How implementation could go ahead anyway

Published in POLITICO

If the Obama administration loses the health reform suit in the Supreme Court on Thursday, implementation might keep on chugging, even if the individual mandate is thrown out.

That’s because only the broadest options for striking down the law would actually upend the structures federal officials have been working to build, including setting up health insurance exchanges, adding millions of people to Medicaid and making major changes to Medicare.

So even if the hot-button mandate goes — and some of the key insurance rules the Obama administration says can’t be severed from it go with it — the court could say, “the [health reform law] is here to stay and we should move full steam ahead on implementation,” predicted Ethan Rome of Health Care for America Now.

Of course, the court could also cause what many experts call “chaos” by tossing out the whole Affordable Care Act. A slew of health insurance regulations could have to be rewritten, billions of dollars could be in limbo, and thousands of people in temporary health insurance programs could abruptly lose their coverage.

But a ruling that doesn’t give the 26 states that brought the suit most of what they want would still leave much of the law standing.

This would probably cause political chaos — years of fighting about whether Congress should finish undoing the law or enact substitutes for whatever parts are struck down. And it would prolong battles with states that resist new federal insurance rules, But it wouldn’t change HHS’s job much right away.

“If all that is struck is the mandate, I think it’s going to be all systems go, and I think there’s going to be rigorous implementation,” said Ron Pollack of Families USA, an ardent backer of the health law.

Mitt Romney health adviser Tevi Troy agreed that the “Obama HHS will just proceed full speed ahead unless the whole law is knocked down or something close to it.”

“I think we’ve seen with the president’s approach to other issues that he’s willing to take an expansive interpretation of executive authority,” Troy said. “The law remains problematic and needs to be repealed and replaced.”

Policy questions will, of course, loom over all HHS’s implementation work under this scenario. Is there a way to fix the potential instability in the insurance market without the mandate? And, if the Supreme Court tosses out the rule that people with health problems can buy insurance without paying extra, should it be restored?

The problem is especially urgent if only the mandate goes. The whole reason for the coverage requirement in the first place was to make sure that enough healthy people buy insurance to offset the cost of covering sick people — the ones who would have been denied coverage before the law was passed. If this isn’t addressed before the new market rules take effect in 2014, many insurance experts warn of a “death spiral” of skyrocketing premiums and decreased enrollment until health plans just close their doors.

But these questions don’t have to be solved right away for HHS to revamp Medicaid, recruit providers for experimental payment initiatives in Medicare or establish the rules for health insurance exchanges.

And this fact could put health reform’s strongest opponents in the states in an uncomfortable position: If Congress deadlocks on responding to the court’s ruling, insurers will likely pressure them to enact their own individual mandate to be sure the markets don’t collapse.

“All the details that have to be put in place to make the law work all have to happen in the next 18 months regardless of whether the federal mandate’s in place or not,” said the Kaiser Family Foundation’s Larry Levitt.


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