WASHINGTON (AP) — Opponents of President Barack Obama’s health care overhaul law are a cheering a federal court ruling that one of its core provisions is unconstitutional. They may not realize that Obama has a fallback option that also could do the job.
Even if the Supreme Court ultimately agrees that government cannot require individuals to carry health coverage, the Obama administration could borrow a strategy that Medicare has used for decades to compel consumers to join new insurance groups.
Medicare’s coverage for doctor visits is voluntary and carries a separate premium, yet more than nine in 10 older people sign up. The reason is simple: Those who opt out when they first become eligible face a lifelong penalty that escalates the longer they wait.
The same kind of penalty could be incorporated into the health care overhaul to replace its current mandate that all those who can afford a policy must get one. It would be a stiff nudge to enroll healthy people who are potentially reluctant. That’s needed to help keep premiums affordable because the law takes away the ability of insurers to turn away sick people.
Even if the approach doesn’t work as well as for Medicare, it could provide a strong incentive.
“It wouldn’t be a nirvana solution,” said health policy consultant Chris Jennings, but “it’s better than nothing.” A Democrat, Jennings served as a senior health care adviser to President Bill Clinton and Hillary Rodham Clinton in the 1990s when they unsuccessfully pushed for coverage for all.
Jennings believes the law as written would cover more people for a lower cost, but says “it would be irresponsible not to try an alternative” if the courts reject it.
Other prominent experts say Medicare’s way could be more effective.
That’s because the fines that back up the health care law are relatively low. When the individual coverage requirement takes effect in 2014 many people might still come out ahead by ignoring it. The fines they’d face could be lower than the premiums they would have to pay.
It’s a “mandate lite,” said economist Gail Wilensky, who ran Medicare for President George H.W. Bush. “A modification of what is done with seniors on Medicare would be a much more powerful tool. You don’t have to buy insurance. But if you don’t, the first time you come in, we’re going to add a penalty that you’ll have to pay for the next four or five years.”
The White House says the law will be vindicated and there’s no need for a fallback plan.
Nonetheless, the decision by U.S. District Judge Henry E. Hudson, a Republican appointee in Richmond, Va., was the first successful challenge to the new law. Hudson ruled that Congress exceeded its constitutional authority to regulate interstate commerce by requiring individuals to obtain health insurance, whether through an employer, a government program or by purchasing their own policy.