Three Reasons To Worry About The Virginia Decision

Fallout from a judge's ruling that part of the national health law is unconstitutional

Ok, so this morning, to calm health reformers, I linked to a piece in The Atlantic called “Why The Health Care Ruling Doesn’t Worry Me.”

This afternoon, however, I spoke with Michael Doonan, an assistant professor of health policy at Brandeis, who says reformers, in fact, have a lot to worry about. Here are his top three concerns about the national health reform law following yesterday’s Virginia decision that the insurance mandate is unconstitutional.
1. Implementation Slow-Down

Even if ultimately found constitutional, the immediate danger for supporters of reform is that the decision will slow state implementation.  And it is not like the states are going gangbusters. Twenty states have brought suit against the individual mandate. In the most recent elections 11 governorships switched from Democrats to Republican governors.  In 29 states Republicans — most of whom oppose or ran against reform — are now responsible for implementation. How enthusiastically do you think they are the preparing for reform? The Virginia decision and media coverage add an element of doubt and bolster those who want to roll back or put the breaks on reform.  This decision will provide further “evidence” for these unenthusiastic states to sit on their hands.

2. Without The Mandate, Things Fall Apart

While the Obama Administration is confident that they will ultimately win this fight, they also declare that things like the Medicaid expansions and tax subsidies are not contingent on the individual mandate.  Actually these expansions are far less valuable without a mandate. It is widely understood that without the individual mandate, we can forget about insurance reforms such as banning pre-existing condition exclusions, guarantee issue, and modified community rating which spreads health risk and costs across broader populations. But national reform absent a mandate will cover but a fraction of the 32 million estimated by CBO. It will cease to be national reform.

3. Don’t Forget Massachusetts

Remember back to the beginnings of Massachusetts reform and the Urban Institute/Blue Cross Blue Shield of Massachusetts Foundation report stating (and I am paraphrasing) “if you don’t have an individual coverage mandate you can’t get to universal coverage or even close.”  The Massachusetts experience bears this out. Vermont and Maine expanded subsidies and created new government programs, but guess what? Very few people enrolled. States have also tried Medicaid and State Children’s Health Insurance (CHIP) buy-in programs with subsidies similar to what will be available in the new health exchanges. Again very few people enrolled.

The Virginia decision is a paper cut to national reform, but this won’t stop opponents from crying ouch and using this to slow implementation. This is a real problem. In the long-term the Supreme Court will rule and the robed ones will decide the fate of the individual mandate and with it the success of national reform.

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