Judging The Health Care Law
5:16 pm
Sat March 31, 2012

The Individual Mandate's Growth In Unpopularity

Originally published on Sat March 31, 2012 7:08 pm

The U.S. Supreme Court heard arguments this week over key aspects of President Obama's health care law, including the expansion of Medicaid and whether the court even had the right to hear the case. But the core of the challenge mounted against the Affordable Care Act hinges upon its individual mandate, which requires almost every American to have or buy health insurance.

The idea of an individual mandate to control health care costs, however, is not new. It goes back to 1989 and a man named Mark Pauly. An expert on health care policy, Pauly was part of a group of academics brought to the White House by President George H.W. Bush.

The group's task was to fix health care; its solution was to let the marketplace solve it and create an individual mandate. Pauly tells weekends on All Things Considered host Guy Raz that, at the time, many Republicans, including the president, loved the idea.

"Legislation was drafted, but never made it as a bill because the word from the Democrats in Congress was [that] it would be dead on arrival," Pauly says.

Pauly says the reason the individual mandate is front and center in this debate is because opposition to it can be cast in the form of a constitutional challenge, unlike other parts of the law.

"To some extent, I'm a little surprised that this feature [that] we thought as kind of an afterthought has become so prominent," he says. "The current individual mandate, in my view, is kind of a puny thing because the penalties are relatively small."

In contrast, under the mandate Pauly's group proposed, failure to secure health insurance would result in a penalty equal to the premium for the cheapest qualified health coverage. Pauly says Americans would also automatically be assigned to a fallback insurer that the government contracted with.

"We thought then, and I think now, that it would be good to have a society in which everybody has at least some basic catastrophic insurance," he says.

Though what's being mandated in the current legislation is much more elaborate than what his group had in mind, Pauly says, it's "better than nothing, and we could work with it to fix it up."

More Than Just The Mandate

While Pauly's plan may have been dead on arrival in 1989, it did eventually make it to the Senate floor. The mandate was an idea proposed by Republicans as an alternative to President Bill Clinton's health care initiative in 1993.

At the time, newly elected Sen. Bob Bennett, a Republican from Utah, and about 20 other Republicans set out to offer an alternative plan to what they disparagingly called "Hillarycare," after then-first lady Hillary Clinton, who wrote the White House plan.

The plan's individual mandate was even supported by Republican leader Bob Dole. Back then, just two Democrats backed it.

Bennett tells Raz that the objection to the individual mandate did not arise until after Obama's legislation was written.

"Nobody was talking about it during the debate [in 1993]," Bennett says.

Though he helped create a plan that included an individual mandate, Bennett voted against the current legislation. He says there are many more problems with the bill, but that the individual mandate has emerged as the "litmus test" for whether it is good legislation.

"I'm not opposed to the individual mandate, but I still think the bill is a terrible piece of legislation," he says. "The accounting simply does not add up."

Sen. Harry Reid was under pressure from the White House to pass the bill, Bennett says, regardless of what it said. Bennett says if the law stands it will have a devastating effect on states and Medicare.

"Frankly, I never even thought about the individual mandate as I voted against [the bill]," he says.

Selling Obama's Health Plan

At the Supreme Court this week, some of the justices were tough on the administration's top lawyer, Donald Verrilli. It was Verrilli's job to defend the individual mandate, and some say he didn't do that great of a job.

For Reid Cherlin, this past week was a dose of deja vu. Cherlin was President Obama's chief spokesman on health care until March of last year. He didn't have to defend the law in front of the Supreme Court, but he tells Raz that doesn't mean his job was any easier.

"Answering questions about the bill, no matter what the questions are, is extremely difficult because it is so complicated," Cherlin says.

Cherlin says the problem is that the relationship between the American people and their health care coverage is tricky. He says the public generally doesn't like the system, is skeptical of the players and would rather not have to deal with it than have anything change.

"And the minute you say, 'Under Obamacare you'd have to do X, Y and Z,' no one wants to do anything with their health care," he says. "They just want it to be there and not get sick."

In a blog post for GQ Magazine, Cherlin posted some of the quotes he gave reporters about the law. He called them "torturous and horrible," including this one:

"The president has made it clear that health insurance reform legislation should prevent insurance companies from placing annual limits on health expenditures that can force families into financial ruin. We will continue to work with Congress on this policy."

It's that kind of language that has made it so hard to make the case for Obama's plan, Cherlin says. In hindsight, he says, the White House didn't do itself any favors.

"There are a lot of good things that it does, but for a bumper sticker or a 15-second blurb, basically you've got to pick one," he says. "There was a lot of disagreement ... so consequently, we were talking about different things at different times."

With all of those different messages floating around, Cherlin says, that might be why nothing seems to have stuck.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

GUY RAZ, HOST:

It's WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

At some point yesterday, the nine justices of the Supreme Court gathered in a conference room for a closed meeting. And according to protocol, Elena Kagan, the junior-most justice, manned the door. And one by one they spoke up, yes or no, whether to uphold or to overturn the Affordable Care Act, what's come to be known as Obamacare. And even though its fate may have already been decided, we won't find out until the ruling comes down, possibly in June.

Our cover story today, is the Obama health plan doomed? And if so, what happens next? At the Supreme Court this week, some of the justices were tough on the administrations top lawyer, Donald Verrilli, when it came to the issue of the individual mandate, the part of the law that will require almost every American to have health insurance.

JUSTICE ANTONIN SCALIA: Why aren't those problems that the federal government can address directly?

JUSTICE ANTHONY KENNEDY: Can you create commerce in order to regulate it?

SCALIA: If I'm in any market at all, my failure to purchase something in that market subjects me to regulation.

DON VERRILLI: No. That's not our position at all, Justice Scalia.

RAZ: It was a tensed day for Verrilli.

VERRILLI: Excuse me.

RAZ: To say the least.

JUSTICE STEPHEN BREYER: What's making you reluctant?

VERRILLI: I'm not trying to be reluctant. I understand how this works. I'm trying to be careful about...

RAZ: Now, despite the awkward moments, no one can say what the eventual outcome will be either way, including Reid Cherlin. For him, this past week was a dose of deja vu.

Reid, introduce yourself for us please.

REID CHERLIN: My name is Reid Cherlin. I was a spokesman at the White House from the day after Inauguration Day until March of last year.

RAZ: Reid Cherlin was the president's chief spokesman on health care. He didn't have to defend the law in front of the Supreme Court, but he says that didn't make his job any easier.

CHERLIN: Answering questions about the bill, no matter what the questions are, is extremely difficult because it's so complicated. The relationship of the American people to their health care coverage is just extremely tricky. They generally don't like the system. They are very skeptical of the players. But they would rather not have to deal with it than have anything change. And the minute you even say something like, you know, under Obamacare, you'd have to do X, Y and Z, no one wants to do anything with their health care. They just want it to be there, and they want to not get sick.

RAZ: A couple of days ago in a blog post for GQ magazine, Reid Cherlin posted some of the quotes he gave to reporters about the law, and he called them horrible and torturous.

I have a couple of them in front to me. Can you read? Can you read some of them?

CHERLIN: Sure.

(Reading) The president has made it clear that health insurance reform legislation should prevent insurance companies from placing annual limits on health expenditures that can force families into financial ruin. We will continue to work with Congress on this policy.

RAZ: Now, Reid Cherlin says it was that kind of language that made it so hard to make the case for the Obama plan. And in hindsight, he says the White House didn't do itself any favors.

CHERLIN: Originally, you know, particularly on the campaign, you want to talk about covering everyone. Then it was about cutting costs, and it's about cutting the deficit. There are a lot of good things that it does. But for a bumper sticker or for a 15-second blurb, basically you got to pick one. There was a lot of disagreement and evolution about which one we should be talking about. And so, consequently, probably nothing stuck.

RAZ: So, what did stick with Americans? To find out, we send producers out to three places this week - Roanoke, Virginia, Fort Myers, Florida and Huntersville, North Carolina, all battleground states this election year. And we asked this question: If the high court uphold the Affordable Care Act, how do you think it will affect you?

UNIDENTIFIED MAN #1: It's going to take away from our senior citizens to give to somebody else or half of these people are on drugs and whatnot, and I don't want to be paying for them.

UNIDENTIFIED MAN #2: I don't believe in a government that tells me I should buy insurance or I have to buy insurance. I think the government's got too damn much control over what we're doing right now.

UNIDENTIFIED MAN #3: I think the idea behind it is a good idea. I'm still on my parents' plan since I'm 24, and I can stay on that until I'm 26 now.

UNIDENTIFIED WOMAN #1: And they are trying to cut back on to insurance, and I don't think that's fair because there's a lot of elderly people that need it.

UNIDENTIFIED MAN #4: When they have a 2,000-page bill and they pass it without reading it, I think that's ludicrous.

UNIDENTIFIED WOMAN #2: I mean, I think the government is just making way too many decisions for us as American citizens.

UNIDENTIFIED WOMAN #3: It's really hard to pay for it otherwise, and it's a basic right for all of us to be capable of being well. So I think it's a great idea.

UNIDENTIFIED MAN #5: You know, (unintelligible). And I don't want to be paying - you got to help yourself up. Everybody got to do their part.

UNIDENTIFIED MAN #6: It should not be mandatory to make someone buy health insurance if they can pay their own bills.

UNIDENTIFIED WOMAN #4: It scares me to think that I will have to buy a certain type of insurance from the government and that my coverage will be as they deem it to be.

UNIDENTIFIED MAN #7: Do you have health insurance now?

UNIDENTIFIED WOMAN #4: Yes.

RAZ: Now, some of what you heard is accurate and some isn't. And every single person you just heard, by the way, told us they already have health insurance either through Medicare, Medicaid and employer plan, a private plan. And so, it's unlikely the Affordable Care Act would affect any of them. But given that everyone in America will be required to have health insurance, how many people will have to buy it?

Here's NPR health policy correspondent Julie Rovner.

JULIE ROVNER, BYLINE: The short answer is a whole lot fewer than may think so. And it is not to suggest that people don't have a legitimate right to be worried about government intrusion into the health care system. But the best way to think about it is think about the people who are not affected. Almost every senior has Medicare. Poor people have Medicaid. And under this law, a lot more low income people will have Medicaid.

If you get insurance at work, you will not be affected by this. And there are provisions to make sure your employer does not drop that. By the time all is said and done, we're talking about 18 million people who would be required to go out and get insurance. Of those 18 million people, about 11 million would then have subsidies, would be given money by the government to help them pay for it. So, in the end, we're talking of 300 million some Americans, we're talking about seven million who would have to go out on their own dime and have to buy insurance.

RAZ: OK. Let's talk about the possible scenarios. If the Supreme Court, say, strikes down just the individual mandate part of the Affordable Care Act, what happens then? Does the whole thing fall apart?

ROVNER: Well, if they were to strike down the mandate alone, which is what one of the appeals courts did, that would be a big problem for the insurance industry if they still had to go out and sell to people with pre-existing conditions.

RAZ: Right, because their argument is the only way to make it affordable is that if everybody has to buy it.

ROVNER: Right. Now, if they were to do what the government asks and strike down the individual mandate and the requirement to sell to people with pre-existing conditions at those prices, there are ways to get around that. There are other things you could do. Medicare, for instance, says, if you don't sign up right away for the voluntary part, you would have to pay more later. That's one possibility. So, it depends how they would strike it down.

RAZ: Let's talk about the overall law. If the whole thing is thrown out, is overturned by the Supreme Court, what then?

ROVNER: I talked to a number of lawyers this week and their responses have ranged from bedlam to chaos. Even people who would like for the court to do that have suggested there would be some dislocation. Remember you've got hundreds of thousands of small businesses who are already getting tax credits, who got two and a half million young people who are staying on their parent's health plans. You've got 50,000 people on these new temporary plans for people with pre-existing conditions. Most of that stuff would stop.

How long it would take for some of the funding to shut off is a question that we will have to see. Remember, the court has not overturned a law of this magnitude in 75 years, not since the New Deal. So, this is really unchartered territory we're talking about.

RAZ: Does the White House have a plan B in place if this is thrown out?

ROVNER: The White House insists that it doesn't. There are people on Capitol Hill who are talking about a plan B. But Congress can't get anything done certainly this year. If they would have to come back and do something else, it would be next year at the Senate.

RAZ: That's NPR health policy correspondent Julie Rovner.

Now, the idea of an individual mandate to control health care costs isn't new. In fact, it goes back to 1989. Mark Pauly, an expert on health care policy, was part of a group of academics brought to the White House by President George H.W. Bush.

Their task: Fix health care. And their solution: Let the marketplace solve it. Make everyone buy insurance on the open market. And at the time, many Republicans loved it, including the president. So, the White House decided to take it to Congress.

MARK PAULY: Legislation was drafted but never made it as a bill because the word from the Democrats in Congress was it would be dead on arrival.

RAZ: Dead on arrival.

PAULY: Correct.

RAZ: Was your plan popular with Republicans at the time?

PAULY: As far as I know, it was. There's certainly a lot of interest in it and because, I guess, it captured the idea of limiting government helping those who need help and not having it interfere with decisions of people who could afford adequate insurance coverage on their own.

RAZ: Effectively, what you proposed back in 1989 was an individual mandate. It was somewhat different than the one that Democrats have passed with the Affordable Care Act, but that is the dividing line now. That is what opponents really object to the individual mandate. They probably would have objected to your plan if it was passed, don't you think?

PAULY: Maybe so. Although I think the reason that the individual mandate has come front and center is because it's an objection that can be cast in the form of a constitutional challenge. So, to some extent, I'm a little surprised that this feature, which we thought is kind of an afterthought, has become so prominent. But the current individual mandate, in my view, is kind of a puny thing because the penalties are relatively small compared to the premium you'd have to pay if you bought the minimum qualified coverage.

RAZ: Although that does go up - the penalty does go up every year.

PAULY: But even so, the maximum is about $2,000. But our mandate was much stronger. It basically said if you didn't show that you'd arrange coverage, which met at least this minimum, you'd pay a penalty equal to the premium for the cheapest qualified coverage, and you'd automatically be assigned to a fallback insurer that the government would contract with.

RAZ: So your plan sounds like it would have been a real lightning rod today, I mean, if your enforcement standards were even stricter than the one proposed by the Democrats.

PAULY: While I accept that your insurance that you had to buy was a lot cheaper than what's being mandated under the current legislation as much more elaborate than what we had in mind. I think the controversy over the contraception and inclusion of that is a kind of example of the sort of thing that's different now than it would have been under our arrangement.

RAZ: So, should I assume that you oppose the health care law that was passed by Democrats two years ago?

PAULY: My own personal view is it's better than nothing, and we could work with it to fix it up. But the fundamental contours of the subsidy part of it are obviously something I'm very much in favor of.

RAZ: Mark Pauly, known as the intellectual father of the individual mandate. Now, while his plan may have been dead on arrival in 1989, it did eventually make it to the Senate floor in the form of a bill, an idea proposed by Republicans as an alternative to President Bill Clinton's health care plan. And in a moment, we'll speak with one of those Republicans who co-sponsored the bill, former Utah Senator Bob Bennett.

That's coming up on ALL THINGS CONSIDERED from NPR News. Transcript provided by NPR, Copyright NPR.