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Will challenge to individual mandate actually succeed?
Efforts to eliminate the individual mandate requiring individuals to purchase health care insurance, included in the Patient Protection and Affordable Care Act (PPACA), "have a probability of success," according to Leslie Hendrickson, PhD, principal of Hendrickson Development, an East Windsor, NJ-based consulting group which helps to develop and strengthen long-term care programs.
"It seems to me what we are looking at right now in the country is a re-emergence of the concept of nullification," he says. This is a states' rights doctrine dating back to 1798, says Dr. Hendrickson, which holds that states don't have to comply with a requirement of the federal government if they don't agree with it.
This legal doctrine, explains Dr. Hendrickson, "usually gets shot down by the Supreme Court when it invokes the supremacy clause of the federal government." However, he says, legal challenges to the individual mandate appear to be on firmer ground.
He notes that U.S. District Judge Roger Vinson's January 2011 ruling that the health law is unconstitutional reviewed the history of the Commerce Clause. "This is the justification for the federal government's authority to direct individuals to purchase health insurance," he says. Administration lawyers argued in the Florida case that the government can tax individuals for not buying health insurance, says Dr. Hendrickson, because individuals are not buying health insurance in an activity involving interstate commerce. "The district courts are split on it," he says. "I am not a lawyer, but I think it's a stretch to argue that the Commerce Clause can be used to compel persons to buy health insurance."
In addition, the individual mandate goes against a deeply held principle of individual choice in Medicare, says Dr. Hendrickson. "Unlike Medicaid, if you are a Medicare beneficiary you cannot be forced to go into a managed care plan. And if you choose to go into the managed care plan, you have freedom of choice of plans," he says.
Dr. Hendrickson points to the Real ID Act of 2005 as an example of states not cooperating with a federal law en masse. This was a homeland security measure that had the practical effect of creating a national identity card, he explains.
"Nobody went along with it," says Dr. Hendrickson. "The opposition extended from the Northeast states that opposed it because of a classic liberal Democratic viewpoint to the Rocky Mountain states that were opposed because of a classic Republican libertarian viewpoint."
The end result, says Dr. Hendrickson, was that not a single state did anything to comply with the federally passed law. Similarly, he says, states may choose not to create the Health Insurance Exchanges required in the PPACA, and let the federal government create them.
If it a single state fails to comply, says Dr. Hendrickson, then the federal government has more leverage in "corralling that state and cajoling that state into taking action lots of audits, denials of state plan amendments, Department of Justice investigations, and withholding funds. But I can easily see 10 states basically dragging their feet and doing nothing about this. I don't think there is much the feds can do about that."
There are still many implementation regulations that have yet to be promulgated, notes Dr. Hendrickson. "Over the next couple of years, there could well be thousands of pages of regulations issued implementing this," he says. "It is a large, complicated, multiyear process."
However, Dr. Hendrickson says that looking forward, he expects that millions of currently uninsured Americans will have health insurance as a result of the PPACA.
"States will not all cooperate and there will be a lot of issues, but I think they will be negotiated and worked out," he says. "There will be large numbers of states that seize on the federal funds as an opportunity to provide health insurance."
"Wait and see" approach
Georgia is one of the states that joined in the lawsuit against the PPACA, notes Mark Trail, managing principal at Health Management Associates in Atlanta, but at the same time, the executive branch is preparing for the law's implementation.
"They're going to seek to get some improvements in some of the requirements if it doesn't run off the tracks," he says. "But I don't think it's going to be sitting back, folding your arms and saying, 'Make me.'"
Mr. Trail adds that some states are holding off on taking specific steps to implement the law. "You've got those in the legislature that say 'Don't do anything to make this easier,'" he says. "However, that is not the approach that the executive branch is taking. They are saying, 'This is the law. We don't like it, but in the meantime we're going to get prepared.'"
Those with the "wait and see" attitude, says Mr. Trail, are waiting for the Supreme Court consideration of the lower court's decision. "That is what I think they are hanging their hat on," he says. "As for whether that turns out to be a good or bad idea, I guess time will tell."
Mr. Trail notes that even the Florida decision acknowledged that the federal government has the right to compel a state to expand its Medicaid eligibility. "I don't think there are any states that are hanging their hats on that particular point," he says. "I am not aware of any state thinking that somehow that they are going to win a battle to prevent that from happening through the courts."
The individual mandate is another matter altogether, adds Mr. Trail. "Maybe they are hoping that the individual mandate will not occur, if in fact there is severability in the law and they can just throw out part of it," he says.
There is some discussion about allowing states to offer a less expensive basic health plan to newly eligible individuals, adds Mr. Trail. "But from what I've seen, that doesn't apply to anything below 133% FPL. It applies to a narrow margin from 133% up to 200%," he says. For this reason, Mr. Trail explains, states realize they are not going to get relief in moving to the basic plan, at least not in how the law exists today.
"That doesn't mean, however, that they are not trying to pursue that through their own congressional delegation or something along those lines," he adds.