There has been a great deal of discussion recently regarding the constitutionality of the “individual mandate” in the Affordable Care Act, more commonly known as Obamacare. The most controversial part of the law is the mandate that everyone purchase a minimum health insurance policy or face escalating penalties beginning at around $700 a year. This summer, the Supreme Court will decide if the mandate to purchase insurance will remain constitutional. Additionally, the court will decide if the entire law should be struck down, or if only the mandate would be struck down. There are a lot of pieces to the ACA, such as prohibiting health insurance companies from refusing to sell exorbitantly priced policies to those with “preexisting conditions” or refusing to sell insurance to some people outright as well as mandating insurers to allow young adults to remain on their parents plans until they reach 26 years of age.
One of the biggest problems with our current health care system stems from another mandate by the Emergency Medical Treatment and Active Labor Act (EMTALA) passed in 1986 which says you cannot be denied treatment in an emergency room. Thus, if you do not have insurance, you can go to an emergency room for treatment and subsequently refuse to pay any bills or declare bankruptcy if the bills are too high for one to afford. The remaining part of the population who is insured currently picks up the tab to pay for the services of those who are uninsured. The ACA was an attempt at helping to reform this system by forcing everyone to purchase health insurance. Without the mandate to purchase coverage, individuals would be able to wait until they were diagnosed with a serious disease to purchase coverage.
The problem with a “free-market” for health insurance is what we call an adverse selection problem. Most people who are healthy would choose to not participate in a plan where they have to pay for something when they don’t need it. The only people who want to get low-cost medical benefits are those who are either sick or participate in a lot of risky behavior. If you are healthy, and afraid of the possible consequences of getting ill, you might also purchase health insurance. If the Supreme Court removed the individual mandate, but kept the “preexisiting condition” clause anyone could then purchase reasonably priced insurance after they are deemed ill.
This is obviously not how insurance is supposed to work. People pay insurance premiums on their homes to a company that collects premiums from thousands of different homeowners in many different areas. When a flood, fire, or other disaster wipes out hundreds of homes at once, the company uses the proceeds of all the collected premiums to help rebuild the destroyed areas. Health insurance works in a similar way such that a diversity of people pay into the system to help provide care to those that are ill within the group.
Congressman Paul Ryan has a proposed change to the U.S. budget that would change our system of Medicare to something similar to the ACA. Currently under Medicare, if you are over age 62, you are required to purchase coverage (at highly subsidized rates) or pay a penalty. Congressman Ryan’s plan is to instead provide a subsidy (like a negative tax) to those currently eligible for Medicare, that they could then use to purchase coverage on an open market. Think about it this way, if you do not buy insurance under Ryan’s plan, you are going to have to pay higher taxes (much higher than the proposed $700 fine in the current ACA law). If you do buy coverage, the government kicks in some money to those with lower and middle incomes to help them cover the cost of the plan. Compare this to the ACA that says you have to pay a fine if you do not buy coverage. Rather than pay higher taxes for not purchasing coverage, you are paying a fine for not purchasing coverage.
Below, I have listed a few articles to get you started thinking about this topic. You should compose your blog comment to be around 250 words in length, forming a cogent thought that is supported by some factual evidence that supports your opinion. Do not simply state your opinions, but find facts that support your opinion.
Questions you might consider:
- Do you believe that the Supreme Court should overturn the ACA individual mandate or the entire law? Why? Do you think this is a fundamental attack on your Constitutional rights as a member of a state? You have to think about the economy and the Constitution here.
- Do you believe health care is a good that can be regulated because it is part of “interstate commerce”, meaning it crosses state boundaries? If so, then Congress should have the right to regulate it.
- Do you believe the Ryan plan for Medicare differs fundamentally from the ACA for non-Medicare? Think about the role that fines play in the ACA compared to tax subsidies in the Ryan plan.
- Do you think the mandate that hospitals should have to treat all comers is legitimate? Should this act of Congress be overturned as well?