How healthcare reform could survive the Supreme Court striking down the individual mandate
It’s not unimaginable that Anthony Kennedy will end up joining with the four Democratic appointees on the Supreme Court to uphold President Obama’s healthcare law. The decision figures to come either today or Thursday, and if it goes the White House’s way, Democrats will be committed to preserving and strengthening the law for as long as Obama is president, at least.
By the same token, if the court declares the entire law invalid, then Democrats will be forced to return to the healthcare drawing board, with a (very) long-term Medicare-for-all push the most likely path forward for the party.
What’s a mystery is where Democrats will go if the court strikes down the individual mandate but leaves the rest of the law intact. If there were a betting line on what the Supreme Court will do, this outcome would probably be the favorite.
Conventional wisdom holds that the law is as good as dead even if only the mandate is affected. After all, the whole point of the mandate is to make it affordable for insurance companies to offer coverage to everyone regardless of factors like preexisting conditions. With a mandate, young and healthy customers would be forced into the risk pool, offsetting the losses insurers would incur picking up the tab for expensive treatments for the sick. Without a mandate, there’d be nothing to prevent healthy consumers from holding out until they need coverage, taking advantage of the law’s ban on pricing discrimination against the sick. Under this system, the thinking goes, the entire system would quickly plunge into a death spiral.
But as Jonathan Chait, Kevin Drum and others have pointed out recently, the death spiral might not be as inevitable as most assume. The reason has to do with other provisions in the law that expand access to state Medicaid programs and offer subsidies to help consumers purchase private plans. This could provide for incentives that would encourage many young and healthy people to take part in the system. The example of Oregon, where 90,000 residents applied for 10,000 spots when the state decided to increase its Medicaid rolls a few years ago, suggests that carrots could be as effective as coercion for many people.
If this theory is right, then the healthcare law may still be workable even without a mandate. According to a scenario gamed out by Drum, insurance companies would raise rates to compensate for a slight death spiral effect, but the increases would eventually level off – a significant, mandate-less expansion of coverage achieved without exploding costs or bankrupting insurers.
The question is whether Democrats, if the mandate is wiped out, will buy into this – and, if they do, whether they’ll deem it politically wise to press ahead supporting the law and defending it against Republican attacks. It’s by no means certain they would. After all, the law itself doesn’t poll very well right now. Now add in a Supreme Court declaration that the mandate is unconstitutional and consider the effect it could have on swing voters who are already wishy-washy about the law; would they regard such a ruling as validation of the GOP’s Obamacare attacks?
The White House would presumably be interested in sticking with the law – it’s Obama’s main legacy item at this point – but if a significant chunk of his party doesn’t have the desire or will to follow him, he’ll have trouble. And if Democrats do give up on it, then it would be hard to envision any immediate pivot to single-payer. That would be something for the very, very, very distant future.
Steve Kornacki writes about politics for Salon. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki More Steve Kornacki.
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