Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Obamacare: Examination and Response
An appraisal of the Affordable Care Act and-- with some guesswork-- its tricky politics. Then, a way to capture major new revenue, even paying down existing Medicare debt, without raising premiums or harming quality care. Then, an offering of reforms even more basic, but more incremental. Finally, the briefest of statements about the basic premise.

Proposal: Coordinate Sections 1501 and 1251

After adventures in Congress and the Supreme Court, the Affordable Care Act no longer says it creates mandatory health insurance. It has transformed into addition of Chapter 48 within Subtitle D of the Internal Revenue Code of 1986. As such, it creates a default minimum coverage requirement in Section 1501 (now renamed Section 5000A), recognizing three main exceptions. They are Religious Objectors, Illegal Residents, Incarcerated Persons, (plus a catch-all group of "Hardship Cases".) The total it comprises is about the same thirty million uninsured persons we started with, although they may be different people. This expedient patches over the difficulties created by the Supreme Court decision in XXXX v. Sibelius, but the implication seems to be that since everyone is required to pay taxes, everyone must have health insurance, but that really cannot be so. The largest exception would be those enrolled in Medicare, taxed, but not covered by the Affordable Care Act. Native Americans pose a different problem. The potential for other loopholes to appear is considerable, and further legislative modification is certainly more awkward. Congress will certainly be vexed to find that modification of the immigration laws implies a change in Obamacare eligibility, as well.

In Section 1251 there is an independent exception, which declares everyone who is satisfied with existing coverage is allowed to keep it. Many are surprised to read it there, and no doubt some would wish it would go away. It appears politically impossible to change it. But, when someone gets standing to sue, the Supreme Court will have to choose, and both political parties are fearful of what the Court might then decide. Section 1251 can easily be defended as a necessary step toward gradual transition into a massive new program. It can also be attacked as a Booby Trap, deliberately sabotaging a political victory. And it can be suspected of being one of those raisins deliberately placed in the Senate pudding, with plans that went astray when the death of Senator Kennedy made it impossible to remove it at the House-Senate Conference Committee. When the Supreme Court gets it, it will make little difference who included the provision, or why. With such a gun at its head, the Legislative Branch would be foolish not to seek a quiet resolution.

Let's begin by noticing that exempting some people from the law is exactly the same as allowing them to choose something else. Section 1251 defines a category of exceptions, but it does not affect the number of uninsured. People who do not wish to transfer might as well be added to incarcerated persons, illegal immigrants, and religious objectors, for all the difference it would make in the number of people covered. Since the largest insurance category of all, encompassing employees of large businesses, has been indefinitely postponed independently, it might actually be true that the size of the program could be reduced to more manageable proportions, but it is certainly no larger. For those looking for a workable face-saving way out of the present train wreck, consolidating the exemptions might create a basis for one. While the new coverage might be more comprehensive, it is only that difference in comprehensiveness which changes. As time gets closer to the elections, political damage from administering a failing program certainly gets worse, and "playing for the breaks" has less time to work. The dynamics from the other side of the table are harder to discern, but it is always good politics to rescue the nation from a looming threat.

Although there would certainly be many objections to consolidating the two sections of the APA, it is difficult to imagine other alternatives for this particular issue. Even ending the Cold War took a long time, when the two negotiators agreed on the goal. Perhaps surrendering to Justice Sutherland's historic doctrine that the whole law is "void for vagueness" is best seen as a nuclear option. The practical consequence of totally voiding Obamacare would be a return of health care to regulation by the States but without the benefits of conciliating the change. Beyond that, questions of interstate transfers of health insurance coverage might start with copying useful features from ERISA. To use an old phrase, this isn't rocket science; there aren't many significant differences between states, right now. But it may not be necessary to smash the Affordable Care Act to achieve more than smashing would achieve. We lived with state regulation of healthcare for centuries; we could do it again.

Accordingly, to get the ball rolling, it seems reasonable to Propose: That one or more Houses of Congress should reopen the ACA law for limited technical amendments, chiefly to add Section 1251 as an additional feature of Section 1501, thus making that entire section just one additional category of recognized exemption, from the minimum coverages in the new tax code.

Originally published: Thursday, July 03, 2014; most-recently modified: Monday, June 03, 2019