The Right Prescription

Obamacare Can’t Be Served À La Carte

If the Supreme Court can't stomach the mandate, the whole unpalatable mess must be tossed.

By 3.26.12

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Two years ago, when the chefs of the Democrat party emerged from the legislative kitchen with that noisome combination of noxious ingredients ironically titled the "Affordable Care Act," they made it clear that it was meant to be served prix fixe. And, when the Republicans and a large percentage of voters recoiled at some of the offered fare, the offended congressional cooks haughtily informed us that we were getting a set menu. They were particularly intransigent on the subject of the individual mandate. No matter how many times we expressed our displeasure with that disgusting course, in public demonstrations and at the ballot box, they insisted it was absolutely essential to the table d'hôte.

We were further assured that a true appreciation of Obamacare and its mandate would come with time. It was an acquired taste, they told us, that we would eventually learn to love. Much to the chagrin of congressional Democrats and the White House, however, the mandate has instead turned out to be something of an emetic. It proved so nauseating to the electorate that the Democrats were hurled from their recently reacquired House majority in November of 2010, and it could cause "reform" to be regurgitated from our body of laws by the Supreme Court this summer. The chances that the Court can stomach the mandate are not good and, if that pungent provision is essential, the whole nauseating mess must be tossed.

Strangely, however, the very people who have for two years insisted that the mandate was the essential ingredient that made Obamacare palatable have changed their minds. They claim to have reexamined the recipe and discovered a way serve ACA à la carte. The government lawyers tasked with defending Obamacare have filed a brief with the Court saying the law can still work in the absence of the mandate. They now claim it can be safely severed if a couple of other provisions are also removed. Specifically, only the guaranteed issue and community rating provisions are not severable from the mandate according to the latest fallback position adopted by the Department of Justice.

The DOJ is not alone in its sudden discovery that the law will work without the mandate. Most of Obamacare's advocates have had similar epiphanies. And, to justify their brazen flip-flops, many have twisted themselves into interesting rhetorical knots. Doctors Samuel Sessions and Allan Detsky, for example, offer this hilarious analysis: "Arguing that the mandate is constitutional under the Commerce Clause requires taking the position that it is 'essential' to the statutory scheme, whereas arguing that it is severable dictates the seemingly opposite position that the ACA is 'capable of functioning without it.' Politically, making both arguments may be awkward.… Legally, however, the positions are consistent."

These cynical sawbones argue that the mandate is "completely severable," and that its removal doesn't even require the extractions proposed by the DOJ. This is nonsense, of course. As virtually all of Obamacare's proponents insisted before they realized there was a real chance the Court would strike it down, the mandate is such an integral component of ACA that "reform" cannot be digested without it. This is certainly the position the Democrats took when they rammed the law down our throats. As Mario Loyola, Richard Epstein, and Ilya Shapiro put it in the American Interest, "It was for that reason that the law's proponents rejected every effort to remove the mandate from the law in committee vote after committee vote."

Loyola, Epstein, and Shapiro, who have filed an amicus curiae brief with the Supreme Court in the ObamaCare case, write that even removal of the guaranteed issue and community rating provisions from the law will not justify severing the mandate. They hold that the "minimum coverage provision," as ACA's advocates refer to it, is inextricably connected to the law's so-called insurance reforms, Medicaid expansion, and premium subsidies. "The better the Court understands the vital interrelation of those provisions with the mandate in the original legislative design, the clearer it will be that these core provisions are wholly interwoven with the mandate and must be struck down with it."

They ominously add that "implementing those other core provisions without the mandate is likely to result in a financial meltdown. The reason lies in the unyielding economics of health insurance." Essentially, the law's various provisions remove all incentives for healthy people to purchase coverage and make it illegal for insurance companies to refuse coverage to the seriously ill. Without the individual mandate, therefore, this will lead to an "adverse selection spiral" that will cause the health insurance industry to implode: "In the end, the only people who enroll are those with known medical conditions, such that premiums approach the actual cost of health care, and the insurance industry collapses."

This is by no means a conjectural argument. Experiments with similarly designed health care "reform" laws have been conducted in a variety of states, including New Hampshire, Kentucky, Vermont, Washington, New Jersey, Maine, New , and Massachusetts. The last, like all the rest, has failed even with a mandate that was meant to deal with adverse selection problem. It simply isn't possible to alter the laws of economics with state or federal legislation. It is possible, however, to make a bad law even worse. And that is what will happen if the Supreme Court attempts to convert the table d'hôte cooked up by Congress into an à la carte menu. As its proponents told us when they force fed Obamacare to us in 2010, it is a set menu.

The Court will hear oral arguments pursuant to severability on Wednesday, and the opponents of Obamacare will have exactly thirty minutes to convince the justices that the original position of Congress was that Obamacare was meant to be served prix fixe. If the Supremes find the individual mandate unpalatable, the Constitution, the laws of economics and plain common sense demand that they send whole inedible mess back to the Kitchen.

 

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About the Author

David Catron is a health care revenue cycle expert who has spent more than twenty years working for and consulting with hospitals and medical practices. He has an MBA from the University of Georgia and blogs at Health Care BS.