High Court Focuses on ‘Individual Mandate’

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The Supreme Court last week heard arguments on the constitutionality of the 2010 law that revamps the health care system, with conservative justices indicating considerable skepticism over a provision that would require most individuals to buy health insurance or face financial penalties.

The court heard oral arguments on this “individual mandate” last Tuesday, and the following day considered whether the entire law – the Affordable Care Act (ACA) — could stand if that requirement were struck down. Conservative and liberal justices appeared to differ sharply on this issue, with the liberals arguing for a more limited ruling.

On Wednesday the court also considered the complaint from 26 state governments that the law coerced them with enormous financial incentives to expand Medicaid coverage.  Again sharp differences seemed to emerge on the court. A decision in the case is expected in June.

The Concord Coalition, which is not a party to the case, has cautioned that the more controversial parts of the law, including the individual mandate, help make possible the more popular features, such as ensuring that people with pre-existing medical conditions can buy insurance. The individual mandate prevents people from waiting until they are sick to buy insurance, and thus the requirement keeps the insurance pool more stable and less costly as a whole.

From a fiscal standpoint, the biggest concern would be that if the mandate is determined to be unconstitutional and the court strikes down the entire law, the Medicare cuts and cost control efforts in the ACA would be eliminated as well. In that case Congress would need to quickly pass new cost-control measures that are at least as effective as those that are in the law. In an election year that might be quite difficult, but fiscally we cannot afford to lose any time. 

External links:
CBO Estimates for Insurance Coverage Provisions of ACA
Cost Estimate Confusion on Health Care (Concord Blog Post)

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