Considering mandate alternatives

Liberal Rep. Peter A. DeFazio is proposing that Americans be allowed to forgo buying health insurance if they agree to pay for their care. Senate Democrats are working on other incentives to avoid requiring people to get insurance.

Nancy PelosiFrom the start, Republicans have uniformly opposed the health care overhaul and pressed to repeal it. Now, Democrats are increasingly exploring legislative options should the Supreme Court strike down the law’s requirement that individuals get health insurance, or throw out the law altogether — contingency planning that seemed unthinkable just a few months ago.

Talk of alternatives to the requirement picked up last week after a federal court in Florida ruled the law (PL 111-148, PL 111-152) unconstitutional. DeFazio, who voted for the overhaul, sent a letter to colleagues saying Congress could quickly resolve any question about the law’s constitutionality by allowing individuals to opt out of the requirement to carry insurance as long as they take full responsibility for their health expenses.

The proposal could prove attractive to those who support access to health care and recognize some Americans prefer not to carry insurance. “Buying insurance should be a choice, not a matter of federal coercion,” wrote the Oregon Democrat. “But with that choice comes responsibility.”

Under DeFazio’s draft proposal, those who do not want health insurance would be required to file an “affidavit of personal responsibility” and waive their right to enroll in a health insurance exchange or Medicaid. They also would be barred from using the bankruptcy law to reduce health-related debt.

Democratic Sens. Ben Nelson and Claire McCaskill also are exploring alternatives to provide financial incentives to those who sign up for health insurance during an open-enrollment period. Their ideas are fashioned after one Congress used when it provided a prescription drug benefit for Medicare recipients. It’s an effort to pass constitutional muster and ease the worries of moderate Democrats who dislike the individual mandate.

Nelson’s interest predates the court decision since he has been looking for an alternative to the individual mandate for nearly a year. That he faces reelection in 2012 in Nebraska, one of the 26 states that were party to the lawsuit in Florida, has only added urgency to his effort. Nelson has asked the Government Accountability Office (GAO) and the Congressional Budget Office (CBO) to analyze and provide an estimate of the cost of his proposal. Nelson spokesman Jake Thompson said the senator would prefer to offer people incentives to get insurance rather than have a requirement.

It’s unclear when the GAO and CBO reports will be completed, but Nelson is hopeful they will be done in time for him to introduce legislation to replace the individual mandate.

“If it’s a viable alternative that would bring a large number of people into the system, he would introduce that to replace the individual mandate,” Thompson said.

McCaskill, who faces re-election next year in Missouri, said the difficulty is finding an alternative that ensures the insurance pool has a mix of both sick and healthy individuals — a combination needed to spread risk. “How do you say to a private insurance company, ‘You must insure somebody that you know is going to cost you a lot more money than somebody who hasn’t been sick before,’ if you do not have more people in the pool?” she asked.

McCaskill wants any alternative to maintain a private, free-market system that still covers the chronically ill. The question, she said, is whether the incentives will prompt enough people to buy insurance to avoid penalties if they don’t.

Republicans applauded the Florida judge’s ruling to promote their call to allow states to decide whether to participate in the health care program. Sens. John Barrasso of Wyoming and Lindsey Graham of South Carolina unveiled a measure (S 244) to allow states to opt out of any or all of the provisions. “My view of the law is that if you allowed the states to opt out, half would,” Graham said on Fox News. “That would make us start over with a new bill.”

Other proposals coming from Congress are far less sweeping, including a proposal to permit states to seek waivers from the law to establish parallel health care systems far sooner than 2017, as the law permits. Democratic Sens. Ron Wyden of Oregon and Mary L. Landrieu of Louisiana and Republican Sen. Scott P. Brown of Massachusetts introduced a bill Feb. 1 (S 248) that would allow states to seek waivers as soon as 2014. Vermont’s three lawmakers — Democratic Sen. Patrick J. Leahy, independent Sen. Bernard Sanders and Democratic Rep. Peter Welch — are proposing that the state be permitted to institute a single-payer system.

The White House has largely ignored growing calls for substantive changes and is banking on the high court finding the law constitutional. “As a political strategy they have to maintain a complete air of confidence,” says Brad Joondeph, a law professor at Santa Clara University.

Jane Norman is associate editor of CQ HealthBeat.
Copyright, Feb. 7, 2011.