individual responsibility provision

  • September 6, 2011

    by Jeremy Leaming

    As debate continues to roil over the constitutionality of the landmark health care reform law’s mandate that individuals, starting in 2014, maintain a minimum coverage of health care insurance, Drake University constitutional law expert Mark Kende explains why the most controversial provision of the Affordable Care Act, and the one that is at the center of the litigation challenging the measure, is integral to the law’s intent – to ensure more Americans have health care insurance. 

    Several federal appeals courts have already weighed in on the constitutionality of the individual responsibility provision, and the U.S. Court of Appeals for the Fourth Circuit may issue an opinion soon on the matter.

    In a recent column for the Des Moines Register, Kende, the James Madison Chair in Constitutional Law, and Director of the Drake Constitutional Law Center, touches upon the constitutionality of the provision, but highlights why the provision is crucial to ensuring that more people are covered by health care insurance and that insurers cannot discriminate against people with pre-existing conditions.

    Kende says that if the individual responsibility provision of ACA were invalidated it would be impossible for the act to cover 30 million Americans who are now uninsured or prevent insurers from declining coverage to those with pre-existing conditions.

    Kende writes:

    If John and Jane Doe are free to wait to buy insurance until they are sick, then they will drain the money from the system – creating a tragedy of the commons. For example, due to their lack of planning and preventive action, John and Jane may end up having to be treated in the emergency room which escalates costs dramatically for everyone.

    Insurance only works when there is a balance of payments in and payments out. If we tell insurance companies that they can no longer discriminate against pre-existing conditions, but we allow patients to buy insurance at whim, then we create an incentive for patients to only buy insurance once they need medical care – a surefire strategy for bankrupting the system.

    Kende highlights the June opinion from the U.S. Court of Appeals for the Sixth Circuit, which upheld the individual responsibility provision against a constitutional challenge. One of the judges who found the provision constitutional, Jeffrey Sutton, appointed by President George W. Bush and a Federalist Society favorite, “agreed with the majority position that Congress has the jurisdiction to regulate the insurance market in this manner in order to ensure regulations are effective.”

    Simon Lazarus, public policy counsel to the National Senior Citizens Law Center, and author of two ACS Issue Briefs on the ACA, writes about Judge Sutton’s opinion in this ACSblog guest post.

    For more analysis and coverage of the litigation surrounding the ACA, see the Affordable Care Act Resource Page.

  • May 10, 2011

    The Right’s over-the-top rhetoric regarding a provision of the Affordable Care Act (ACA) that requires some individuals to maintain a certain amount of health care insurance starting 2014 is undermined by the fact that similar measures are used in social insurance programs that have been upheld by the courts, and have enjoyed bipartisan support, writes Simon Lazarus in a guest blog post  for The New Republic.

    Last week, in this Slate article Lazarus, public policy counsel for the National Senior Citizens Law Center, outlined two provisions in U.S. Rep. Paul Ryan’s so-called “Roadmap to Prosperity” that use tax incentives similar to the ACA’s individual responsibility provision. Conservative bloggers, such as the National Review’s Ramesh Ponnuru, took issue with Lazarus’s observation.

    In his new piece, Lazarus, author of ACS Issue Briefs on the constitutionality of ACA, says that Ryan’s provisions use “the tax code to pressure people for private health insurance in ways not materially different from and no less (indeed, if anything, more) coercive than the ACA mandate.”

    Lazarus continues:

    But, more important, the ACA provision operates by unambiguous design as a pay-or-play option. Paying the penalty relieves taxpayers of the obligation to purchase insurance. This is not standard practice; ordinarily, paying statutory penalties does not let violators off the hook of complying, e.g., in the case familiar to us all, of penalties for late or unpaid taxes. Even the penalty provisions themselves are crafted as reasonable incentives rather than punishments: penalties are not assessed at all against people with incomes below the income tax filing threshold; penalty amounts are calculated as (small) percentages of the taxpayer’s income above the filing threshold; they are not applicable at all to taxpayers for whom buying minimum insurance coverage would cost more than eight percent of their income. Moreover, the law specifies that individuals who fail to pay the penalty are not subject to criminal prosecution for tax evasion, nor is their property subject to tax liens or levies.

    Lazarus’s first ACS Issue Brief covered the constitutionality of the individual responsibility provision, concluding that it is well within constitutional authority granted to Congress.

    In his second ACS Issue Brief, Lazarus examined the radical legal arguments being made in courts throughout the country to scuttle the health care reform law, but also greatly hinder the ability of the federal government to function. That brief, “The Health Care Lawsuits: Unraveling a Century of Constitutional Law and the Fabric of Modern American Government,” is available here

    This morning a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit heard oral argument in two cases challenging the constitutionality of the ACA. The cases are Liberty University v. Geithner, and Virginia v. Sebelius. The cases come to the federal appeals court from two different U.S. District Court Judges.  In November of last year, U.S. District Court Judge Norman K. Moon upheld the constitutionality of the ACA provision. U.S. District Court judge Henry Hudson invalidated the provision in Virginia v. Sebelius.

    Audio of the oral argument in both cases will be available at 2 p.m. today by clicking on this link.