Health Care Reform

  • March 15, 2012
    Health Care Reform
    What It Is, Why It's Necessary, How It Works
    Jonathan Gruber

    By Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology

    The Affordable Care Act (ACA) represents the most fundamental reform of the U.S. health care system of the past 50 years. Such an important social policy change should be widely understood by our citizens so that it can be most effectively implemented. Yet the ACA is sufficiently ambitious and complicated that understanding of the law is quite poor. This is one of the reasons I chose a graphic format for my book, Health Care Reform: What It Is, Why It's Necessary, How It Works.

    You can’t understand the need for, and the accomplishments of, health care reform without appreciating the fundamental failure in health insurance markets today. Unless you are offered insurance by your employer, or by the government, there is effectively no meaningful insurance in America. Individuals subject to the harsh “non-group” market face exclusions from pre-existing illness or can be dropped as soon as they become ill. And the key to solving this problem is the individual mandate, which can end insurance market discrimination by promoting broad insurance participation.

    At the heart of this reform is what I like to think of as a “three legged stool” designed to solve this problem and, as a byproduct, cover most of our nation’s uninsured. The first leg is insurance market reform which will end the ability of insurance companies to discriminate against the sick; no longer will we be one bad gene or one bad traffic accident away from bankruptcy. The second is the individual mandate, which requires insurance coverage so long as that coverage is affordable (costs less than 8% of income). This mandate is critical; without it, insurers will react to insurance market reform by raising prices because they are afraid only the sick will buy insurance. But you can’t mandate insurance coverage unless it is affordable, which it is not for low income Americans.  That’s why we need the third leg of the stool: extensive subsidies that will make health insurance affordable for those living below median income.

  • February 8, 2012

    by Jeremy Leaming

    Opponents of the Affordable Care Act’s provision that requires people who can afford it to obtain minimum health insurance coverage or pay a penalty with their annual income tax return have loudly argued that it upsets the balance between the regulatory powers of the federal government and state governments.

    But in a recent piece for The Times-Picayune, a New Orleans daily, distinguished law professor at the University of Southern California Rebecca L. Brown says the federalism argument is “false.”

    First she notes there is “no serious argument that health care and insurance purchasing are not economic, or that they affect purely local interests – the arguments in all prior Commerce Clause challenges.” (Indeed the Constitution’s commerce clause provides Congress the authority to regulate conduct that substantially affects interstate commerce. The health care market accounts for more than 17 percent of the U.S. economy, and everyone, at some point, participates in it or is constantly at risk of incurring substantial medical expenses.)

    Opponents of the law are aware of the parameters of the commerce clause and federal court precedent surrounding it, and are actually pushing an individual-rights argument. “The Affordable Care Act challenge,” Brown writes, “powerfully evokes that libertarian tradition by arguing that the requirement to purchase health insurance invades personal decision-making.”

    But that argument, Brown continues, is as wobbly as the federalism argument.

  • January 9, 2012

    by Jeremy Leaming

    As time quickly approaches for the U.S. Supreme Court to consider the highly politicized challenges to the Obama administration’s landmark domestic accomplishment, health care reform, anxieties are rising among supporters over the strategy used to craft and defend the law.

    Simon Lazarus, an expert on the Patient Protection and Affordable Care Act, or ACA, writes in a new piece for Slate that such concern is misplaced, at best.

    Lazarus, author of an ACS Issue Brief on the constitutionality of the ACA’s minimum coverage provision, which requires certain people to purchase health care coverage starting in 2014 or pay a penalty via their income tax return filings, notes that some preeminent health policy experts, such as Paul Starr, argue that lawmakers would have been smarter to root the minimum coverage provision in Congress’s power to tax, instead of both in its power to regulate commerce and to levy taxes.

    Acknowledging that Starr’s “stature is beyond question,” Lazarus, public policy counsel for the National Senior Citizens Law Center, maintains that “on this matter of legal strategy, his certitude seems naïve. Indeed, especially in light of the ACA mandate’s actual track record in court to date, his take seems downright backward.”

    First, Lazarus notes that opponents of the administration were itching to scuttle its health care reform law -- regardless of what constitutional power the mandate was rooted.

    He writes, “The steam powering their opposition sprang from two sources: 1) partisan politics, part Tea Party zeal and the desire to discredit Barack Obama and obstruct his agenda; and 2) a hope, animating the libertarian legal advocates who staffed the lawsuits, of replacing existing law with pre-New Deal, so-called ‘Lochner Era’ doctrines that would invalidate substantially all 20th–century regulatory, civil rights, and safety net legislation.”

    Next Lazarus defends the administration’s case for the ACA, saying before the current high court it looks best in the “Commerce-Clause format.”

    Lazarus concludes, in part, that a string of “eminent conservative appellate judges have blown off opponents’ demands to overturn this allegedly ‘unprecedented’ federal power-grab. On the contrary, Republican appointees have concluded that upholding the ACA mandate is compelled by the text of the Commerce Clause and Supreme Court precedent, that it is no more ‘coercive’ than other measures, such as dedicated taxes and tax write-offs undergirding major existing health-insurance laws, and even, that the ACA’s approach could be a valuable model for conservative designs to privatize other components of the social safety net.”

    On Jan. 6, the Department of Justice filed a brief with the high court defending the ACA.

  • January 6, 2012

    by Jeremy Leaming

    The Obama administration’s signature domestic achievement, the Patient Protection and Affordable Care Act, which requires many people to purchase health care coverage in 2014, is a reasonable and constitutional means to provide millions of uninsured with health care coverage, the Department of Justice argues in a brief lodged today with the Supreme Court.

    The brief “arguments track the Obama administration’s arguments before lower courts,” Brian Beutler reports for TPM, which also provides access to the 130-page document.

    As Beutler notes, the DOJ explains why the law’s so-called individual mandate is a constitutional means to help millions of Americans afford health insurance. The law bars insurance companies from denying coverage or charging more to people who have pre-existing medical conditions. For that provision of the law to work, however, the law must require individuals who can afford health insurance to obtain minimum coverage or pay a penalty via their annual income tax returns.

    The DOJ’s brief argues that the law is a permissible regulation under its constitutional authority to regulate commerce and its taxing power.

    The federal government already regulates the health care market – Medicare and Medicaid are examples. However, millions of people, because of a lack of additional regulation have been unable to afford health care insurance or been denied it because of preexisting conditions.

    The DOJ argues that the law’s so-called individual mandate will bridge the gap.

    “The uninsured shift tens of billions of dollars of costs for the uncompensated care they receive to other market participants annually,” the brief states. “That cost-shifting drives up insurance premiums, which, in turn, makes insurance unaffordable to even more people.”

  • November 14, 2011
    Guest Post

    By Fazal Khan, a law professor at the University of Georgia specializing in health law. Prof. Khan has both law and medical degrees.

    Today the U.S. Supreme Court confirmed what most of us expected, announcing that it will review the constitutionality of the Affordable Care Act. As the justices begin to deliberate, they would be wise to look to a masterful amicus brief by prominent constitutional law scholar Kathleen Sullivan as a meaningful template for Supreme Court action.

    Sullivan’s brief, in which she asks the Court to grant cert in the 11th Circuit case that the justices today accepted, addresses those arguments most likely to concern Justice Anthony Kennedy, the swing vote on the Court, and provides ample support from Justice Kennedy’s record to suggest he will and should vote to uphold the law. Before detailing the arguments in Sullivan’s brief, filed on behalf of the California Endowment ("a private foundation committed to the expansion of affordable, quality health care for all Californians"), I summarize below how we reached this point.