Sunday, April 29, 2012

CC Justices Kennedy, Roberts: A healthcare attorney details the catastrophic coverage options in the ACA

Re my monthlong quest (begun 3/31) to highlight the catastrophic coverage options in the Affordable Care Act that the plaintiffs labored successfully to obfuscate: a healthcare attorney, keeper of the tumblr Ragbatz, apparently picked this dynamic up in real time as news emerged from the 3/27 oral arguments and wrote on 3/28:
Imagine answering Scalia’s yammering that the mandate should have been limited to catastrophic plans, with the short answer that, in essence, it was limited to catastrophic plans.  The Affordable Care Act requires insurers participating in an exchange to offer a “Bronze” level of coverage that has a higher deductible than “Silver” and “Gold” offerings.  The levels of the deductibles are determined by an actuarial formula; for 2014, a leading actuarial company has projected that the deductible in “Bronze” category would be $6,350.  Those healthy but cash-strapped youngsters Scalia is worried about are, under Obamacare, free to choose to a Bronze plan and thus to self-insure below that level.

Furthermore, community rating under the ACA permits age-related premium rates.  The youngest cohort can expect to pay a third of the amount charged to the pre-Medicare cohort.
In essence and in short, the ACA mandate IS a mandate to purchase age-appropriate catastrophic insurance and nothing more.

Thus, there is far less room to argue that the mandate was an overbroad Congressional response to the free-rider problem than Scalia had assumed.  Disarming Scalia on this point - on the spot - would have had a nice impact on the dramatic flow of the argument.  It might have nicely set up the point that these are matters best left to legislators and subject to no more than rational basis test.
Bingo. Coulda woulda shoulda.  Still can? Calling Justice Kennedy....

As I've noted before, it's ironic that the ACA might more easily pass perceived constitutional muster by offering more crummy coverage options. It's a very good thing that the law mandates minimum loss ratios --at least 80% or 85% of premiums spent on health care delivery, depending on plan type, which will yield an estimated $1.3 billion this year in rebates to policyholders. It's a wonderful thing that lifetime caps on coverage have been eliminated, and yearly caps strictly limited. It's not so good if the proffered coverage can be made only marginally "affordable" to some to the point where they would opt for a plan that covers only an estimated 60% of costs.

And it turns out that it's the author of Ragbatz who posted these comments to my 4/10 post about the bronze plans to be offered in the exchanges:
Several actuarial firms have estimated the deductible under the Bronze option and came up with numbers between $2000 and $6500. Even the lowest of these would qualify as the type of policy required to support tax-favored HSA accounts. Such policies are commonly called "catastrophic coverage".

As for the scope of essential health benefits, when catastrophy strikes practically any benefit may come into play.

Finally, as to equating the young with "golden geese", it is also true that the ACA's community rating system does allow age-banding, the youngest paying a third as much as the sixty-four year-olds.

Alongside the catastrophic coverage limitation, all three of these factors significantly reduce the validity of what was essentially an overbreadth argument by Scalia and friends. The mandate IS narrowly tailored to the problem Congress was addressing in enacting it.

A pity that Verrilli had not been able to say, "Yes, Justice Scalia, and that it precisely what Congress did." I did not see this point in the government briefs; perhaps one or more amicus briefs pointed it out One can certainly hope it is picked up by one of the liberal justices or their law clerks. Do they keep reading newspapers and/or blogs relating to case in review? Do they read the sign I'm willing to hold up on the courthouse steps?

...A bit more.

One of the conservative justices cited, with obvious scorn, the fact that some young man might not want drug abuse and mental health coverage. Yet, competent doctors watch their serious accident or sudden serious illness patients for depression and addiction to opiate pain-killers.

I remembered that this morning when I read that Buster Posey, an All-Star catcher for the SF Giants was out of the line-up with a case of shingles. In his mid-twenties, he's a bit young for this disease, is wealthy, and well-insured. But what is remarkable about shingles is that the rash lasts a week, covers no more than a relatively small part of the body, yet can end up in huge pain, sometimes lasting years. Among the most-common treatments for post-shingles pain are opiates and anti-depressants.

Now imagine a major burn victim.

Okay. Now imagine a man Buster Posey's age, although without the seven-figure contract, who does not want mental health or drug abuse coverage.
The Ragbatz author also tossed this bottle into the ocean in response to my post marking the AP's spotlighting of the 'catastrophic' nature of the coverage offered in bronze plans:
Supreme Court Rule 25, Paragraph 7 provides:

After a case has been argued or submitted, the Clerk will not file any brief, except that of a party filed by leave of the Court.

By implication, the Court will not object to a party filing a Request for Leave To File a Special Supplemental Brief. The request, within its own body, would state the urgent matter at hand and why that matter requires further briefing.

Here, the availability of catastrophic coverage under the ACA:

(a) emerged for the first time at oral argument;

(b) was not briefed to the Court by either party or any of the amici;

(c) appears to have been misapprehended by one or more members of the Court;

(d) was misstated to the Court during oral argument Court by counsel for one of the parties; and

(e) supports the position advanced by a different party.

In most courts, it would not be considered a breach of etiquette for the Request for Leave to file a brief to include, as an appendix, the brief itself. In this case, an extremely short brief. I can almost imagine it being done in a sentence or two, although the brief with all the required formalities might run to ten pages or so.

Attaching the brief itself, however, would hardly be necessary. Recitation of the five bullet points (a)-(e) alone in the Request for Leave would likely put the focus of at least one clerk in at least one Justice's chambers exactly where it needs to be.

SG Verrilli, your attention please.
Count this as one more bottle corked and tossed - emailed also to Marty Lederman and Timothy Jost. 

More on catastrophic coverage in the ACA:
Was Verrilli just the wrong man for the job? Part I (Ragbatz Tumblr, courtesy of Anon below, 3/28)
The bounded, minimalist way to uphold the ACA (Marty Lederman at Balkinization, 4/2) 
Supreme Court misunderstanding on health overhaul? (AP's Ricardo Alonso-Salvidar, 4/10) 
Policy ignorance at the Supreme Court (Steve Benen, Maddow blog, 4/16)
Will the justices make a catastrophic error? (Jonathan Cohn, 4/19)

And on the mandate more broadly:
The individual mandate is a piece of Cake
Verrilli's 'limiting principles' for the individual mandate
Another 'limiting principle' to individual mandate: states can opt out
If only Verrilli had said (A, B, C)
Verrilli, slapped silly, recovers willy-nilly (3/28)

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