What Hangs in the Balance

March 23, 2012
Guest Post

By Sara Rosenbaum, Harold and Jane Hirsh Professor, Health Law and Policy, George Washington University School of Public Health and Health Services. This post is part of an ACSblog online symposium around oral arguments on the Affordable Care Act. 

When the curtain rises on the Affordable Care Act arguments before the United States Supreme Court, the nation will be fully engaged in what is perhaps the most important legal examination in generations regarding Congress’s constitutional powers to tackle issues of unsurpassed social and economic concern. Although Chief Justice Roberts has likened the role of the courts to that of an umpire in a baseball game, one can hope that the Justices will view the case for its broader significance for the health care system as a whole, as well as for the 32 million children and adults whose access to health insurance rests great measure in their hands. A declaration that the Act is unconstitutional will not merely nullify its provisions. Under federal budgeting principles, it will effectively roll the federal health reform spending baseline back to zero. The likelihood that Congress will, anytime soon, find the $1.5 trillion needed to make coverage affordable for nearly all Americans is slim to nil, something that the Act’s opponents frankly are banking on.

It was perhaps inevitable that health care would be the issue to trigger a full-throated debate over the constitutional relationship between the federal government and American society. The signature domestic policy achievement of the Obama Administration, the Act stands as a testament to lawmakers’ ability to devise national solutions that simultaneously weave a wide array of existing laws – Medicaid for the poorest Americans, tax subsidies for low and moderate income individuals and families, and federal laws that regulate the behavior of insurers in the marketplace – into a complex legislative intervention of universal scope and impact.

The Act establishes the blueprint for resolving the epic market failure of the nation’s long-troubled health insurance system, whose shortcomings are legion and have been extensively well documented over decades of research. The particulars of its failures would fill thousands of volumes. They begin with a system that as of 2010 entirely excluded nearly one in five non-elderly Americans on the basis of health status, wealth, or both. They move on to coverage policies that discriminate against the sick through a nearly endless combination of coverage exclusions and limitations and the use of annual and lifetime coverage limits. Even at the other end of the health spectrum, health insurance fails the people it covers by denying coverage for the most cost-effective forms of preventive care.   

Given the trajectory of coverage erosion over the past generation – from more than three quarters of the working age population covered by an employer plan in 1977 to roughly 60 percent today -- the nation is inexorably moving toward a time when all but the most affluent nonelderly Americans will find themselves always or frequently outside the health care system, uncovered and without the personal means to afford health care when it is needed. Much of what has been written about the Act focuses on the 32 million people who will gain coverage under the Act. But it is just as important to focus on what the Affordable Care Act will do for the rest of us, the 300 million men, women and children who depend on a broken coverage system and who are one illness, divorce, or layoff away from a devastating loss of insurance. For all of us, the Act represents the type of economic and social safety net that was enacted for the elderly in 1965 with passage of Medicare. By creating a solution that ensures that almost no American will be forced to exist in the shadows of the health care system – and stop the $100 billion annual cost shift on those of us who have coverage -- the Act is essential for all of us, not just the lower and moderate income people who stand to gain the most in the near-term. 

In order to achieve this overarching goal while building on the system that is currently in place, Congress had to take two basic steps, both of which are in the crosshairs of the constitutional challenge now before the Court. First, it was essential that lawmakers establish large, stable, subsidized health insurance risk pools containing millions of healthy lives in order to assure that coverage is both affordable and guaranteed regardless of health status.  In effect, the minimum coverage requirement acts as the policy basis for the guaranteed issue and community rating reforms, the law’s foundational provisions.

Second, a mechanism had to be found to cover the poorest Americans, whose incomes are below the federal income tax payment threshold. Where the poor are concerned, a system that operates based on advance refundable tax credits is not workable. Moreover, on the theory that in a legislative system structured to produce incremental lawmaking, the most politically successful approach to health reform inevitably will be one that is able to evolve organically from the system already in place. For these reasons, Congress did the logical thing and built out Medicaid, the nation’s largest source of health insurance coverage for the poor. In reality, the Congressional Medicaid restructuring effort began in the 1980s with the extension of mandatory coverage to low income children and pregnant women; the extension of coverage to all nonelderly low income adults is merely the culmination of what began nearly 30 years ago. To support this expansion, and in a virtually unprecedented departure from previous policy, Congress financed virtually its entire cost in order to make the expansion financially feasible for the states.  

Certainly Congress might have traveled a different and structurally grander pathway to health reform, with a more pronounced departure from modern political sensibilities.  Lawmakers might have chosen, for example, to replace a fractured and dysfunctional patchwork of public and private insurance with a unified public insurance program, essentially extending Medicare to all Americans. But the political context in which the President and Congress sought solutions made this approach a non-starter. Viewed through this lens, an implicit question looming before the Court is whether the Constitution should be read to empower Congress to enact national health reform, only when the solution chosen is politically unpalatable.  Such a result would amount to a 21st century variation on Joseph Heller’s immortal Catch 22, but one with a particularly tragic twist for those Americans who exist at the edges of the health care system.

The nine Justices who consider the constitutionality of the Affordable Care Act are all well-insured, as are the Congressional opponents of health reform who have so assiduously worked for its repeal. One only can hope that once the arguments conclude and the deliberations begin, the broader meaning of the case for the future of American health care will occupy a front and center position.