Health Care Reform Can’t Work Without the Individual Mandate

The Supreme Court has announced its plan to take up the case of the Patient Protection and Affordable Care Act. As we all know, since it passed last year, President Obama’s health care overhaul has inspired intense opposition, numerous bills of repeal, and many, many lawsuits.

The Court will hear just one of these: Florida v. Department of Health and Human Services, which was brought by 26 states and the National Federation of Independent Business. Most of their arguments—in fact, much of the opposition to the law in general—revolve around the individual mandate, the requirement that (almost) every American purchase health insurance or face a penalty. Is that constitutional or not?

The first ruling in that case, by U.S. District Judge Roger Vinson, found that the individual mandate was not constitutional, and was not what judges and lawyers call “severable” from the rest of the law, meaning, as he put it, “the entire Act must be declared void.”

The Obama administration appealed to the United States Court of Appeals for the 11th Circuit, in Atlanta, where, in August, a three-judge panel agreed that the mandate was unconstitutional, but said that it was severable—the rest of the law could stand.

The problem is that it can’t. Maybe it can legally, but practically, there is simply no way insurance companies can cover everybody unless everybody buys insurance. And everybody won’t buy unless they have to. If health insurers have to cover everyone regardless of health status or preexisting conditions (and they will in 2014), then young, healthy people could wait until they get sick to buy insurance. But health plans cannot survive if they cover only the sick. As I’ve said before, “The simple fact is that health insurance works best by spreading the cost of health care among a broad cross-section of the community—from the most healthy to the most ill—that is, when everybody pays for health insurance, but not everybody uses it.”

You can read my full post on the topic from back in February. The upshot is that when it comes to the health reform law, “severability” is possible in the courtroom, not in real life. If the individual mandate falls, the whole thing falls apart.

The Supreme Court is likely to rule in June.