Hot Topic: Supreme Court Upholds Health Care Law and the Individual Mandate

The Supreme Court upheld the core of President Obama’s health care overhaul today ruling that the government can require all Americans to obtain health insurance or pay a penalty. The decision is an affirmation of the president’s signature legislative achievement and should bring the country closer to providing coverage for all its residents.  Joel C. Cantor, director of Rutgers’ Center for State Health Policy, and Rutgers-Newark law professor Christina Ho, a former Clinton health policy expert, explain the significance of today’s decision, and what it could mean for individuals as well as the continuing debate over health care.  

Rutgers Today: Can you explain the decision, which components of the law were upheld and what the basis was for the ruling?

Cantor: All of the coverage provisions of the Affordable Health Care Act were upheld, including the “minimum coverage requirement” (also known as the individual mandate) and the Medicaid expansion.  The mandate, which requires nearly all Americans to obtain insurance or pay a penalty, was upheld under Congress’s taxing authority in the constitution. The Medicaid expansion was deemed within Congress’s power to apply conditions to funds it gives to states.  The court did limit the extent to which the federal government can sanction states that do not expand Medicaid eligibility.  Specifically, the federal government cannot cut off all Medicaid funding to a non-complying state.  The federal government has never cut off a state and it is exceedingly unlikely that it ever would, so the court’s ruling is largely symbolic..

Ho: The decision was a surprise because lower courts that had upheld the individual mandate did so under Congress’s authority to regulate commerce and its authority under the ‘necessary and proper’ clause that allows Congress to take the actions necessary to carry out its powers. It was a surprise because no lower court had recognized Congress’s taxing authority to uphold the mandate.

Rutgers Today: Gov. Christie had vetoed a bill to set up health care exchanges that would establish a marketplace for individuals and small business to obtain insurance with a tax credit from the federal government, which is required under the law. What has to happen now in New Jersey?  

Cantor: In his veto message, Gov. Christie clearly stated that if the law were upheld, New Jersey would move forward to implement its responsibilities under the law.  He may elect to negotiate with the Legislature to come to a meeting of the minds on the design of a New Jersey exchange or he could issue an executive order creating the exchange. He has not signaled what direction he would prefer.  

Ho: With the constitutionality of the mandate resolved, we should call on Gov. Christie to get to work on implementing the steps necessary for New Jerseyans to get coverage under the health reform. 

Rutgers Today: What are the main components of the law? And how many people will it affect?

Cantor: We estimate that in 2014 about 444,000 uninsured in New Jersey will gain health insurance because of the Affordable Care Act.  This includes about 234,000 enrolling in Medicaid and the remainder enrolling in private plans.  Those that are of modest means will be eligible for tax credits to help them pay for their coverage.   The law also allows young adults up to age 26 to enroll in a parent’s health plan; helps pay for prescription drugs for Medicare beneficiaries in the so-called “doughnut hole”; requires insurance plans to pay for certain preventive services, with no cost sharing; guarantees that people can get coverage regardless of pre-existing conditions; and addresses health-care quality and costs in various ways.

Rutgers Today: Can you explain the significance of the provisions in the ruling that pertain to Medicaid?

Cantor: The Medicaid expansion will cover about 16 million very low-income adults nationwide (about a quarter million in NJ).  In spite of being very poor, Medicaid before the Affordable Health Care Act, typically did not cover adults without children unless they are disabled so this is a very significant expansion of the American health care safety net.  

Ho: This is my preliminary read. I don’t know if someone is going to come along and say we are going to find some way to salvage this, but I think there is a danger that a group of people who were intended to be covered under the law might not be able to get coverage. The court said that Congress couldn’t condition all of a state’s Medicaid funds on the addition of newly eligible individuals. The decision today allows states to essentially choose not to cover some of the people the law intended to cover. There could be problems in states that elect not to cover these newly eligible individuals because those low- income residents might not be eligible for other help under the Affordable Care Act, such as the subsidies for purchasing coverage on the exchange

Rutgers Today: Does this mean the legislation is secure? Is it still vulnerable to appeal or to be unfunded by Republicans in Congress?

Cantor: This legal challenge was probably the best opportunity for the law’s opponents to undo the reform law, but there will be continuing attempts to repeal it and challenge it in court.  Dismantling the law will be difficult, however.  Many parts of the law are very popular, including dependent coverage of young adults, prescription drug coverage for seniors, and even the Medicaid eligibility expansion.  Moreover, insurance companies, hospitals and other stakeholders are powerful forces to uphold the law, and these groups have considerable influence with both political parties. 

Ho: I don’t think that this is the last we will hear from the opponents of health reform. Republican leaders in the house are still vowing to repeal and they will continue to undertake efforts to defund or undermine implementation going forward and there are other lawsuits challenging the law.

Rutgers Today: What do you see as the future for the law? Do you think it will eventually become highly popular like other social safety net programs?

Cantor: The mandate to buy coverage will probably always be unpopular; but after it is implemented in 2014, most people will realize that it has no practical impact on them and I believe opposition will ease.  For example, about two-thirds of Americans have job-based coverage, so they will meet the coverage requirement without having to do anything.  Eventually the mandate will become like tobacco taxes – many smokers oppose them but others either support them or have no opinion.  Some very complex parts of the law, such as tax credits for private health insurance, should become more popular as people come to understand how they work.

 Ho: I think our national conversation on the health system is ongoing, and should be ongoing.  The health reform law, at least for now, is not going to be prematurely undermined before we’ve had a chance to see how it works.  Leaving the Affordable Care Act intact gives us a broad platform to have that conversation. Now we can decide we don’t like this or that aspect of it, but there is a platform to make changes. That was the thing that we formerly lacked.