With healthcare reform law in legal limbo, Dems consider their options

Healthcare reform supporters have begun to seek alternatives to the unpopular individual mandate at the heart of Monday’s surprising decision overturning the entire law.

Officially, the Obama administration dismissed Judge Roger Vinson’s decision as a fluke. Two judges have already ruled that the mandate is constitutional, and a third struck down the mandate but not the rest of the law.

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“The department intends to appeal this ruling to the 11th Circuit Court of Appeals,” said Justice Department spokeswoman Tracy Schmaler. “We strongly disagree with the court's ruling today and continue to believe — as other federal courts have found — that the Affordable Care Act is constitutional.”

Yet lawmakers supportive of the law and healthcare activists are already actively contemplating various scenarios for moving forward without the mandate.

Healthcare reform advocates say that as the administration and the states move forward with implementation, millions of Americans will begin to benefit from the law's consumer protections — making it less likely that the appeals court judges and eventually the Supreme Court justices will strike down massive legislation that's already the law of the land. 

“I think the litigation will be less attractive at that time,” said Tim Jost of the Washington and Lee University School of Law.

Even if the mandate itself is struck down, others say, moving forward with implementation could also make it more likely that Americans would clamor for an alternative so they can keep the law's consumer protections.

“Justices have to factor in the impact of their decision on people,” said Chris Jennings, who was senior healthcare adviser to President Clinton. “I'm not saying they’ll acknowledge that. But everyone's human, and humans react to their environment.”

Traditionally, judges have sought to strike specific provisions instead of entire laws, to avoid accusations that they’re legislating from the bench. The federal judge in Virginia who struck down the mandate in December, for example, limited his ruling to the mandate.

“Without the benefit of extensive expert testimony and significant supplementation of the record,” Judge Henry Hudson ruled, “this court cannot determine what, if any, portion of the bill would not be able to survive independently.”


Vinson addressed his rationale for striking the whole law in his decision.

“I must conclude that the individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit,” Vinson wrote.

Democrats are still hopeful that the Supreme Court will rule in their favor on the individual mandate. If that doesn't happen, though, they've started laying the groundwork to argue that only the mandate should be stricken, not the whole law.

The administration in November filed arguments in the Florida case, stating that “parts of the statute ... are plainly severable from ... the minimum coverage provision.” Lawyers for the administration wrote at the time that “plaintiffs inflate beyond their obvious meaning” the arguments in favor of the individual mandate and added that “countless ... provisions of the Act are entirely capable of being applied even if” the mandate is struck down. 

Defenders of the law reiterated those arguments after Monday's ruling.

“There is no reason why the rest of the statute — including the insurance reforms — shouldn't go forward without the individual mandate,” Jost said during a press call organized by the liberal Center for American Progress (CAP). It would be “more difficult,” but “not impossible.”

“Most of [the provisions] do not have anything to do with the individual mandate,” added CAP Chief Operating Officer Neera Tanden, who worked inside the White House Office of Health Reform during the reform debate. “I think that is a mark of how much judicial activism this ruling really is.”

Some centrist Democrats up for reelection in 2012 are already looking for alternatives.

“There's other ways we can get people into the pool — I hope — other than a mandate, and we need to look at that,” Sen. Claire McCaskill (D-Mo.) said on MSNBC earlier this month.

Sen. Ben Nelson (D-Neb.) late last year asked the Government Accountability Office to evaluate alternative incentives to get people covered. The senator has been told to await a response “in the first part of this year,”  a spokesman said Monday.

The Congressional Budget Office (CBO), however, thinks striking the mandate would have a noticeable impact. According to the CBO's June analysis, repealing it would increase the number of uninsured people in 2019 by 16 million, for a total of 39 million uninsured. Doing so would also shave $202 billion off the federal deficit, as scores of people choose to forgo signing up for Medicaid or requesting federal subsidies to buy private coverage.

Some options do exist if the Supreme Court tosses the federal mandate.

Bill Pewen, the top health staffer for Sen. Olympia Snowe (R-Maine) during the healthcare reform debate, laid them out last December in a lengthy post on the policy journal Health Affairs’s blog. Pewen was deeply involved in the process because Snowe was among the four Republicans who worked for several months with Senate Finance Committee Democrats to try to craft a bipartisan bill.

One alternative would be to penalize people who wait to buy coverage by hitting them with higher premiums or excluding them from certain protections, such as the guarantee that a pre-existing condition will be covered. Another approach would be to tell states that they can only get certain federal subsidies if they pass their own individual mandates.

“The risk of a successful challenge of the mandate could have been avoided through a number of alternative mechanisms,” Pewen wrote. “Most of these were not viable, as they would have required substantial bipartisan cooperation to enact.”

Jennings told The Hill that there were major shortcomings with all those alternatives.

The idea of penalizing people who wait works to get them into Medicare as soon as they're 65, but older Americans are much more risk-averse than the young people who are most likely to stay uninsured without a mandate. And failing to sign up for Medicare benefits and its 75 percent subsidy would be a costly “mistake,” he said.

As for leaving the decision up to the states, that would create a patchwork system because some would be sure to reject the mandate; in fact, voters in several states have already voted to make it illegal.

Still, Jennings said, the administration would likely seek ways to keep the healthcare reform law intact if the mandate is struck down.

“I think they feel committed to those insurance protections,” he said, “and they would look at alternative ways to do that.”

Correction : This story was updated at 9:45 a.m. to reflect the fact that Missouri is not among the parties in the Florida challenge.