Health reform ruling one of many; should not affect implementation

Andrew Cannon, research associate
Andrew Cannon

Until this week, health reform had cleared a number hurdles. Federal district court judge Henry Hudson’s ruling Monday struck down the individual responsibility provision of the health reform law.

And though it was certainly disappointing news for supporters of the Patient Protection and Affordable Care Act and could have serious negative consequences if the decision is upheld by the Supreme Court, the ruling shouldn’t cause either reform supporters to despair or reform opponents to rejoice.

First, some perspective: the individual mandate has already faced three federal court challenges, including yesterday’s ruling. Judge Hudson’s ruling against the individual mandate is the only ruling to strike down any portion of the Affordable Care Act. Both earlier rulings found that individual mandate in particular and the entire health reform law fell within Congress’ constitutional powers under the Interstate Commerce clause.

The individual responsibility provision (Section 1501 of the Affordable Care Act) requires all individuals to purchase health insurance or face a tax penalty, with exceptions for those with religious convictions against health treatment and individuals facing extreme financial hardship. In order to prevent insurance companies from denying coverage to sick individuals or excluding preexisting conditions from coverage, a requirement that all individuals have insurance had to be included. Without such a provision, there would be a serious temptation for individuals to “game the system” — avoid purchasing insurance until they got sick.

But the other reason that this ruling is not as bad as it’s been made to sound, and in fact has some positives for health reform supporters, is that it struck down just that one provision of the law. Though Judge Hudson ruled that the individual responsibility provision was a constitutional overreach by Congress, he stated that the rest of the law falls within Congress’ constitutional purview. Virginia’s Attorney General, Kenneth Cuccinelli, requested that Judge Hudson halt the implementation of the law. Judge Hudson denied that request.

Lawmakers can (and should) continue to work toward the law’s full implementation, even in light of Judge Hudson’s ruling. The constitutionality of health insurance exchanges and the expansion of Medicaid are not in question.

This is just one ruling of three thus far, and undoubtedly more to come. When the legal wrangling is settled, we’ll know whether or not the individual responsibility requirement — and the tighter insurance regulations that rely on it — remains a workable part of the law. If the provision is found to be unconstitutional, there are workable solutions that would keep the insurance regulations in place and replicate the effects of an individual responsibility requirement. Until then, however, policymakers should continue their implementation efforts.

Posted by Andrew Cannon, Research Associate

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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