Insurance Mandate May Be Health Bill’s Undoing

Published: November 15, 2011 - New York Times

WASHINGTON — As Barack Obama battled Hillary Rodham Clinton over health care during the Democratic presidential primaries of 2008, he was adamant about one thing: Americans, he insisted, should not be required to buy health insurance.

“If things were that easy,” Mr. Obama told the talk show host Ellen DeGeneres in February of that year, “I could mandate everybody to buy a house, and that would solve the problem of homelessness. It doesn’t.”

Now President Obama may wish he had stuck to those words. On Monday, the Supreme Court agreed to take up a constitutional challenge to his landmark health care bill, and a decision could come in the midst of Mr. Obama’s 2012 re-election campaign.

At the heart of the challenge is “the mandate” — a provision requiring nearly all Americans to buy coverage or pay a penalty — that he so vigorously opposed as a candidate. If it is struck down, much of his signature legislative achievement could fall with it in a decision that would undoubtedly be construed as a rebuke to the president.

Polls show the mandate is by far the most unpopular provision of the 2010 bill, and now Mr. Obama, who ultimately embraced the idea, is in the awkward position of defending something he once rejected.

“I think his political instincts were right,” said Paul Starr, a health policy expert at Princeton University who argues it is possible to expand coverage by other means. “I think he saw that there could be a backlash against a mandate and that there needed to be some other kind of approach. So in a way, I’m sorry he didn’t stick to his original position.”

The theory behind the mandate, according to its proponents, is this: Requiring coverage brings both sick and healthy people into the pool of those insured, which is essential because premiums paid by the healthy offset the cost of covering the sick. Otherwise, healthy people wait until they are ill to buy insurance, which leads to what policy analysts call a “death spiral” in which premiums skyrocket out of control.

As a candidate, Mr. Obama did favor requiring all children to have insurance. Once he took office, his top aides began examining other options, said Ezekiel J. Emanuel, a former health policy adviser to Mr. Obama. The aides studied the experience of Massachusetts, which has a mandate, and health laws in other states that do not. They considered voluntary incentives to get healthy people to enroll.

Their internal modeling, Dr. Emanuel said, showed that a mandate would extend coverage to 32 million uninsured people. Without such a requirement, he said, the administration estimated it could cover 16 million people at three-fourths the cost of covering the 32 million. Mr. Obama reversed himself.

“I don’t think it was a slam-dunk,” said Dr. Emanuel, now a vice provost at the University of Pennsylvania and a regular contributor to the New York Times Op-Ed page. “The president did take very seriously his reputation for following what he said, so he was very reluctant to change his opinion unless he was very convinced.”

Health insurers also insisted on a mandate, as did the Democrats who controlled Congress. In July 2009, Mr. Obama told CBS News that he was “now in favor of some sort of individual mandate as long as there’s a hardship exemption” for people who truly could not afford to buy insurance.

While the White House may have been prepared for the public unhappiness over the provision, it appears to have been caught off guard by the constitutional challenge — in part because Obama advisers regarded the mandate as a conservative notion. The idea gained currency in the early 1990s, when some Republicans proposed their own version of an “individual mandate” as an alternative to the “employer mandate” in President Bill Clinton’s health plan.

Polls show the individual mandate is unpopular. The Kaiser Family Foundation, which tracks public opinion on the health measure, reported in March that 74 percent of Americans would keep, rather than repeal, the law’s provision barring insurers from discriminating against people with pre-existing conditions. But only 27 percent would keep the mandate. (A CNN poll released Monday found 52 percent support the mandate, up from 44 percent in June, though unlike Kaiser CNN did not explain that failure to comply would result in a fine.)

The Obama administration insists that if the mandate falls, so does the provision on pre-existing conditions. “The mandate,” said Jonathan Gruber, a health economist at the Massachusetts Institute of Technology who has advised the administration, “is the spinach you need to get the chocolate you want.”

Chris Jennings, a former health policy adviser to Mr. Clinton, makes much the same point. “Health reform without an individual requirement,” he says, “is like driving a train without tracks; you can still move, but you can’t get to your coverage destination and it will be a rougher and far more costly trip.”

But not all economists agree. Some say the government has other ways to make sure enough healthy people buy insurance and offset the cost of the sick. One option is “auto enrollment,” in which the government would automatically enroll citizens in insurance plans, but give them the chance to opt out. Mr. Starr, the Princeton professor, who helped draft the Clinton health bill, proposes a system of penalties and incentives to get healthy people to enroll. For instance, people could be given a choice: Sign up now, or wait another five years.

Of the four appeals courts that have weighed the constitutionality of the Patient Protection and Affordable Care Act, only one has struck it down. The most recent decision, issued last week by the District of Columbia Circuit Court of Appeals, upheld the law. The Supreme Court decision will almost certainly thrust health care back into the public debate next year. But its effect on Mr. Obama’s re-election campaign remains to be seen.

Professor Starr says a finding that the mandate is unconstitutional would be “a severe blow” to the act, and the Obama presidency.

But Drew Altman, the president of the Kaiser Family Foundation, said health policy rarely affected election outcomes. “If any health care issue is a voting issue,” Mr. Altman said, “it’s not health reform, it’s Medicare.”

Some experts say that if the bill had imposed a tax on Americans who did not have insurance — rather than requiring them to buy a policy — the entire legal fight might have been avoided.

“It’s a little bit surprising that the constitutional arguments weren’t out there sooner,” said Mark McClellan, who ran Medicare under President George W. Bush. “They could have written it in a way that would have better overcome the constitutional challenges.”

That may be what the Supreme Court orders. But for Mr. Obama, it may be too late. The Republican leaders in Congress want to repeal the bill, not rewrite it.