The New Health Dialogue

Can health reform work without the individual mandate? See my answer to this question and check out what other health policy analysts have to say over at the National Journal Health Care Experts Blog;

Our nation is closer than ever before to quality, affordable health care for all and opponents are getting desperate. Recent claims that that an individual requirement to purchase coverage -- a.k.a. the “individual mandate” -- is unconstitutional are nothing more than added mistruths coming from those opposed to health care reform. Let me offer two thoughts to counter the rhetoric:

• An individual mandate is absolutely necessary to ensure every American can afford health care. It will make the insurance market both more efficient and fair.

• An individual mandate is constitutional because of powers granted to Congress under the General Welfare Clause and the Commerce Clause.

An individual requirement to purchase coverage is not included in health reform legislation because members of Congress have an unyielding desire to require voters to do something. In fact, it is hard to imagine something politician-+s enjoy less. I have written on this topic extensively, so to be brief there are two main reasons we see this policy in the bills approved by both the House and the Senate:

• Balance the risk pool. We cannot force insurers to sell to all customers regardless of health status (which we must do) if we do not guarantee that the entire population is buying health insurance. Without an individual mandate, insurers would fear (correctly) that only the sick would buy, leading to adverse selection and higher premiums.

• Prevent free riders. Many people who forgo insurance today could afford to purchase it but choose not to. When a “free rider” gets sick and cannot pay their medical bills, providers raise rates for services. In turn, insurers raise premiums for the privately insured.

The individual mandate (when combined with insurance market reforms and subsidies to help people afford coverage) ensures everyone pays their fair share (and no more) for health care.

Luckily for reform proponents, this policy is in fact constitutional under the General Welfare Clause and the Commerce Clause. (And I thank Julie Barnes, an attorney and my colleague at the New America Foundation health policy program, for helping me think this through.)

General Welfare Clause. The power to tax and spend for general welfare is one of the broadest powers in the Constitution. Experts, including the nonpartisan Congressional Research Service and Mark A. Hall of Wake Forest, agree that requiring individuals to have health insurance by levying a tax and using the revenue to fund health benefits is well within the rights of Congress granted by the Constitution. Further, as stated by Yale Law School professor Jack Balkin, promoting health, expanding access to health insurance, and keeping people from being driven into poverty by medical costs “surely count as contributions to the general welfare.” We couldn’t agree more.

Commerce Clause. While many legal analysts believe this debate should begin and end with the General Welfare Clause, opponents argue that an individual mandate to purchase health insurance is not within Congress’ powers to regulate commerce. The Commerce Clause allows Congress to regulate economic or commercial activities substantially. As such, an individual mandate to purchase health insurance is well within Congress’ authority because it undeniably impacts the insurance industry and the commerce of the nation. Indeed, the Senate bill itself declares the mandate is intended to regulate economic activity, and is thus constitutional:

“The individual responsibility requirement provided for in this section is commercial and economic in nature, and substantially affects interstate commerce.”

Washington and Lee professor, Tim Jost, goes on to list other portions of the Senate legislation that enumerate how the individual mandate qualifies as regulation of interstate commerce in a recent Health Affairs blog post.

Despite these compelling arguments, there is no legal precedent for an individual mandate to purchase health insurance. This virtually guarantees this debate will persist. So we leave you with a list of legal scholars who agree, such as David Orentlicher, Co-Director, Hall Center for Law and Health at Indiana University School of Law-Indianapolis and Walter Dellinger, acting solicitor general during the Clinton administration. Additionally, in a floor statement on Dec. 22, 2009, Max Baucus quoted several legal scholars who believe the mandate is constitutional, including: Professor Erwin Chemerinsky, a renowned constitutional law scholar, Jonathan H. Adler, Professor of Law at Case Western Reserve University School of Law, Doug Kendall of the Constitutional Accountability Center, and Professor Michael Dorf of the Cornell University Law School.

Will we see court challenges? Inevitably. Will they prevail? I think not.