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The Individual Mandate: A PubHub Reading List

April 06, 2012

(Kyoko Uchida manages PubHub, the Foundation Center's online catalog of foundation-sponsored publications. In her previous post, she highlighted reports about efforts to improve access to clean water, sanitation, and hygiene in the developing world.)

Last week, the Supreme Court heard arguments with respect to the constitutionality of the Affordable Care Act's so-called "individual mandate." But how much of the debate did you really understand? Framed by the media as a choice between the power of the federal government to coerce individuals to purchase something they may not want and the significant costs associated with "free-riding" in the healthcare system, the debate tends to give short shrift to the nuances and complexities of the legislation and existing legal precedent. (To cite one example: a March 2011 Kaiser Health Tracking Poll found that "opposition [to the legislation] falls markedly when people are told that the mandate will not change the existing health care arrangements of most Americans.") With that in mind, this week we're taking a closer look at a couple of reports that address some of the issues and legal questions raised by the individual mandate.

Urban_mandateperspectiveAccording to The Individual Mandate in Perspective (3 pages, PDF), a new issue brief from the Urban Institute, "if the ACA were in effect today, 94 percent of the total population (93 percent of the non-elderly population) or 250.3 million people out of 268.8 million non-elderly people — would not face a requirement to newly purchase insurance or pay a fine." That's because 33 percent of those under age 65 are exempt from the requirement due to income level, while of those who are not exempt, 86 percent will keep the employer-sponsored, nongroup, or public insurance coverage they already have.

So if the vast majority of Americans are exempted from the requirement or will remain covered under their existing plans, who is subject to the mandate? According to the report, roughly

26.3 million Americans who are currently uninsured will be required to newly obtain coverage or pay a fine. In this group, 8.1 million people will be eligible to receive free or close-to-free insurance through Medicaid or CHIP and can avoid the mandate penalties if they do so; hence our finding that 18.2 million Americans (6 percent of the total population, 7 percent of the non-elderly population) will be required to newly purchase coverage or face a penalty. Of that 18.2 million, 10.9 million people will be eligible to receive subsidies toward private insurance premiums in the newly established health insurance exchanges, but will have to make partial contributions toward their coverage. About 7.3 million people -- 2 percent of the total population (3 percent of the population under age 65) -- are not offered any financial assistance under the ACA and will be subject to penalties if they do not obtain coverage....

Funded by the Robert Wood Johnson Foundation, the issue brief also notes that by keeping currently insured healthy individuals in nongroup and small group markets and attracting newly eligible healthy individuals, the mandate will help to stabilize premiums.

Bna_evidentiaryWhat, then, is the legal basis for challenging the constitutionality of the individual mandate? According to Examining the Evidentiary Basis of Congress's Commerce Clause Power to Address Individuals' Health Insurance Status (21 pages, PDF), a report from the Bureau of National Affairs that also was funded by RWJF, the question is whether the Commerce Clause of the Constitution gives Congress "the constitutional power to apply a 'minimum essential coverage requirement' on most non-elderly Americans." In other words, does "being uninsured [amount] to an activity that substantially affects interstate commerce"? Congressional findings with respect to the relationship between the individual mandate and interstate commerce are based on a wealth of evidence, the report notes:

Evidence amassed and analyzed by health services researchers sheds considerable light on the economic spillover effects of being uninsured, not only on individuals and their families, but more importantly in the context of the minimum essential coverage requirement, on community and regional health care systems and the economy as a whole....

The Courts of Appeal for the Sixth and D.C. circuits both upheld the constitutionality of the requirement, and in doing so considered that:

Virtually everyone participates in the market for health care delivery and they finance these services by either purchasing an insurance policy or by self-insuring....Thus, set against the Act’s broader statutory scheme, the minimum coverage provision reveals itself as a regulation of the activity of participating in the national market for health care delivery and specifically, the activity of self-insuring for the cost of these services....

In contrast, the Eleventh Circuit Court of Appeals, which has jurisdiction over Alabama, Georgia and Florida, focused narrowly on the requirement that individuals enter the health insurance market and rejected any link between the requirement and an individual's activity in the broader economy:

Because the Supreme Court's prior Commerce Clause cases all deal with already-existing activity -- not the mere possibility of future activity (in this case, health care consumption) that could implicate interstate commerce -- the Court never had to address any temporal aspects of congressional regulation. However, the premise of the government’s position that most people will, at some point in the future, consume health care -- reveals that the individual mandate is even further removed from traditional exercises of Congress’s commerce powers....

The Supreme Court's decision, expected in June, will depend in part on how the court frames the problem the Affordable Care Act is intended to solve, the report concludes. How Justice Antonin Scalia's framing of the "broccoli question" during oral arguments ("Everybody has to buy food sooner or later, so you define the market as food. Therefore, everybody is in the market. Therefore, you can make people buy broccoli") plays out in terms of the final ruling, on the other hand, is anybody's guess.

Interested in learning more about the individual mandate provision? Check out these reports, all of which can be found in PubHub:

And feel free to use the comments section to share other reports of interest on the topic, as well as your thoughts about the mandate and the upcoming Supreme Court decision.

-- Kyoko Uchida

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