff list. The AG in Virginia, Kenneth Cuccinelli, has also successfully brought suit against the ACA but his lone ranger approach, according to legal scholars, leaves his case an unlikely candidate for the Supreme Court of the United States (SCOTUS). Currently, we have a handful of rulings both for the plaintiff (Virginia and most likely Florida) and the defendants (Lynchberg and Michigan). The cases in the most advanced stage of the judicial process are 1) Michigan – now in appeal (6th circuit) and 2) the Cuccinelli case – now entering the appeals phase (4th circuit). The Florida case is now awaiting judgment by U.S. District Judge Roger Vinson.

Where are we going?
Structure
The country is divided into 94 federal judicial districts. Districts do not cross state lines. Districts fall into 12 circuits across the country – in other words, each circuit is made up of a handful of states, containing districts. Where you file (the district) determines what circuit court you travel through if there is an appeal. While trials begin at the U.S. District court level, appeals to these decisions are heard at the circuit level. For example, there are two cases regarding the ACA in the state of Virginia. One district ruling favored the federal government (Lynchberg) and one district ruling favored the state of Virginia (Cuccenelli). Both losing parties will petition the 4th Circuit of Appeals to hear their cases, challenging the lower court decision. The final court of appeals is the U.S. Supreme Court.

Currently the appeals process is the focus of the challenges to ACA, however, it is worth a quick recap of how the cases got to this point.

Process
Phase I – U.S. District Court:
The opponents to ACA (plaintiffs) begin their legal challenge by presenting a brief to their U.S. District judge outlining their argument. In the case of the ACA, this is focused on the individual mandate (the requirement that all citizens have health insurance). There are additional arguments challenging the constitutionality of the ACA, but the mandate is the main issue. Once the judge hears from the involved parties (plaintiff and the defendant), he or she determines whether or not there is an issue that needs resolution. This is labeled the “pre-trial phase.”

Once this is determined, briefs for trial are submitted – these often include amicus briefs. The amicus brief, or a “friend of the court” document has received a great deal of attention because it is the only public avenue for comment. An outside party may seek permission from the judge to submit an amicus brief to include additional information on behalf of the plaintiff or the defendant. In the current cases, there are numerous amicus briefs filed on behalf of the opponents to ACA (plaintiffs) and the Federal government (defendant). Following the filing of this information and enough time for the judge to review it, a trial begins. The trial phase gives plaintiffs and defendants an opportunity to argue their case before the judge. Once this concludes, the judge will deliberate and issue a judgment. This process may take anywhere from four months to a year.

Phase II – U.S. Court of Appeals:
One party will not like this judgment and will appeal – in other words, the losing party will ask another group of judges to review the U.S. District Court decision. In the appeals phase, a panel of judges (usually three) is appointed to hear a case within a circuit. The process mirrors the district process in that the plaintiff, the defendant, and friends of the court submit briefs before each party argues their case. The deliberation process differs in that three judges determine the outcome by majority vote. Once a ruling is handed down from the appeals panel – again, a party will not like the outcome — the losing party will most likely petition the Supreme Court to have their case heard (this is called “writ certiorari”). This process of brief submission, trial, deliberation and judgment can take up a year.

Phase III – U.S. Supreme Court (SCOTUS):
The Supreme Court does not have to hear the case – it receives over 8,000 petitions to be heard annually and chooses to hear only a small percentage of these cases. However, given the fanfare around ACA, it is likely that the case will be heard and that there will be divided opinions from different circuits that demand clarification on the constitutional issues raised by ACA. When and if a case is heard by SCOTUS, it will fall into their annual calendar, beginning in October. Rulings are not issued, often, until the end of the term – which is in June. Therefore, if SCOTUS picks up a case (probably Florida) in 2012 or 2013, it may not be reconciled until June of 2013 or 2014. So, sit back and bide your time, this will take awhile.

Is this political?
Of course it is! The strategy for Republicans is twofold: pick up court rulings in their favor in historically conservative circuits (ensuring success), therefore, branding ACA as dead in its tracks before full implementation and second, heading into SCOTUS with a constituent uproar over individual liberty supported by a handful or rulings and public discontent surrounding the individual mandate.

For supporters of the ACA, the best strategy is to gain public favor for the law. By engaging consumers and educating them about the positive effects and benefits of the ACA, advocates are increasing overall public support. If the law is embraced, it is less likely (and historically proven) that SCOTUS will tinker with a widely accepted law that benefits all of American society.

– Eva Marie Stahl, Policy Analyst

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Insider: Post-Election Analysis Part Two

Friday, November 19th, 2010

Last week’s Insider addressed the role of the Affordable Care Act (ACA) in the November election. This installment tackles what the election means for ACA implementation going forward.

Preview of Coming Attractions (coming to a Congressional multiplex near you)
The incoming House Republicans have made it clear that they will try to block implementation. We can expect:

– Repeated overall repeal attempts
– Efforts to impede federal regulators via oversight hearings, legislation to block regulations and restricting funding (though probably stopping short of a game of chicken over passing a budget)
– Repeal efforts aimed at selected provisions. These last efforts will be designed to try to force moderate Democratic Senators up for reelection in 2012 either to vote against the ACA or to take votes that can be used for attacks in the 2012 election. (Remember the attack ads claiming various Democrats supported Viagra for sex offenders?)

Repeal — a real threat or a political stunt?
The first question confronting advocates is how to respond to repeal efforts — especially those focused on the individual responsibility requirement. Although they have no chance of passage in the short run, ignoring them would likely prove politically damaging. The goal of putting these forward is twofold: to try to keep the national conversation about the ACA focused on its least popular elements and to make Democratic Senators take tough votes. Even a vote in the Senate that attracts some Democrats, and especially enough to constitute a majority while falling short of 60 votes, will hurt the public perception of the ACA. The ultimate goal of opponents is to get some repeal or rollback measures on President Obama’s desk. By forcing a veto, Republicans hope to paint a picture of an obstinate Obama standing against the popular will. Advocates of reform can’t roll over in the short run if they want to win in the long run — even with House votes that cannot be won.

What about in the longer run? Many analysts do not believe that the individual responsibility requirement is in serious jeopardy because, they argue, repeal is not really in the interest of health care interest groups, particularly insurers.

Of course, it is impossible to be certain, but given their vociferous objections to the requirement, it is hard to see Republicans turning around and saying “just kidding” if they run the table in 2012. Although there may be some cynics in the party who see attacks on the individual responsibility requirement purely in terms of political opportunism, there are certainly many true believers in repeal. In addition, the requirement to purchase coverage becomes unworkable if much of the funding for the subsidies is wiped out (e.g. by restoring funding for Medicare Advantage overpayments or eliminating insurance and other taxes). Trying to implement the mandate without adequate subsidies would likely prove costly at the ballot box.

Also, looking to the first Massachusetts attempt at universal health care in the late 1980s, when business and health care industry groups abandoned their support for reform after the election of a Republican governor, you can’t assume the interest groups that supported the passage of the ACA will stay on course for coverage expansion in a different political environment if they think their bread is buttered elsewhere. You can be sure that the insurers and other interest groups have alternative plans and business models in place to deal with that eventuality.

Past performance is not a guarantee of future returns
So, is the 2010 election a harbinger of doom for health reform? Not necessarily. First off, as we noted last time, the extent to which health reform drove the outcome is being vastly overstated by the incoming House majority. Approximately half of the country wants to see the ACA either implemented as is, or expanded. Constituencies that tend to support the ACA were underrepresented in the 2010 election relative to their participation in 2008 but may return to the voting booth in 2012.

Also, most of the provisions of the law continue to command majority support, making repeal a dubious political proposition. Defenders of the law will have an easier time mobilizing supporters going forward because it is an organizing truism that it is easier to organize against something being taken away than it is to organize for getting the benefit in the first place.

Furthermore, despite their complaining (and piling on to lawsuits) we are likely to see states with conservative administrations moving forward with implementation. Even state administrations that oppose the ACA may be reluctant to gamble on repeal. Failure to move forward on implementation would mean turning crucial state functions like Exchange operation (and access to state Medicaid coverage) over to the federal government. This will create momentum for implementation.

Finally, some of the big whopper lies that opponents have told will be shown to be untrue in the coming year (e.g. that the ACA requires you to pay taxes on the value of your employer-sponsored health benefits). As time goes on, implementation gains steam and more people are helped by the interim provisions, repeal will become less plausible and the claims of opponents will become less credible.

Nonetheless, the ultimate fate of the ACA rests on the results of the 2012 election and on the eventual decision of the Supreme Court. If 2012 results in a Republican sweep, it is highly uncertain whether Democrats in the Senate will have the will to filibuster repeal efforts. Meanwhile, the Supreme Court remains the wild card in the implementation debate. If court prognosticating is your passion, check out the discussion here: http://aca-litigation.wikispaces.com/

Coming up next time: Spotlight on Medicare and Medicaid

– Michael Miller, Policy Director

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Florida ruling swings pendulum toward Supreme Court

Friday, October 15th, 2010

Yesterday, the federal judge in Florida, Roger Vinson, allowed the lawsuit against the new health law to go forward. In his ruling, the Judge maintained that there were constitutional issues in play and formal hearings would begin mid-December. Specifically, the Judge discounted the Justice Department’s claim that 1) the individual mandate was a natural extension of the commerce clause – or the federal government’s ability to regulate interstate commerce; and 2) the penalty imposed by the individual mandate was equivalent to a tax.

However, Judge Vinson dismissed several claims made by the plaintiffs – 20 attorneys general, led by the Florida AG, Bill McCollum – including arguments related to state sovereignty. Nevertheless, he sided with the AGs that the use of the commerce clause was unprecedented and deserved a weighing of whether or not that exercise in federal power is constitutional. Vinson also went to great pains to dismiss the Justice Department’s argument that the penalty associated with the individual mandate was simply a tax. Interestingly, he honed in on the political discussions that occurred during the passage of the legislation when many promoting reform argued that the penalty was not a tax. Shouldn’t the semantics of taxation during political theater be irrelevant in the courtroom? I guess not.

As reported by the Volkh Conspiracy here, there is little discussion by Vinson regarding the Necessary and Proper clause – which is the strongest argument for the new health law. Millions of uninsured doesn’t translate into “necessary?” In U.S. District Court in Michigan, however, Judge Steeh maintained that the insurance mandate is constitutional and the overwhelming national crisis supersedes the concerns expressed by health reform foes: “The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers… These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers and the insured population who ultimately pay for the care provided to those who go without insurance.”

The Florida ruling is important because, alongside the Virginia ruling expected on Monday, it narrows the path for defendants and plaintiffs alike in how they argue the case. Clearly, the commerce clause will be the central constitutional question going forward. Should not purchasing health insurance be viewed as an active choice that may be regulated? We will hear many competing theories in the coming months – which theoretical frame will the Supreme Court choose? How will the pendulum swing? Stay tuned.

– Eva Marie Stahl, Policy Consultant

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MI judge’s ruling swings the pendulum in favor of the individual mandate

Friday, October 8th, 2010

A judge that upholds the legality of the individual mandate does exist! Yesterday, U.S. District Judge George Steeh dismissed the Thomas More Law Center’s central arguments against the Affordable Care Act’s individual mandate and denied a requested injunction that would have stalled health reform implementation. In an effort to dismantle health reform, anti-reform groups are pursuing a legal avenue that would invalidate a central pillar of health reform — the requirement that all Americans purchase health insurance. Despite the federal judge’s ruling in Michigan, however, the individual mandate remains under scrutiny in Florida and Virginia.

Steeh, a Clinton appointee, maintains that Congress did not overstep its authority in requiring individuals to purchase health insurance and doing so is within their power; he cites numerous Supreme Court rulings to support his assertions. Steeh writes: “Because the ‘penalty’ is incidental to these purposes, plaintiffs’ challenge to the constitutionality of the penalty as an improperly apportioned direct tax is without merit.” When translated, this means that Congress may use the individual mandate and associated penalties to achieve the greater goal of insuring all Americans. This is great news for supporters of ACA, mostly because it’s a win for moving health reform implementation forward.

The More Center lawsuit is similarly aligned with the suit brought by the 20 attorneys general nationwide, currently being heard in a Florida U.S. district court. The AG suit is assumed to move forward; Judge Roger Vinson of the Florida US district court hinted in an earlier ruling that some major points would progress to trial in December.

The Michigan ruling illustrates the pendulum on which the individual mandate resides. For the citizenry there is little to do but watch it swing. It is likely that the Supreme Court will be the only hand that can stop it.

– Eva Marie Stahl, Policy Consultant

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Florida’s McCollum gets his day in court

Wednesday, September 15th, 2010

Despite taking a beating in the Florida Republican primary for Governor, Attorney General Bob McCollum(R) continues to pursue a legal strategy against the federal government. Hopeful that the nationwide legal strategy against health reform would win him the gubernatorial race, McCollum is now left with simply a legal strategy. But alas, he’s not giving up! Yesterday, Judge Roger Vinson held a hearing on the AG lawsuit in federal court in Pensacola. Vinson, a Ronald Reagan appointee, signaled to his audience that he intended to allow pieces of the legal argument to progress to the next phase. The judge stated that his decision regarding dismissal would be issued no later than October 14th and oral arguments would begin on December 16th.

For those closely watching this lawsuit, this is not a surprising outcome. If you take stock of the situation, it shapes up as more of a political tantrum than a legal travesty. The plaintiffs are 16 Attorneys General (all Republican save Louisiana) and 4 Republican Governors. They appear to be part of a larger Republican strategy to attack health reform at all fronts and at all costs — this is evident in the Johanns (R-NE) amendment that failed this week, an attempt to gut funding for the prevention fund, a cornerstone of health reform. Tactically, McCollum chose well — beginning the hearings in Pensacola and progressing to a conservative bench in Atlanta — both clearly afford the anti-reform AG posse an advantage. Despite the drama of the court proceedings, the legal confrontation should not be brushed off as fodder. Most likely, according to wonks and legal scholars, the lawsuit will land squarely in the laps of the Supreme Court justices. From there, the outcome is not entirely certain.

It is important to remember, however, that the central arguments espoused by McCollum et al. are weak and disingenuous. They boil down to two main issues: is insurance synonymous with commerce AND is a Medicaid expansion the same as coercion? If you want a legal summary, read here.

First, those wishing to dismantle health reform want voters to believe that they are forced to participate in the business of health care by the federal government — demanding they engage in commerce, stripping citizens of their individual liberty. Second, the AGs want voters to believe that the states themselves are victims of too much federal power, coercing states to participate in the public insurance program, Medicaid. Hoping to ride on the tails of a disenchanted electorate, the AGs are touting their steps to the Supreme Court as ‘wins’ against big government.

The arguments against health care reform, however, lack logic. First — for a party that is constantly demanding ‘pay fors’ — they should be in lock step with policy that provides a payment mechanism for health care that all people use and need, regardless of insurance status. The government is not forcing engagement in commerce; it is simply finding a payment mechanism for commerce that already exists. Second, the very idea that the federal government is coercing states to participate in Medicaid is preposterous. States may choose not to participate in the program; in fact, the leading Republican think tank, the Heritage Foundation, encourages states to do so — reminding them, yes, a state may choose to opt out of the program.

This anti-reform posse must be challenged both in court and on ‘main street.’ Advocates are powerful tools in defusing the legal strategy of the far right through educating the public about why health reform is a necessary good. As the Democratic candidate, State Sen. Dan Gelber, running to replace McCollum states, “There are four million people without health care in our state… everybody agrees this was not the most perfect bill that’s ever passed. But I am not going to take the resources of this office that are so desperately needed to solve some of the pressing security issues of our state and dedicate them to what I think ultimately really was a politically motivated lawsuit that was spawned out of a primary battle and that, ultimately, I don’t think has a whole lot of merit when it gets to the Supreme Court, which I think it will…But I do think if you don’t like the bill, Miss Bondi [Pam Bondi (R-FL) AG candidate] should run for the Congress, where she can, as a legislator, fix it in the next legislative session.”

Florida has over 4 million uninsured people – how many does your state have?

– Eva Marie Stahl, Policy Consultant

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The Insider: The Cost of Compromise

Tuesday, August 10th, 2010

FMAP: Victory at a Price

SNAP Offset Graphic FinalThe Senate voted on Thursday to provide additional federal assistance to state Medicaid programs (and additional support for teachers to avoid layoffs) and the House followed suit today, but the price was high. After several attempts to pass an FMAP extension on an emergency basis (meaning no tax increase or spending cut to offset the new spending) were blocked by a united Republican Senate caucus, the leadership decided to pay for the financial assistance to states by rolling back a temporary increase in food stamps (SNAP). The SNAP increase, part of the American Reinvestment and Recovery Acct (ARRA), was originally projected to phase out in 2014, however, the slow growth in food prices would have extended the increase until 2018. The FMAP legislation means that the increase will indeed end in 2014, creating a cliff that at that time will cause a drop in SNAP benefits.

Senate leaders (supported by the administration) faced with the specter of failure on the fiscal relief legislation and the resulting layoffs of teachers and other state workers plus the scaling back of Medicaid benefits, decided that avoiding the harm now was the lesser of two evils. With luck there will be a chance to restore the SNAP benefit before the cut actually goes into effect in 2014.

The really sorry thing is what the FMAP/ SNAP trade says about the balance of power in the US Senate today. As much as we decry the use of SNAP as one of the funding sources, it is a sad fact that a more progressive source would have been unable to clear the Senate. Unfortunately, things are only likely to get worse in the short run. Republicans, aided by conservative Democrats, will continue to block important legislation (such as FMAP, or an extension of unemployment benefits or the energy bill) and then benefit from it electorally because the problem isn’t solved and people vent their bad mood on the party in power (see example here). With the electoral winds at their back – projections are for gains in the House, Senate and governorships – what’s the incentive for Republicans to change? The prototype for this behavior was health reform under Clinton which the Republicans were able to sabotage and then ride to victory in 1994. Running the same play in 2010 is likely to create new obstacles to ACA implementation in 2011. With a more closely divided Senate ahead, we can expect more replays of the FMAP dynamic until at least 2013.

What does the MO vote really mean? Not much, but VA decision more troubling

While ACA opponents are trumpeting the passage of Proposition C in Missouri, there really isn’t much ‘there’. The voter turnout was heavily weighted to GOP voters, making it more of a straw poll of Republican sentiment than a true test of public opinion. For example, in the Senate primary race 578,582 voted in the Republican primary while only 316,107 or 35 percent of the total voted in the Democratic primary – not too different from the 70-30 split on Prop C.

Further complicating the interpretation of Proposition C was the confusing wording of the multi-part question which addressed the mandate, the right to pay for health services and the ability to make changes to the rules for liquidating certain insurance companies. As a result, Proposition C is a much less accurate barometer of public opinion than the polling which is showing that public support for the ACA is growing (albeit slowly), opposition is declining and the “intensity gap is almost inside the margin of error.” However, the Missouri vote is likely to encourage continued ACA nullification efforts, which got something of a bigger boost from the Virginia court decision last week.

Essentially, the judge hearing the case ruled that, notwithstanding the supremacy clause of the Constitution, a state can pass a law that conflicts with federal statute and then sue to enforce it. To be sure, this is just a procedural decision and a number of legal experts believe the judge has erred and that the case will ultimately be resolved in favor of the ACA, but reading the judge’s reasoning can’t give supporters of the ACA great comfort; nor does the possibility of sending a case all the way to the current Supreme Court.

Be careful what you wish for

If ACA saboteurs really got their way, what would it mean?  Two new reports shed light on that question. A new analysis from economist Jonathan Gruber estimates that implementing the ACA without the Individual Mandate would increase premiums by 27 percent while Medicare Trustees say that total repeal would shift the Medicare trust fund into a deficit a dozen years earlier than current predictions (2017 vs. 2029). But then again, if your goal is to destroy Medicare and you don’t care about expanding coverage, maybe that doesn’t matter.

Is Howard Dean right about the Individual Mandate?

Criticism of the Individual Mandate does not only come from the right. Howard Dean recently was quoted as saying not only that the mandate would be repealed but that it wasn’t necessary. As evidence he cites his own state’s experience with providing near-universal coverage to children without a mandate. Actually Vermont, while offering good coverage for kids, is not unique. The state ranks 14 in the country with respect to the rate of children’s coverage according to Kaiser State Health facts, but even the state that ranks best – Massachusetts – lacks a mandate on kids coverage. The Massachusetts mandate applies only to adults. Does this prove Dean right? Not really.

Hypothetically a similar coverage result could be achieved without the Individual Mandate if Congress could be persuaded to make insurance subsidies sufficiently robust and accept a large migration of moderate-income workers from private to public coverage. However, the outcome of the Congressional debate over the ACA, when there were 60 Democratic Senators and a large majority in the House does not auger well for a large increase in publicly financed health insurance subsidies in the near future. Gruber’s analysis shows that only about 7 million people would gain coverage at current ACA subsidy rates without the Individual Mandate, as opposed to 32 million with the mandate.

The other alternative to the Individual Mandate often mentioned – late enrollment penalties – could work from the insurance industry’s point of view. Late enrollment penalties would protect against adverse selection by charging higher premiums to people who did not obtain coverage when it was available. It’s the method used to guard against adverse selection in Medicare Part D, but it is more likely to create insurmountable barriers to coverage for low-wage workers than it is to produce something approaching universal coverage.

– Michael Miller, policy director

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The Insider: Repeal Watch

Tuesday, April 27th, 2010

With Enemies Like This, Who Needs Friends?

As they tried to regain their footing after the surprise Senate election of Scott Brown, reformers received an unexpected boost from for-profit insurer Wellpoint. In February, the insurance giant announced it was planning to raise rates by 39 percent in California, and similarly large increases were reported elsewhere. Coming off a $2.5 billion profit in the last quarter of 2009, this didn’t sit so well with much of anyone but insurers, and became a major rallying point in the White House, Congress and advocates’ final push for reform. Some conservative commentators went so far as to blame Wellpoint for reform’s subsequent passage.

Now Wellpoint is at it again.  Recent headlines suggesting that the company routinely targets women with breast cancer for rescission boost the case that, if anything, the tougher insurance oversight that is part of the Patient Protection and Affordable Care Act doesn’t go far enough.   Since it seems the folks at Wellpoint can’t help themselves, it’s up to advocates and regulators to stop them before they kill again (no joke).

Repeal Watch 1: Public opinion
This latest Wellpoint scandal makes it crystal clear: The repeal chorus is defending the indefensible.  And yet, with 45 percent of conservatives getting most of their information from cable news, it’s unclear that the indefensible is making it on air. The latest Kaiser tracking poll (pdf) has some moderately good news for reformers: a plurality of the country supports reform, but many are confused (or misinformed) about what reform actually does.

This lack of understanding underscores both the need and opportunity for an aggressive public education effort using all available means—everything from paid and earned (and social!) media to one to one conversations at the community level.

More bad news for repealers (and good news for us): there is strong cross-partisan public support—among Democrats, Republicans and Independents—for the early provisions of reform like small business tax credits, $250 rebate for seniors with high drug costs and coverage for children with pre-existing conditions.

But people over 65 continue to hold a more negative view of reform than younger adults do—and that’s worrisome, especially in light of their disproportionately big turn out at the mid-term polls, which we’ve talked about here before.

Even so, repeal may not be the ticket to ride that some conservative activists hoped for. A recent poll of Florida voters showed that a majority think that the state Attorney General McCollum’s decision to sue the federal government was a bad idea and that McCollum, the front runner in the Florida governor’s race, was losing ground.

Repeal Watch, Part 2:  Breaking down the repeal arguments

Voters have good reason to be skeptical of the repeal efforts, which have overwhelmingly been advanced by candidates seeking higher office or as part of a larger right-wing electoral strategy. A growing number of state legislatures hold a similarly skeptical view—so far more than 12 have rejected repeal measures.

And they are right to, since the main repeal arguments are so far-fetched.  Basically, they amount to:

  • The law is illegal because the Medicaid expansion imposes new costs on states. By the same reasoning, other provisions of Medicaid law, such as the requirement to cover certain children or people with disabilities, would also be illegal, and Medicaid would become nothing more than a blank check written to the states. And what of those new costs? A recent CBPP report shows that new state costs through 2019 add up to only 1.25 percent of projected state spending, and that’s before factoring in possible offsetting savings to states.
  • States have the ability to selectively decide which federal laws they will obey. This argument essentially parallels the case made by segregationists almost 50 years ago and has been decisively rejected by the courts.
  • The individual mandate falls outside of Congress’ authority to regulate interstate commerce because it regulates “inactivity” and/or it is an impermissible tax.

But from a legal standpoint, the “mandate” falls squarely within Congress’ authority to raise taxes. Semantics aside, the individual mandate is not really a mandate, but a financial incentive to purchase coverage.  From an economic standpoint, it is no different than the existing tax subsidy that goes to employer-sponsored coverage; lowering the cost of doing something or raising the cost of not doing it are functionally the same (more at the New England Journal of Medicine–subscription required).

In sum, both the legal and political campaigns for repeal (if indeed the two are distinguishable) rest on shaky ground—and more and more voters and political leaders are beginning to figure that out.

–Michael Miller, director of strategic policy

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All eyes on Massachusetts

Tuesday, January 19th, 2010

1107806152_4182248e16_mIn what could be a strange and cruel irony, today’s special election to fill the late Senator Kennedy’s seat may deal a damaging blow to the prospects of passing a the bill that would culminate Kennedy’s life’s work in the Senate.  A surging Republican State Senator Scott Brown has pulled even (or in some polls slightly ahead) of state Attorney General Martha Coakley.  Brown would provide the 41st vote against reform and prevent an amended bill from being taken up in the Senate.

Procedurally, a Brown victory gives Congressional leaders several options to get across the finish line: Pass the Senate bill without amendment in the House, get a compromise done before Brown is seated, or go back and do a new bill via budget reconciliation.  Each of these paths is possible, but has some pitfalls.

In the first scenario: It’s unclear that the House can drum up 218 votes for the Senate bill, with possible defections coming from both the right and left of the Democratic caucus. (more on House vote count below). A  variation on this theme that could be more palatable to House members would be to pass both the Senate bill and a reconciliation package amending that bill at almost the same time.  The reconciliation package would reflect many of the agreements currently being negotiated between the House and the Senate (though some could potentially be beyond the scope of what is permissible through the reconciliation process).

Assuming they can conclude a deal and get a CBO score in time, passing a House-Senate compromise would be possible, but rushing the bill through ahead of Brown’s seating could be politically controversial.  Will Senators such as Nelson, Lieberman and Lincoln, who have been hardest to win over to supporting reform, remain supportive if Brown wins?  A variation on this theme might termed the ‘Franken scenario.’ If the race ends in a photo finish, a recount and possible subsequent legal action could take weeks or even months, giving Congress more than enough time to complete its work.

The least likely scenario appears to be starting over with reconciliation. This would require a substantial rewrite of the bill, taking time that Congress is eager to devote to other issues.

Counting noses in the House

With all roads to victory requiring another vote in the House, securing 218 votes in that chamber has become a critical task for House leadership and the White House, and should be the number one priority for grassroots supporters of reform.

When the House passed its version of reform in August, the victory margin was a mere three votes. Now, with one vacant Democratic seat and one Republican who is unlikely to provide the margin of victory, passage in the House requires persuading all of the anti-abortion Democrats to vote yes on a bill that contains the Nelson rather than the Stupak language on abortion, or persuading some members who voted no the first time to vote yes. This task could be made more difficult if a Brown upset in Massachusetts scares off more conservative members of the caucus—even perhaps some who voted yes the first time.

Progress on getting to Yes

Against an uncertain political backdrop, House and Senate negotiators appear to be making major progress on reaching agreement on a final bill.  They struck a deal early Friday morning on the tax treatment of health benefits that would raise the threshold at which the tax kicks in, make adjustments for plans that are high cost for reasons other than the scope of benefits, and provide additional temporary protection for plans negotiated through collective bargaining.

The revised provision is projected to bring in $60 billion less revenue, a hole that negotiators are trying to fill, in part, by taking a tougher line on cost containment from health industry groups. This tactic is yielding mixed results – the biotech industry in Massachusetts, for instance, is threatening to endorse Brown for Senate if protections for it in the bill are watered down.  While making adjustments to the health insurance tax was a key priority for House negotiators as well as unions and other progressives, the lost revenue will complicate efforts to make progress on another key issue—improving the affordability provisions in the Senate bill.

Although details haven’t emerged yet, the debate over whether Exchanges should be run from Washington with a state option or from the states, with a national fallback appears to be resolving productively. Reports indicate that the bill may still give states the right of first refusal over whether to run an Exchange, but establish more clear and uniform requirements for those that do.

Still to come: How to finance the elimination of the Part D doughnut hole, and a significant dispute over the extent to which immigrants will be discriminated against in reform.  There, the two issues in play are whether states would receive federal funding for covering legal immigrants under Medicaid, and whether undocumented immigrants would be barred from the Exchange even if they pay entirely with their own money.

Most of the other big issues—such as what employers would required to contribute, and how the abortion language will be structured—are expected to more closely track the Senate bill.  Whether the individual mandate will track the stricter House version or the more porous model included in the Senate bill, should depend on whether real affordability improvements are made in the bill.  A worst-of-both-worlds resolution would be a tough mandate and significant penalties coupled with inadequate affordability protections.

–Michael Miller, director of strategic policy

photo courtesy of croatry at flickr creative commons

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Posted in affordability, Health Reform Insider, national health reform | No Comments »