Thursday, April 05, 2012

Marty Lederman concurs: individual mandate could be trimmed not killed

On March 31, I put up a post (updated 4/2) arguing that a highly germane provision of the Affordable Care Act went unmentioned during the Supreme Court grilling of Verrilli: the option for adults under 30 and others showing financial hardship to buy catastrophic coverage only, rather than a bronze, silver or gold plan on the exchanges. That was germane because Alito, Roberts and Scalia all asserted that not everyone in the market needs the range of services that policies offered in the insurance exchanges are required to cover -- implying that the young and healthy were being treated as "golden geese," as plaintiff's attorney Paul Clement later claimed, being tapped to finance coverage for the older and sicker.

Given the concern that the government's intrusion be as limited as possible, I wondered "whether the catastrophic care option for those under 30  does not suggest a way out: it could be extended. Could the judges rule that the mandate can extend to catastrophic care only -- in effect, legislating from the bench?  I am pleased to note that Marty Lederman at Balkinization, former deputy assistant attorney general in the Obama administration's OLC, has raised the same possibility.

On 4/2, Lederman  suggested the possibility of a "limited Commerce Clause holding" to this effect: "Congress can at a minimum require everyone either (i) to maintain insurance for goods or services that virtually everyone will consume, that the government guarantees, and that many of the consumers will not otherwise be able to pay for (which would thereby shift substantial costs to the public at large); or (ii) to make a modest payment to the government (IRS) to help cover the costs the public will incur if and when the individual consumes services for which she cannot pay."  Then, addressing the plaintiff's claim that the scope of the mandate exceeds the economic need, Lederman refutes the claim on economic grounds, but then suggests that if the justices give it weight they could divide the baby (or slim it down) as follows:
Moreover, even if Randy and Mike Carvin were correct, and the preventive care coverage could not be justified under my proposed, or any other, limited holding, that would only mean that the Court should declare invalid those subsections of section 18022(b) that go beyond coverage for catastrophic care and other services that are government-guaranteed. Such an excision would likely have, at most, only a marginal impact on the cost of insurance premiums, since it is of course catastrophic and longterm care--the services the state and federal governments guarantee--that account for the lion's share of uncompensated health care costs, and of the cost of health insurance (my emphasis).
I still wonder whether all the justices even know that the ACA does provide a catastrophic coverage option to those actuarially likeliest to need or want it.  Would someone please tell them?


More on catastrophic coverage in the ACA and misrepresentation of the mandate in the Supreme Court (added 5/17)

On the mandate more broadly
The individual mandate is a piece of Cake (4/25)
Verrilli's limiting principles (4/24)
If only Verrilli had said (A, B, C) (3/31)
Verrilli, slapped silly, recovers willy-nilly (3/28)
External links
Patient cost-sharing under the Affordable Care Act (Kaiser Family Foundation. 4/27)
Will the justices make a catastrophic error? (Jonathan Cohn, 4/19)
Policy ignorance at the Supreme Court (Steve Benen, Maddow blog, 4/16)
Supreme Court misunderstanding on health overhaul? (AP's Ricardo Alonso-Salvidar, 4/10)
The bounded, minimalist way to uphold the ACA (Marty Lederman at Balkinization, 4/2) 
Ragbatz on the catastrophic coverage options in the ACA - a healthcare attorney picks up the plaintiff's con in real time ( 3/28)

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