About 3 weeks ago, by a margin of 2-1, the Eleventh Circuit Federal Court of Appeals in Atlanta struck down the constitutionality of a key provision of the Patient Protection and Affordable Care Act (ACA) -- the individual mandate.
The individual mandate, scheduled to go into effect in 2014, requires all Americans to purchase private health insurance as a means of pooling risk. This is a way of making coverage for a larger population – including those with pre-existing conditions – affordable by spreading the risk and cost among more people. This is also how insurance can afford to cover catastrophic events.
Earlier this summer, on June 29, the Sixth Circuit Court upheld the constitutionality of the ACA in its entirety. It seems pretty clear now, based on the split Circuit Court decisions, that the issue will end up being decided in the Supreme Court, which does not bode well for the ACA’s fate given the Court’s current Republican-appointed majority and their less-than-progressive leanings.
I wholeheartedly support the ACA because it fundamentally aspires to improve health care and reduce costs in the U.S. by expanding access to health insurance, not by reducing it.
That said, I think the constitutionality of the individual mandate is a legitimate question that should be examined closely. The Appellate court decisions cannot simply be chalked up to politics. The Sixth Circuit Court, which upheld the ACA (including the individual mandate), featured a President George H.W. Bush appointee (Judge Sutton) signing the majority opinion. Meanwhile the Eleventh Circuit Court, which struck down the individual mandate specifically, featured a Clinton appointee (Judge Hull) in the majority.
Does the Constitution allow the Federal government to require American citizens to purchase something from a private company? The Eleventh Circuit Court didn’t think so: "Congress may regulate commercial actors," reads the majority opinion. "But what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die." The point is debatable, and ultimately, will probably be decided by the Supreme Court.
Regardless of the outcome, the fact remains that the nation’s health care costs will continue to rise without better access to health care for our citizens, especially the uninsured and under insured. Those who believe that the solution to controlling health care costs is by simply cutting government health care spending and shifting the costs to the individual (e.g., Paul Ryan) are dangerously short-sighted and misguided.
The fact is, however, that the Supreme Court may very well end up ruling that Congress may not require individuals to purchase private health insurance.
But there’s a better option, one that was unfortunately abandoned by President Obama and the Democrats in hopes of getting some bipartisan support for the ACA. A single payer system based on a Medicare for All model, or at least a public option, deserved a much longer look than it received. And, unlike the individual mandate, there’s no question about its constitutionality.
The Federal government already requires every single American to purchase insurance in the form of Medicare and Social Security, which are two of the most popular government programs that exist. The difference between this and the individual mandate, of course, is that Medicare and Social Security are financed by payroll taxes -- mandatory deductions from everyone’s monthly paycheck. And there’s no question that the Constitution allows Congress to tax its citizens in order to finance programs for public benefit.
Our current patchwork system of for-profit, third party health insurance companies is failing miserably. Private insurance wastes valuable health dollars on overhead, underwriting, billing, sales and marketing departments, executive salaries, and focus foremost on huge profits for their shareholders -- not the health and well-being of those they insure. Combine this with the expensive administrative staffs that physician offices and hospitals must maintain to interface with their bureaucracy and different billing requirements for each insurance company, and Americans are left with over 30 percent of their health dollars wasted needlessly on non-health related costs.
The best chance our country has to control health care costs, expand coverage to all of its citizens, and dramatically improve the quality of care is by moving towards a single payer system, which would essentially be Medicare-for-All. Single payer financing would save enough on overhead to provide universal coverage for all Americans. Costs would be controlled through negotiated fees, global budgeting, and bulk purchasing.
A single payer system would not be as revolutionary as many would have us believe, especially since two of our nation’s most successful and efficient health insurance programs, the VA system and Medicare, are government run single payer systems following this very model.
Vermont recently passed legislation that will transform its payment system to a single payer model by 2015. The current projections are for a 25 percent annual reduction in health care spending and expansion to true universal health insurance coverage, which would be a remarkable combination of accomplishments. We should all watch closely as to how their courageous efforts fare.