Randy Barnett, at The Volokh Conspiracy, posted this article about a fact sheet recently provided by the White House. The fact sheet addresses the pending constitutional challenge to the Affordable Care Act’s individual mandate currently before Judge Henry Hudson. In anticipation of a ruling, the White House admitted that should the individual mandate be held unconstitutional, the portion of the Act requiring insurance companies to accept and cover people with pre-existing injuries would likewise fall. The fact sheet explained:
The Affordable Care Act also bans insurance companies from discriminating against people with preexisting conditions beginning in 2014 (In 2010, insurance companies were banned from discriminating against children). However, unless every American is required to have insurance, it would be cost prohibitive to cover people with preexisting conditions. Here’s why: If insurance companies can no longer deny coverage to anyone who applies for insurance – especially those who have health problems and are potentially more expensive to cover – then there is nothing stopping someone from waiting until they’re sick or injured to apply for coverage since insurance companies can’t say no. That would lead to double digit premiums increases – up to 20% – for everyone with insurance, and would significantly increase the cost of health care. We don’t let people wait until after they’ve been in a car accident to apply for auto insurance and get reimbursed, and we don’t want to do that with healthcare. If we’re going to outlaw discrimination based on pre-existing conditions, the only way to keep people from gaming the system and raising costs on everyone else is to ensure that everyone takes responsibility for their own health insurance. If we don’t, then we will go back to the days of allowing insurance companies to deny coverage to people with pre-existing conditions.
If the constitutional challenge to the Affordable Care Act’s individual responsibility requirement ultimately prevails, it would mean that provisions preventing health insurance companies from discriminating against people with pre-existing conditions would also be invalidated by the court because the two are inseparably linked. If insurance companies are required to cover those with pre-existing conditions, who are potentially more expensive to cover, without requiring everyone—both sick and healthy people—to have insurance, premiums will increase rapidly. Similarly, other provisions – including banning insurers from discriminating based on health status, age and gender – would also fall.
The government’s concession is the same argument Professor Barnett made in his most recent law review article, entitled Commandeering the People: Why the Individual Health Insurance Mandate is Unconstitutional, which can be found here.
It will be interesting to learn whether Judge Hudson, the Fourth Circuit, and ultimately, the Supreme Court agree with Professor Barnett and the White House, should they find the individual mandate unconstitutional.