Editor’s note: This is the second of two California Healthline stories examining health care cases before the Supreme Court. The first story, about the Supreme Court’s ruling last month in a California Medicaid case, posted Monday.
The sky is not falling, according to Peter Lee, executive director of the California Health Benefit Exchange board.
The Supreme Court is taking up a case this month that, among other things, challenges Congress’ right to impose an individual mandate in the Patient Protection and Affordable Care Act. Justices later this month will hear six hours of oral arguments over three days — the most time allotted for a case in 56 years. A ruling is expected by the end of June.
The challenge to the individual mandate does not mean the ACA itself is on trial, Lee said.
“Well, there are certainly 800 versions of ‘what if?’ out there, and people are asking what it will mean. But the financing of the Affordable Care Act is not being challenged in the Supreme Court,” Lee said. “You have to understand, the issues are different. The expansion of coverage with the ACA has many layers. It is not a simple question of one or the other — ACA or no ACA.”
No matter what decision is reached by the Supreme Court, the California exchange will continue its work, Lee said. California’s other health care reform plans will continue and the exchange will still apply for a Level II implementation grant in June, as planned. “Any vision of the future that I can see includes the exchange,” Lee said. “That’s clear to me. And any vision of the future includes the work California has been doing on reform, to expand coverage to millions of Californians, starting in 2014.”
Elephant in the Room
Officially, it’s the Department of Health and Human Services v. Florida. Unofficially, it’s a referendum on federal health care reform policy.
Here’s how the six hours of argument — set for March 26 through March 28 — are expected to go:
- About two hours has been set aside to hear the main event: whether Congress has the authority to create an individual mandate requiring most people to obtain health insurance or pay a penalty, beginning in 2014;
- Another 90 minutes will focus on whether the rest of the law can remain in place if the individual mandate is struck down;
- One hour will be devoted to the ACA’s expansion of the Medicaid program; and
- About 90 minutes has been set aside to discuss whether a federal law that requires taxes to be paid before they’re challenged might apply.
Those arguments, the continuing political wrangling over the ACA and the looming Supreme Court ruling have been the elephant in the room as California policymakers worked on a rapid timeline to implement health care reform.
The $390 billion, 24,000-pound question (estimated cost of ACA and weight of a big African elephant) is:
If the Supreme Court strikes down the ACA altogether, has the mountain of work California started or already completed on health care reform all been in vain? Could California’s health care reform effort just stop in its tracks?
California Could Create Its Own Mandate
If the Supreme Court overturns the ACA’s individual mandate, it would mean very little to California, according to Lucien Wulsin, executive director of California’s Insure the Uninsured Project.
“The case at the Supreme Court level is that Congress doesn’t have the authority to require an individual mandate, but that doesn’t apply to the states,” Wulsin said.
Even if federal authority to mandate individual coverage is struck down, Wulsin said, there is nothing to stop states from having their own individual mandates.
“It’s not about whether the mandate is unconstitutional,” Wulsin said. “It’s about whether Congress has the authority to impose that on all of the states.”
So the states, he said, still could pursue the individual mandate if they choose. “If I was [in] the California Legislature, and we thought the ACA was pretty good, so we decide we’re going to have a state mandate to help pay for premiums and keep cost to the state down, that would work,” Wulsin said.
“It does scramble things a bit, but you can’t look at it as if it’s dead,” he added.
There are certainly ways to run the exchange without an individual mandate, Lee said.
“The exchange will be a key vehicle, and it’s not reliant on the mandate,” Lee said. “It’s designed for so many other things, for Medi-Cal expansion, for instance, and to make coverage affordable for millions of Californians — those who are uninsured and more affordable for many who already have insurance. That’s a piece of the puzzle, just like the individual mandate is a piece of the puzzle.”
Without the individual mandate, the cost of premiums would rise, Wulsin said. “The cost of the uninsured would be higher for each individual for the federal government,” Wulsin said, “but fewer people would be getting insurance, so total spending doesn’t change that much.”
Several alternatives, such as auto-enrollment, have been proposed to replace the individual mandate, in the event the Supreme Court rules against it.
“It wouldn’t wipe out the ACA or the ability of the exchange to operate,” Wulsin said. “It could be a bit more expensive and somewhat less effective. But the ACA and the exchange would still operate just fine. That wouldn’t change.”
If the Supreme Court decides that Congress doesn’t have the authority to impose an individual mandate, it may also rule on whether the entire ACA would have to be struck down along with the mandate.
If the Supreme Court takes that extra step and eliminates the entire ACA, the health care reform effort in California is already so far along that it’s not really possible to just stop, Wulsin said. “Certainly, the funds already out there don’t get pulled back,” he said, adding that eliminating so much that has already been started is a dangerous proposition.
“What about the state [1115 Medicaid ] waiver?” Wulsin asked. “That depends on a specific provision of the ACA, so there is some question about whether the waiver might be at risk,” he said. “A lot of dominoes could fall.”
“I don’t even think the court will say the individual mandate is unconstitutional,” Wulsin said. “Obviously, nobody knows what the justices are going to do.”
Staying the Course
In the meantime, California is moving ahead to implement health care reform, Lee said.
“We’re assuming [the provisions of the ACA] will be upheld. The reality is that affordable coverage is right around the corner for millions of Californians, so this is being built, no matter what happens in the Supreme Court,” Lee said. “A lot of things have already been put in place.”
At this point, Lee said, it’s not about stopping. It’s more about course correction.
“It is misleading and not productive to look at all of the what-if’s,” Lee said. “There are some states that are standing on the sidelines [waiting to hear what the Supreme Court rules]. They’re standing on the sidelines trying to make this a political issue. In California, we want to rise above politics. We can’t let this be a political football. We can’t afford to stand on the sidelines.”
If the high court rules against the individual mandate, that’s just something to deal with, Lee said.
“The shape and speed and nature [of reform in California] may change,” Lee said. “We’ll have to see, how do we adjust course after that decision? But California will continue to address the needs of Californians.”