With the Supreme Court not set to deliver its ruling on the constitutionality of the Affordable Care Act (ACA) until June, pundits and politicians on both sides have worked furiously to square any potential result against the political impact it could have in November.  A recent Gallop poll found that an astounding 72 percent of respondents thought the individual mandate in the law is unconstitutional, and a poll released last week showed the bill was popular with only 36 percent of those surveyed.  The oral arguments before the court have only served to make the law even less popular in the public imagination.

The controversial individual mandate is just one piece of the new health care law enacted in 2010. Take away the mandate, and we’re left with two principal elements.  The first is a huge expansion on the Medicaid program.  The majority of those who’d gain health coverage under the new health care law, an estimated 18 million people, would gain it from being enrolled in Medicaid, the health care program for the poor. Even before the new health care law, Medicaid was a huge program, covering one in six Americans. It’s on its way to becoming bigger still, whatever happens to the individual mandate.

The second principal is tough rules on insurance companies.  The new health care law forbids insurers to refuse coverage on the basis of “pre-existing conditions.” All applicants must be accepted, and they must be covered at the same price as the other members of the insured group.

The biggest fear if the mandate is struck down without a plausible solution is an entire collapse of the insurance market.  Insurance companies would be faced with big new costs and deprived of their expected new revenues from the mandate, will have to raise prices. Faced with rising prices, employers will cut back coverage.

The 2010 law imposes new obligations on employers to provide health insurance but also presents employers with an option to escape those obligations by paying a small fine. As insurance costs surge in a post-mandate world, more employers will take advantage of that option. Their employees will join the new market for individual care, the famous health care “exchanges.”

Without the mandate, the policies on offer in the exchanges will be unexpectedly expensive and many individuals will choose not to buy. The law offers subsidies to buyers who cannot afford the full cost of the new policies. Without the mandate, those subsidies will cost much more than expected.

So while America awaits the Supreme Court ruling, one thing is certain.  If the mandate is deemed unconstitutional, an alternative must be found in order for Obamacare to work. 

 

 

 

 

 

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