On Monday, March 26, the US Supreme Court will begin hearing challenges to President Obama’s health care reform initiative, the Affordable Care Act. The Court will listen to 6 hours of oral arguments over the course of 3 days.
The Affordable Care Act is designed to make health insurance accessible and affordable for all Americans. Two ways it aims to do so is by expanding Medicare eligibility and instating an individual mandate that will require all adult Americans to buy health insurance beginning in January 2014. Failure to buy insurance would result in a monetary penalty.
The biggest issue surrounding the initiative is the individual mandate. Opponents of the mandate, which include 26 states, claim that it is unconstitutional, because the government does not have the authority to require an individual to purchase anything. Proponents of the law say that the mandate is valid under the Constitution’s Commerce Clause, which allows Congress to regulate commerce that takes place among states. On the final day of hearings, the Court will hear arguments about the severability of the mandate and whether it alone can be struck from the law.
However, the individual mandate plays a key role in ensuring the effectiveness of many of the provisions in Affordable Care Act. Under the new law, insurance providers are prohibited from denying applicants based on pre-existing conditions and will be limited on how much they can vary premiums based on age and health. If the individual mandate is repealed, healthy individuals could wait to purchase health insurance until they become sick, which may cause insurance premiums to increase dramatically.
Severing the individual mandate would also affect how many people actually choose to enroll in the new programs. According to data from the RAND Corporation, under the individual mandate, an estimated 27 million individuals will receive coverage. However, if the mandate is removed, that number would fall to 15 million people, because younger, healthier people would most likely choose not to purchase insurance. They estimate that insurance premiums would rise by 2.4%, and government spending would increase by more than double for each person newly enrolled in an insurance plan.
The Court will also hear testimony about the Medicaid expansion, which will be amended to include individuals under the age of 65 years with annual incomes up to 133% of the federal poverty line, about $14,850 for a single adult and $30,650 for a family of four in 2012. The states are arguing that this will force a transformation of the current cooperative federal-state partnership, even though the government maintains that it will initially cover 100% of the expansion costs. Health officials are also concerned that medical professionals will be unable to handle the influx of patients due to low reimbursement rates.
The Supreme Court decision can go several ways. The Court can find in favor of the entire initiative, they can strike only the individual mandate and uphold the rest of the initiative or deem the entire law unconstitutional and invalid. The final ruling is expected in June.
