Washington Lawyer

Cover Story

July 2008

 

Universal Healthcare

By Joan Indiana Rigdon

 

It’s been seventeen years since a little known Democrat came back from 40 points down in the polls to best his Republican opponent in a special election for U.S. Senator from Pennsylvania. Harris Wofford, then serving as president of Bryn Mawr College, had never before run for any office. He won out over a two-term Pennsylvania governor, Dick Thornburgh, on the strength of a unique campaign promise: national health insurance.

 

Wofford’s unlikely win put universal healthcare on the nation’s agenda, and the following year, at the heart of Arkansas Governor Bill Clinton’s campaign for president. When Clinton won, there was widespread hope that he would find a way to lower costs, improve service and reduce the ranks of the uninsured, who then numbered nearly 40 million.

 

Now, four Presidential election cycles later, universal healthcare is once again front and center, with each candidate promising significant changes. Hillary Clinton would make health insurance more affordable and require every citizen to buy it. Barack Obama would require coverage for every child while making it more affordable for adults. Both would prevent insurers from refusing to cover those with pre-existing conditions. John McCain would introduce tax credits to make it easier for workers to buy health insurance from any provider they choose, instead of being stuck with the plan chosen by their employers.

 

Meanwhile, potential future Presidential and vice-presidential candidates across the nation, from California Governor Arnold Schwarzenegger to former Massachusetts Governor Mitt Romney, have spent recent years fighting for their own versions of universal healthcare.

 

To some, the prospect of some sort of major health reform makes it feel like 1993 all over again. “There’s a school of thought out there that says within the first six months, [the new president] will have to introduce a health care plan and get the ball rolling,” says Bill Schiffbauer, a solo practitioner in Washington D.C. who has built his career specializing in health care regulation and healthcare policy.

 

Which President, and which plan, of course, remain to be seen. Schiffbauer hopes that whoever lands in the White House will outline a few particular goals and let Congress hash out the details – as opposed to trying to reform the entire American healthcare system “in the first inning,” which is the approach he says the Clinton Administration took with its 1,300-page Health Security Act.

 

Then again, Congress isn’t guaranteed to make much progress on health reform either, Schiffbauer says. “You can look at the legislative process as an intersection of two main thoroughfares. At some point, the lights stop working and it’s a flashing yellow light. And if you have 535 cars parked at the intersection, no one’s going to get through.

 

“I think that’s what happened with the Health Security Act. People saw things starting to fall apart and they said, ‘Gee, there’s an opportunity for me to be a hero here. Here’s my idea.’ Everyone said that, and they told two friends, and they told two friends …”

 

Problems Now

There’s no question that our current health care system is remarkably inefficient. The U.S. government spends a greater percentage of its gross domestic product on healthcare than any other industrialized nation, yet – unlike the other industrialized nations, who insure all of their citizens – sixteen percent of our population is uninsured.

 

The U.S. doesn’t just spend more than its socialized healthcare neighbors; it spends a lot more, and in some cases, nearly double.

 

According to a report last year from the Centers for Medicare and Medicaid Services (the federal agency that administers Medicaid and the State Children’s Health Insurance Program, known as SCHIP), the U.S. government spent more than 15 percent of its gross domestic product on healthcare in 2004, compared to about 10 percent spent by Canada.

 

Our spending rate was nearly twice that of the U.K and Japan, which each clocked in at about eight percent of GDP, the report says. (CMS sourced these figures from the Organization of Economic Cooperation and Development’s Health Data for 2006).

 

Finally, our spending is rising faster than it is in states with socialized medicine. While the percentage of GDP spent on healthcare has doubled since 1960 for U.K. and Canada, our rate has tripled.

 

Reforming the Employer-Based System

Part of the reason our healthcare insurance is so expensive is that many of us don’t have it, especially those of us who are young and statistically less likely to require expensive medical care. According to CMS, as of 2005, about one-fifth of our uninsured were between the ages of 18 and 25.

 

The goal then, has been to get as many people insured as possible, not only for their own benefits, but to create a larger risk pool that also includes the healthiest among us. That would reduce insurance companies’ risk, thus allowing them to charge lower premiums. It would also reduce the burden on federal and state governments who are finding it increasingly difficult to pay for Medicaid, the federal- and state-funded program that provides medical care to the poor and disabled.

 

Historically, we have relied on employer-sponsored insurance to cover Americans of working age and their families. But that system is under fire because under it, 47 million have fallen through the cracks.

 

“There’s been an ideological attack on the current employer-based system, says Phyllis Borzi, who served for 16 years as counsel to the House subcommittee on labor-management relations. She is now a George Washington University research professor in the Department of Health Policy.

 

“It comes from both the left and from the right. On the left you have people who believe in single-payer and from the right, you have individual mandates and the idea that everyone should be the Marlboro Man, with no government presence. … Both sides, in essence, weaken the current system.”

 

For now, we should be shoring up the current system, she argues. “You still have millions and millions of workers and their families getting coverage through employer-based systems.”

 

Borzi doesn’t like the idea of individual mandates on their own because “you’re creating risk pools of one in a marketplace which is completely dysfunctional, where it’s hard enough to buy group products. What you really have to do over the short run to get everybody in the system is you have to combine some sort of employer mandate - I’m going to use the loaded word ‘mandate’ - with an individual requirement that insurance has to be purchased.”

 

Employer Mandates and Conflicts with ERISA

While one state, Massachusetts, has enacted reform that combines individual and employer mandates, most local jurisdictions that are introducing healthcare reform legislation are focusing primarily on employer mandates. These so-called “fair share” laws (also called “pay or play”) require employers to spend a certain amount of money - generally a percentage of their payrolls - on health insurance for their employees, or else pay the difference to the state, which uses the funds to provide health coverage or services to the uninsured.

 

Maryland and San Francisco are among the state and local governments who managed to enact fair-share laws; last year, California mulled one but did not pass it.

 

Many local jurisdictions are finding that when it comes to healthcare reform involving employee benefits, their hands are tied by the federal Employee Retirement and Security Act of 1974, known as ERISA. Originally conceived of as way to stop employers from mismanaging private pension plans, ERISA regulates all “welfare benefit plans” for employees. That includes health insurance as well as pensions.

 

As a federal law, ERISA pre-empts all state and local that laws conflict with it. But beyond this, ERISA specifically pre-empts any non-federal laws that “relate to” employee benefit plans covered by ERISA.

 

The point of this clause is simplicity. Under it, employers who operate in several states can offer one employee benefit plan across the nation (with the exception of Hawaii, which laws regarding employee health insurance plans before ERISA passed). Without the clause, employers would have to retool their benefits package for each state.

 

Maryland’s Fair Share Health Fund Act

In January of 2006, Maryland’s state legislature overrode its Governor’s veto to pass a law requiring non-government employers with more than 10,000 Maryland employees to spend at least eight percent of payroll on healthcare for employees, or pay the difference to Maryland’s Medicaid fund. (When computing payroll, employers were allowed to exclude any compensation they paid to any employee that was beyond Maryland’s median household income).

 

Maryland’s goal was to shore up its Medicaid fund, whose costs had increased as employer-sponsored healthcare benefits had declined, to the point, Maryland said, that Medicaid had been “transformed into a corporate subsidy.”

 

The law was called the Fair Share Health Fund Act. But since only one employer, retailing behemoth Wal-Mart Stores Inc., would have been affected, it became known as “the Wal-Mart law.” (When the law passed, there were two other non-government employers large enough to be affected, but they were exempt because they met the law’s minimum requirements for spending on healthcare).

 

The Retail Industry Leaders Association, a trade group whose members included Wal-Mart, objected on the grounds that the law was pre-empted by ERISA. Proponents of the law argued there was no pre-emption, based on the Supreme Court’s 1999 decision in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co.

 

Travelers

Travelers stemmed from a New York statute that required hospitals to collect surcharges from patients who were insured by commercial insurers, but not from patients insured by Blue Cross/ Blue Shield. (Those plans received favorable treatment under the statute because they accept all applicants who can pay, including high-risk patients who might be rejected by other commercial plans).

 

The U.S. Court of Appeals for the Second Circuit held that because the statute increased costs paid by patients insured through some plans but not others, the statute interfered with employers’ choices between plans covered by ERISA, and was therefore pre-empted.

 

In a unanimous decision, the Supreme Court reversed. Expressing frustration with ERISA’s lack of clarity on what “relates to” means, the court instead based its decision on its understanding of the intent of ERISA’s pre-emption clause. In the court’s view, the “basic thrust” of the clause “was to avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans," Justice David Souter wrote.

 

While the New York statute had an “indirect economic influence” on the prices of plans, that did not bind plan administrators to choose one over the other, nor did it interfere with an employer’s ability to administer a single benefit plan across the country, the court held.

 

A Plea from the Fourth Circuit?

In July 2006, U.S. District Court for the District of Maryland struck down Maryland’s fair share law. In a 2-1 decision in Retail Industry Leaders Association v. Fielder, the majority wrote that nothing in Travelers suggests the Supreme Court would uphold a law requiring a minimum level of healthcare benefits in an ERISA plan.

 

In February 2007, the U.S. Court of Appeals for the Fourth Circuit affirmed. Interestingly, Schiffbauer notes, the 2-1 majority went to great lengths to suggest that it wished it did not have to strike down the law. Specifically, the majority wrote that the law had a “noble purpose” and that the majority was “sensitive” to the rights of states to enact laws of their choosing. Nevertheless, “we are also bound to enforce ERISA as the "supreme Law of the Land,” they wrote.

 

Schiffbauer describes this passage as the Fourth Circuit’s “plea” to other courts to allow states to do as much as they can to allow other states to continue experimenting with healthcare reform. “This is where the proponents of the Maryland and the San Francisco tax dropped their reading. The [Fourth Circuit] said that had to happen within the context of ERISA,” Schiffbauer says.

 

Tom Gies, a Crowell & Moring partner who specializes in employment law, believes proponents of fair-share laws have underestimated the power of ERISA preemption. “If you go to academics” for comment on the Fourth Circuit’s decision to strike down the Maryland law, “they will say, ‘Geez, this is a shame. It shouldn’t be this way. It interferes with the opportunity for states to be laboratories and try to solve the problem by enacting laws like the one in Massachusetts,” Gies says.

 

“And that’s a very valid point. The problem is, these dozen Supreme Court cases” upholding the ERISA preemption clause, he adds.

 

A few months after the Fourth Circuit affirmed the lower court’s decision to strike down the Maryland law, U.S. District Court for the Eastern District in New York followed the decision closely to strike down a similar law in that state’s Suffolk County. Unlike the Maryland law, the Suffolk County’s law specifically targeted large employers that also sell groceries. That case, Retail Industry Leaders Association v. Suffolk County was decided on July 14, 2007. The case has not been appealed.

 

Healthy San Francisco

In June 2006, one month before Maryland’s law was struck down in District Court, San Francisco Mayor Gavin Newsom announced his plans for a program that would provide universal healthcare to San Francisco.

 

In April 2007, San Francisco passed the Healthcare Security Act ordinance, which launched the Mayor’s plan, called Healthy San Francisco. Under it, any uninsured city resident between the ages of 18 and 65 can receive free or low-cost healthcare at certain city hospitals and clinics, regardless of their income, immigration status or whether they have pre-existing medical conditions. Those who are eligible for the federal or state-funded programs, such as Medicaid, will be enrolled in those programs instead.

 

To help pay for the program, San Francisco requires most employers to spend a certain amount on healthcare for its workers, or make up the difference by paying into the City’s Healthy San Francisco fund. Under the ordinance, employers with 20 to 99 workers must spend $1.17 per hour their employees work; those with 100 workers or more must pay $1.76 per hour.

 

A trade group, the Golden Gate Restaurant Association sued, arguing that the ordinance was pre-empted by ERISA. In December of 2007, U.S. District Court for the Northern District of California agreed, and the law was struck down.

 

In April the U.S. Court of Appeals for the Second Circuit had heard oral arguments in the case, Golden Gate Restaurant Association v. City and County of San Francisco. As of press time, it had not yet ruled.

 

However, the court is widely expected to find no ERISA preemption. It signaled as much in January, when it issued an emergency order allowing the law to remain in full effect pending appeals.

 

“People from City and County of San Francisco are pretty optimistic” that the Ninth Circuit will uphold San Francisco’s ordinance “given what that panel of the Ninth Circuit said. That panel made it quite clear that it wasn’t pre-empted,” by ERISA,” says Borzi, of George Washington University.

 

If the appeals panel agrees, that would create a split between the Second and Fourth circuits. “It’s likely to end up before Supreme Court,” she predicts.

 

Tom Miller, resident fellow at the American Enterprise Institute for Public Policy Research, isn’t so sure, especially since the possible split would involve the Ninth Circuit. “They are the most reversed Court of Appeals in the whole country. I would always do a discount on any ruling that comes through there,” he says.

 

Miller also thinks the Supreme Court has had its fill of ERISA cases. “We’ve had this whole era where a bunch of cases bubbled up on ERISA, in terms of whether or not states could find a way to sue, to chip away” at it, he says. By the time [the Supreme Court] got to the last one,” he says, you get the feeling, between the lines that they were trying to send a flare out there: ‘Will you please stop bringing these cases to us? Go figure this out in the political system,’” Miller says.

 

In ERISA cases, “you’re back into what’s the deeming clause, versus what’s the ‘but for.’ It’s not pretty jurisprudence. I really don’t think the Supreme Court is crazy about taking up any more ERISA cases, because they’re tired of them. Don’t underestimate their ability to control their docket and not take up stuff they don’t want to take up.”

 

Schiffbauer agrees that the Ninth Circuit is “an outlier that kind of goes in different directions sometimes.” But other courts do the same given the right issue, he says. “Sometimes, appellate courts want to weigh in on sexy national issues by going in an opposite direction of another Circuit so it has to go up to the Supreme Court,” he says.

 

If the Ninth Circuit does split with the Fourth in this case, “I think they would have to [grant cert]. It’s such an issue of national concern,” he says.

 

Supreme Court case?

Alden Bianchi, who helped draft the legislation for Massachusetts’ recent healthcare reform, is certain the Supreme Court would grant cert in case of a split. “If Congress doesn’t do anything, and I’m sure it won’t – you’re dealing with a two trillion-dollar healthcare economy. The opposing forces are just too powerful and too evenly matched for Congress to do anything, meaning, it has to go to Court.” The issue of healthcare is too important for them to ignore, adds Bianchi, who heads the employee benefits and executive compensation practice group for the Boston office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

 

 “The fascinating thing from a political point of view is who will decide what the government’s view is. Presumably with the oral argument in April, the decision will be in the Bush Administration. So the [Supreme] Court might agree to hear a case if it was asked to do so while the Bush folks are still in place,” Borzi says.

 

“Then the question would be when the argument would be scheduled. It’s quite likely the court wouldn’t hear it this Fall, but might hear it next year, in the Spring term,” when the next President is in office, she says.

 

If the case is heard in the Fall, the Department of Labor is expected to file an amicus brief in support of preemption. But if a Democrat is elected and the case is heard next year, DOL’s solicitor general would weigh in against preemption, Bianchi says.

 

The agency’s amicus brief is key, he argues. Supreme Court Justices “tend to give great deference to agency views,” he says. “In something like 90 percent of the cases that have gone up to the Supreme Court, where there has been an agency brief, the court has followed that amicus brief.”

 

Schiffbauer is convinced that if a fair-share case does make it to Supreme Court, the Justices will decide that law is preempted by ERISA. “My guess is they’ve been pretty consistent on the intent of ERISA and pressing forward with [that intent being] uniform administration of benefits.”

 

He can also see the Supreme Court “basically throwing it to Congress, saying, ‘We continue to believe that this is the result that Congress intended in 1974. This is in line with the decisions we’ve been making on ERISA preemptions since Travelers.’ And if folks don’t like it, they’ve go to go to Congress.”

 

Bianchi says it’s not clear what the Court would do. “Anyone who says either, if challenged it will be preempted or if challenged it will not be preempted, is flat out… misinformed,” he says. “The truth of the matter is no one knows. The only people who have a chance of knowing are the members of the Supreme Court.”

 

Would Congress rewrite ERISA’s preemption clause?

Gies doesn’t see Congress amending ERISA anytime soon. “This preemption argument is just really hard. Even if you believe it would be a good thing to let the state governments experiment some more in this area, it’s unlikely with the gridlock that we have, that someone is going to amend ERISA tomorrow,” he says.

 

Schiffbauer doubts Congress will ever even try to change ERISA’s preemption clause for the sake of state healthcare reform efforts. “I think there would be a lot of dead bodies if that happened. The business community finds the ERISA uniformity preemption so important that their main trade associations have formed a coalition to preserve the ERISA preemption.” The group, called the National Coalition on Benefits, uses the slogan, “Don’t Erode What Works to Fix What’s Broken.”

 

The coalition was formed largely in response to the January 2007 introduction of H.R. 506, the Health Partnership for Creative Federalism Act, sponsored by Rep. Tammy Baldwin, a Wisconsin Democrat who has sponsored several other bills to expand healthcare access. This bill would require the federal government to set up a “State Health Coverage Innovation Commission” to encourage states to propose ways to expand and improve, and if necessary, to seek exemptions from implicated federal statutes, including ERISA, to enact those laws.

 

H.R. 506 hasn’t seen action since February 2007. Schiffbauer does not expect the bill to go far. “If it were brought up on the floor today, it would lose terribly. I think the employer community and the insurance community would jump all over it,” he says.

 

The Massachusetts approach

There is one fair-share law that has not run afoul, at least not in the courts, of ERISA’s preemption clause: Massachusetts’ Health Care Reform Act.

 

While Maryland and San Francisco were working on their fair-share laws that emphasized employer mandates, Massachusetts took a different tack by adding an individual mandate. In April 2006, the state legislature introduced a plan to decrease the ranks of the state’s uninsured by requiring that everyone buy health insurance. Those who do are eligible for tax credits; those who don’t lose the credit and are subject to penalties and fines.

 

As part of the plan, Massachusetts would make insurance more affordable by allowing employees to use pretax dollars to buy health insurance, even if their employers did not contribute; and by providing subsidies to lower the cost of premiums for those who earn less than three times the federal poverty level.

 

The bill was the result of two years of negotiations between the Democrats and the Republicans, led by Governor Willard Mitt Romney. By the time it was introduced, it included a feature that Governor Romney threatened to expunge with a line-item veto: an employer mandate. Under it, employers with more than 11 workers would be required to provide them with health insurance or pay $295 for each employee who was not covered.

 

Governor Romney did veto the offending language; but the legislature overrode him. The law, including both the employer and the individual mandate, took effect last July. It is called the Commonwealth Care program.

 

No Challenges Yet

One year later, Massachusetts has reduced the ranks of its uninsured by 169,000. But the state has more uninsured than it thought, and that even though individuals are now required by law to get insurance, the state did not expect so many uninsured to comply so quickly. As a result, the cost of the program is proving much higher than expected. According to a report in The Boston Globe, the state now projects that Commonwealth Care will cost $1.35 billion per year by 2011, compared with the $725 million the state’s legislature expected when it passed the law. (Another snag: with an extra 169,000 insured people seeking doctors’ appointments, some patients are reporting that they have to wait months to be seen).

 

Although it is not yet clear how Commonwealth Care will fund itself going forward, its advocates say the program not in dire straits. “I wouldn’t call the [funding shortfalls] major problems. The Governor appears to be committed to find the money,” says Bianchi, who represented the Romney Administration when the reform was being developed.

 

“Massachusetts health reform, much to the dismay of many is not going away. It is a pretty permanent feature of our state. It’s not like all of its going to be repealed tomorrow,” Bianchi says.

 

What is truly amazing about the law, Schiffbauer says, is that no one has challenged it in court, where he believes it would be held preempted by ERISA.  The lack of a challenge “is a mystery to me,” he says.

 

Mary Ellen Signorille, who specializes in ERISA law as a senior staff attorney for the AARP, says there have been no challenges because the legislature took care to cultivate buy-in as the law was being developed.

 

“When the law was finally negotiated, everybody was at the table,” including small businesses, she says. “If the small business community is at the table and they agreed to it and they are not challenging it then the chances of just an individual person challenging are is pretty small.”

 

There are political reasons too. Pro-business groups were unlikely to challenge the law while Governor Romney was counting on it to help build his resume for a Presidential bid.

 

Then there’s the fear, according to the American Enterprise Institute’s Miller, that any challenge would provoke Sen. Ted Kennedy to push for similar legislation on a national level. Even though few expect such legislation would succeed at this point,  “People didn’t want to poke a stick into the cage at the beast,” Miller says. “Do we need that grief? No.”

 

In the end, Schiffbauer believes these political deterrents were most likely outweighed by the practical: although the state is finding the program’s budget unwieldy, businesses themselves are not feeling much pain. Last year, Schiffbauer met “a person who was actually at the table during the negotiations. …. He said, ‘We all bought in. It’s not hurting financially right now so nobody wants to rock the boat until it starts hurting. Then, maybe.’ ”

 

The cost of compliance is low. Employers who don’t offer health benefits need only pay $295 per employee per year – compared to up to about $300 per month per employee required by the San Francisco ordinance. And though employers would also have to set up plans that allows employees to purchase health insurance with pretax dollars, employers aren’t required to contribute to those plans themselves.

 

“That’s been mostly the strategy or the advice from the legal folks,” says the AEI’s Miller. “If you’re going to have some employer mandate, keep the relative economic pain low enough so you won’t trigger a legal challenge by the business groups. Once you climb up the ladder and make it bigger or real, like six percent of payroll, that type of thing, then you’re back in the world of getting challenged.”

 

Crowd-Out

Looked at from a different perspective, at least some in the Massachusetts business community may support the program because it offers a face-saving exit from the fast-rising costs of private insurance. Before Commonwealth Care, the only way to avoid those costs was to drop insurance altogether, leaving employees uninsured.

 

Now employers can drop their plans, pay their $295 per employee per year and trust that the state of Massachusetts will help their employees find affordable coverage.  “I keep hearing it’s cheaper to just pay the money and let folks go into the public system,” Schiffbauer says. He hasn’t seen any indication yet that any Massachusetts employers are doing this.

 

Bianchi says that while it is technically true that employers could do this, they are not in fact doing so partly because the law’s authors anticipated this phenomenon, called “crowd-out” (as in, the new law might crowd out private coverage).

 

To prevent this, the law includes an “insurance non-discrimination rule” that requires companies who do not self-insure – the vast majority of employers – to offer the same health benefits to each full-time employee, regardless of rank. So while a company could drop its health insurance and pay the nominal fee to send employees into the state-subsidized system, it would have to do so for everyone, from the chief executive down, Bianchi says.

 

The law’s non-discrimination rule doesn’t affect self-insured companies, which usually have at least 1,000 employees. Technically, these companies could choose to strip health benefits from employees of lower rank or seniority, while preserving the benefits for those at the top.

 

But Bianchi doesn’t see this happening because healthcare is part of compensation and affects how employees decide where to work. Employers “offer [health coverage] because the market demands that they do. If they try to take it away it hurts their recruiting,” he says.

 

Bianchi notes that the Massachusetts law serves as the model for proposed legislation around the country. Butt Schiffbauer does not think that the Massachusetts strategy could be replicated, because the other states have larger business communities where at least one member is likely to sue to have the law preempted by ERISA.  “It seems to be unique to Massachusetts,” he says.

 

Tax Credit Approach

Several ERISA lawyers believe that states could make their proposed healthcare reform acts more immune to ERISA preemption by setting them up as tax and credit approaches.

 

“Obviously, I don’t think there’s anybody who would disagree that if a law specifically says to an employer, you must provide this type of insurance to these employees with this benefit, I don’t think anyone would disagree that that pre-empts ERISA,” says the AARP’s Signorille.

 

“But if the state says, there’s a one percent tax on all employers and we’re going to put this in a fund and have a new insurance pool … everybody would probably agree that that is not pre-empted. Taxes are not preempted in ERISA,” she adds.

 

The problem is, states want to reward employers who do offer healthcare, so their attempts at reform include tax credits for those who do. “The problem with the credit is, most of the time the credit requires the employer to show they provide or to pay a certain amount towards health care expenditures. However the statute defines that, once you have to determine by potentially looking at an ERISA plan how much they are paying ... that’s a connection with an ERISA plan. And therefore it’s pre-empted,” Signorille says.

 

This tax and credit system could work without running afoul of ERISA, Schiffbauer says, but it would have to be very general, with no specific requirements about how much or what kind of insurance must be offered. But “proponents of this approach can’t help themselves” and add requirements. “If they would have stuck to a very basic tax code approach, I think they might have been able to get away with it,” he says.

 

Individual Mandates

Of the healthcare reform proposals the Presidential candidates have put forward, Hillary Clinton’s is the most sweeping, since it includes a mandate that every individual purchase health insurance. Clinton argues that this is the only economically viable way to reduce the cost of health insurance, since it would guarantee that healthy people, many of whom are not currently covered, would be added to the risk pool, thus bringing down costs for the average subscriber.

 

It’s not clear how she would enforce an individual mandate. It’s also not clear whether such a mandate is Constitutional.

 

Karl Manheim, a professor of law at Loyola University in Los Angeles, has argued that individual mandates are unconstitutional because they require Person A to give something to Person B, and not for a privilege such as driving a car, but for a Constitutional right, namely being alive and a resident of a state.

 

Mark Tushnet, a professor of Constitutional law at Harvard University, believes that individual mandates are Constitutional. “Under modern doctrine, the answer would be certainly, Yes,” he says. By modern, Tushnet means “post-New Deal, where the notion is that people’s individual choices have to be subordinated to the social good.”

 

It would be easy enough to sidestep this debate, Tushnet says, “if you described it not as buying insurance but paying a dedicated tax. … I’m not designing the statute, but if the statute says, you have a choice, either you buy insurance for yourself or you pay $5,000 extra in taxes to support the emergency health care system that you’ll be using, because you aren’t purchasing insurance, under modern doctrine it would look like you can do that.”

 

Single Payer

Among all the voices weighing in on healthcare reform, very few have openly endorsed the idea of a single payer system, which many economists say would cost a lot less to run than anything based on the current private healthcare system.

 

No one is pushing for single-payer because “of the politics of it, because of the people who have an entrenched financial interest in the current system remaining the way it is, because they profit by the current system which does include various kinds of insurance companies, medical device companies, drug companies, etc.,” Borzi says.

 

“That’s not the only barrier. The American public is not ready for this. People would see that as a radical change, although as a practical matter, it wouldn’t have to be. … I don’t think we can get there from here in one step, which doesn’t mean that over time we couldn’t get there.”

 

In the meantime, “there is the political will to do some kind of marketplace reform” that builds on the current private insurance system, Bianchi says. “Here’s my prediction. Marketplace reform will be adopted, either by state or at the federal level. It’s a safe bet we will get some kind of reform passed. More and more, it’s looking like it will be a Massachusetts clone of some sort.

 

“Then the question is, does it work? That’s the tougher question. That’s the tougher issue.”

 

 

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