Lawsuits and Legislation Involved Against the Mandate to Buy Health Insurance

Health insurance coverage is one of the major issues at the core of initiatives to reform the United States health sector. This issue has attracted considerable attention in health reform initiatives because of the relatively high number of uninsured and underinsured people in the country. The United States has a high number of uninsured and underinsured populations despite the increased federal expenditures on health. Recent healthcare reform legislation has sought to address this issue through various ways including the introduction of the mandate to buy health insurance. The mandate is essentially an individual or employer mandate to obtain private health insurance coverage. However, the individual mandate is one of the controversial provisions of the Affordable Care Act and has been the subject of numerous lawsuits. In addition, legislation has been enacted against the mandate to buy health insurance. This paper discusses lawsuits and legislation involved against the mandate to purchase health insurance.

I. History and Background of the Issue
The individual mandate is one of the provisions of the Patient Protection and Affordable Care Act (also known as the Affordable Care Act, ACA, or Obamacare), which was enacted into law in March 2010. Based on the provisions of ACA, the individual mandate is enforceable as a tax and requires Americans to buy health insurance or face a penalty. However, low-income individuals who cannot afford to purchase health insurance are exempted from the mandate to buy insurance. Despite the enactment of the individual mandate into law in March 2010, the issue has a long tortuous history that can be traced back to 1986 when legislation by a Democrat House and Republican Senate was enacted into law (Roy, 2012). The legislation, Emergency Medical Treatment and Active Labor Act (EMTALA), which was signed by President Ronald Reagan, allowed individuals who had lost their jobs to continue purchasing health insurance using the old employer’s group plan. This regulation was the first attempt to enact the individual mandate into health care law. In 1974, President Nixon proposed replacing the single-payer model with the employer mandate. As part of the Comprehensive Health Insurance Plan, all employers would be required to provide comprehensive health insurance plans to all full-time employees. Following concerns that the employer mandate did not address health insurance for the unemployed, Bill Clinton proposed universal health care for all in 1993 based on the concept of managed competition (Roy, 2012).
The employer mandate served as the predecessor for the individual mandate because of its obvious and large problems. First, the employer mandate increased the cost of hiring new employees, which in turn discouraged new hiring and contributed to an increase in the rates of unemployment. Secondly, this mandate forced employers to pay for their employees’ health costs, which essentially increased the costs of operations that were in turn passed down to consumers in the form of high costs of products and services. Third, it failed to address the health needs and coverage of the unemployed. Fourth, it increased the cost of health insurance by insulating consumers from the value of health care, which implied that consumers had no incentive to economize. Finally, the employer mandate resulted in job lock since employees were afraid to leave their jobs because of the likelihood of higher premiums or denial of coverage because of switching plans.
The historical health reform initiatives relating to the individual mandate culminated in its inclusion and enactment into law as part of the Affordable Care Act of 2010. This represented the translation of the individual mandate theory into practice (Hackmann et al., 2015). While the individual mandate was considered necessary to help cover the costs of health care in the United States, it is one of the most politically and legally controversial provisions of Obamacare. The mandate to buy insurance has remained controversial and been the subject of legal battles. According to Hackmann et al. (2015), the individual mandate was at the center of legal challenges to the Patient Protection and Affordable Care Act. The legal challenges on this provision have been fueled by the near-unanimity that it is an egregious infringement of individual liberty (Roy, 2012). Lawsuits and legislation involved against the individual mandate have adopted a partisan approach as Democrats and Republicans argue about this provision, its effect, and legality.
On one hand, proponents of the provision (mostly Democrats) contend that this provision is necessary to cover health care costs in the country while increasing health insurance coverage to many populations of uninsured and underinsured people (Campbell & Shore-Sheppard, 2020). Additionally, these proponents have argued that this provision would help increase enrolment in the individual market and lessen health care costs on the part of the federal government. Moreover, the individual mandate would help keep a higher percentage of younger and healthier people enrolled in the individual market. Proponents of the legislation have also argued that it would help expand access to health coverage for sick people who would otherwise have been priced out of the market or denied coverage (Roy, 2012). On the other hand, many conservatives and Republicans have opposed the individual mandate on grounds that it violates individual liberty. In addition, they contend that this provision is likely to increase premiums. These opponents have increasingly coalesced around the idea of a free-market of health reform.
II. Social Issue Surrounding the Issue and Legal Dimensions
The political and legal controversial opinions regarding the individual mandate have been at the center of legal battles and legislation against the provision. These divergent opinions and arguments have made the individual mandate the least popular yet well-known provision of the Affordable Care Act. At the heart of the controversies surrounding the individual mandate are its social issues and legal dimensions or questions. The social issue surrounding the individual mandate today is the avoidable social burden brought by people who are unable to obtain health insurance coverage. Generally, the individual mandate focuses on enhancing individual responsibility with regard to health insurance coverage. According to Blake (2012), the requirements of individual responsibility that underlies this provision were considered necessary to help avoid challenges or problems associated with the free-rider.
Through enhancing individual responsibility, the individual mandate seeks to avoid the social burden brought by health insurance coverage in various ways. First, the individual mandate seeks to avoid the free-rider problem in which the health care costs for uninsured populations are paid by others. Secondly, this legislation seeks to address adverse selection, which takes place when low-risk individuals choose not to have health insurance coverage (Geruso & Layton, 2017). The free-rider problem and adverse selection would create an avoidable social burden by increasing the costs of health insurance coverage for all Americans. Since the individual mandate addresses the issue of free-rider problem and adverse selection, it helps prevent social burden by increasing the pool of participants who pay health insurance. Additionally, the individual mandate significantly lessens the number of free-riders who obtain health care services without paying in or recognizing the value of health care. Therefore, the individual mandate essentially promotes individual responsibility to obtain health coverage and addresses the increased need to ensure the uninsured receive health care.
The social issue relating to the individual mandate has been at the core of legal dimensions and questions reviewed in Court and in the health agencies. First, the extent to which the individual mandate violates individual liberty has been a key legal dimension and question surrounding this provision. Opponents of the provision have challenged the legality of this provision by arguing that it infringes on individual liberty. In one of the recent court cases, opponents of the individual mandate argued regarding its constitutionality given that it infringes on individual liberty. Judge Carolyn Dineen King noted that since Congress has lowered the individual mandate penalty to zero, legal questions on the legality of this provision are essentially academic since people can decide whether to buy insurance or not as they please (Goldstein, 2019). The determination of the constitutionality of the individual mandate would in turn affect its ability to address the social burden of health insurance coverage, especially among the uninsured population. Recent legal dimensions and questions on the constitutionality of the individual mandate have come at a time when Congress removed the penalty for those who fail to purchase health insurance.
According to Blake (2012), states have challenged this provision on grounds that it is an overreach of the commerce clause powers of Congress. Lawsuits on the individual mandate penalty of the Affordable Care Act represent some of the numerous actions taken by states to alter, oppose, or limit Obamacare. These lawsuits have sought to declare the individual mandate penalty and the entire ACA unconstitutional. In 2018, 20 states filed a lawsuit against the federal government in which they argued that the 2019 repeal of the individual mandate penalty rendered ACA unconstitutional (Keith, 2018). Some states have continued to argue that the individual mandate is unenforceable, inefficient, and ineffective.
Legal dimensions and questions relating to the individual mandate’s constitutionality continue to affect enrolment for health insurance coverage. The United States health sector has two major social groups i.e. those who cannot afford health coverage and those who can afford it but opt to invest their resources in other areas. Since the mandate was geared toward promoting universal coverage regardless of one’s socioeconomic status, legal challenges on its constitutionality affect enrolment for health insurance coverage. Due to these legal challenges, the uninsured experience difficulties in accessing health insurance while people who can afford health insurance opt-out. As a result, society is forced to pick the costs of health care as the health care costs of the uninsured and the poor are transferred to others.
III. Legal Process, Management Strategies, and Management Programs/Policies
At the heart of the legal challenges against the individual mandate is the constitutionality of this provision and the entire Patient Protection and Affordable Care Act. In 2012, the constitutionality of this provision was the legal question in a Supreme Court case. The Supreme Court ruled that the individual mandate was constitutional since it was a tax (Hackmann et al., 2015). In the ruling, the Court held that this provision can be upheld as a tax because it’s effect is to raise taxes on individuals who fail to purchase health insurance. In the split 5-4 decision, the majority held that the individual mandate primarily creates shared responsibility payment, which basically imposes a tax (Williams, 2019). The ruling set the judicial precedence for the determination of court cases on the constitutionality of the provision.
As the provision came into effect, its legality has been challenged in several states. Federal courts have remained split on the constitutionality of this provision and continue to advocate for a review. As previously indicated, 20 states filed a lawsuit against the federal government in which they argued that the 2019 repeal of the individual mandate penalty rendered ACA unconstitutional (Keith, 2018). These numerous cases have shown the obvious split in courts regarding whether the individual mandate is constitutional. The U.S. Court of Appeals for the 5th Circuit recently declared the individual mandate unconstitutional. However, the ruling had a minimal immediate impact on this provision of the Affordable Care Act because Congress had already lowered the penalty to zero.
While legal challenges continue to dominate the implementation of the individual mandate provision, states have adopted various strategies and management policies to address the issue. States have adopted different policies to help create a balance on the benefits and drawbacks of the individual mandate. Hackmann et al. (2015) state that economic theory postulates that mandates can lessen welfare loss emerging from the adverse selection in health insurance marketplaces. However, recent empirical studies on adverse selection show relatively minimal welfare loss. State management programs/policies have sought to reconcile these two contrasting views.
One state that has set a precedence on the individual mandate is the State of Massachusetts, which demonstrates how the provision affects welfare and adverse selection. Massachusetts health reform that came into law in April 2006 served as the model for the Affordable Care Act. The individual mandate law in Massachusetts requires nearly all non-poor residents to either buy a health insurance plan that meets certain minimum coverage criteria or be penalized. By exempting people who earn less than 150% of the federal poverty line from the penalty, Massachusetts’ individual mandate policy ensures that this population is eligible for total premium discounts or Medicaid. Consequently, the enactment of this individual mandate has increased large coverage in the Massachusetts individual market. Unlike ACA’s individual mandate, Massachusetts’ law introduced a health insurance exchange market known as the Commonwealth Choice Program. This market seeks to enhance access to health coverage for consumers in the individual market and small employers. Consequently, the Massachusetts experience is an example of management programs/policies that improve legal disputes on the individual mandate policy.
Apart from Massachusetts, Vermont, New Jersey and the District of Columbia have enacted state individual mandate requirements (Tolbert et al., 2019). These states except Massachusetts enacted such legislation after Congress removed the penalty for failure to purchase health insurance. State policies in New Jersey and the District of Columbia have impacted the legal issue surrounding the individual mandate by the establishment of slightly different requirements. While the two states have reinstated ACA individual mandate penalty, they have included a maximum penalty to the lowest-cost bronze plans. These measures have been enacted to help curb the expected loss of health insurance coverage following the elimination of the individual mandate penalty. California and Rhode have also enacted a state individual mandate policy (Williams, 2019). Under these policies, the two states are among those that have earmarked funds that will be generated from the individual mandate to finance reinsurance programs and other health coverage initiatives.
States’ actions together with the recent ruling by the U.S. Court of Appeals for the 5th Circuit have had significant impacts on the issue of the individual mandate. It is increasingly apparent that states have taken measures to re-introduce ACA’s individual mandate albeit with some changes. Even though the individual mandate was recently declared unconstitutional by this court, the ruling has not prevented states from enacting some form of individual mandate provision and requirements.
IV. Importance of Ethics in Administration of Public Health Agencies
Lawsuits and legislation against the individual mandate have been centered on its constitutionality. In addition, financial factors and public health issues have also played a critical role in these legal challenges, especially in relation to health insurance coverage. Apart from financial factors, morality or ethics has also been at the center of these legal challenges. Some of the ethical issues underlying the individual mandate provision include justice, the common good, and solidarity (The Catholic Health Association of the United States, 2011). With regard to justice, the mandate has sought to promote the fair distribution of health insurance. On the other hand, the common good relates to its ability to ensure the society flourishes as a whole. Solidarity is reflected in the shared responsibility payment brought by the provision, which highlights the significance of addressing health insurance coverage by working together. These factors demonstrate the significance of ethics in the public health regulatory process and in the administration of public health agencies.
Ethics is important in the administration of public health agencies since it forms the foundation for values in the health care system (Sheikh, 2007). In this case, ethics serves as the base for accountability between the public health agency and the public. Public health agencies are held accountable in their processes and activities based on the established set of values. Accountability focuses on ensuring that public health agencies carrying out their activities in a fair manner that safeguards the interests of the public and patient populations. Without ethics, it would be difficult to create a set of values to guide public health work and activities. This set of values in turn creates an atmosphere of trust between the administration and the public. Ethics also plays an important role in the public health regulatory process by promoting fairness. Ethics is essentially the premise upon which regulatory processes in the health sector are carried out with the public’s best interest at heart. Public health regulatory processes should be based on fairness and integrity, which highlight the role of ethics in these processes. For example, future regulatory measures relating to the individual mandate should be carried out with the common good in mind. This would help ensure that the legislation and policies ensure fairness by considering the interests of all stakeholders.
Ethics is also important in the administration of public health agencies and in the public health regulatory process as it promotes professionalism. Incorporating professionalism in public health practice has emerged as a critical factor in meeting the healthcare needs of the public (Slomka et al., 2008). Professionalism will continue to be a major issue in future public health practice because of the changing nature of public health delivery. Technological advancements continue to transform public health delivery processes and initiatives. As technological tools and applications are increasingly adopted in the public health sector, ensuring professionalism in healthcare delivery will continue to be a key factor for effectiveness and efficiency in public health. The need for professionalism and integrity in the administration of public health agencies and public health regulatory process is highlighted by the growing focus on population health, emerging infectious diseases, and the link between socioeconomic status and health. These issues continue to raise moral questions and demonstrate the significance of ethics. Ethics provides the foundation to address the emerging moral questions on these issues and others in public health.
In conclusion, the legal challenges facing the mandate to buy health insurance have proven challenging toward efforts to reform the U.S. health sector. In addition, some states have enacted laws that protect or oppose the mandate to buy health insurance. The lack of a mandate to buy health insurance affects efforts to increase health insurance coverage across the country as only fewer healthy people pay into the health system to counterbalance the costs of caring for the sick. Despite these lawsuits, efforts to mandate the purchase of health insurance remain critical and necessary to expand health insurance in the United States. As evident in this discussion, recent court rulings such as the decision by the United States Court of Appeals for the 5th Circuit continue to affect the individual mandate. However, states have adopted various actions and efforts to enact some form of individual mandate policies and requirements.
References
Blake, V. (2012, November). The Constitutionality of the Affordable Care Act: An Update. AMA Journal of Ethics. Retrieved from https://journalofethics.ama-assn.org/article/constitutionality-affordable-care-act-update/2012-11
Campbell, A.L. & Shore-Sheppard, L. (2020, July). The Social, Political, and Economic Effects of the Affordable Care Act: Introduction to the Issue. The Russell Sage Foundation Journal of the Social Sciences, 6(2), 1-40.
Geruso, M. & Layton, T.J. (2017). Selection in Health Insurance Markets and Its Policy Remedies. Journal of Economic Perspectives, 31(4), 23-50.
Goldstein, A. (2019, December 19). Individual Mandate Ruled Unconstitutional, ACA in Limbo. The Washington Post. Retrieved February 12, 2021, from https://www.washingtonpost.com/health/appeals-court-rules-acas-individual-mandate-unconstitutional-lower-court-to-decide-whether-rest-of-law-can-stand-without-it/2019/12/18/3443fd3e-c03c-11e9-b873-63ace636af08_story.html
Hackmann, M.B., Kolstad, J.T. & Kowalski, A.E. (2015, March). Adverse Selection and an Individual Mandate: When Theory Meets Practice. American Economic Review, 105(3), 1030-1066.
Keith, K. (2018, February 28). State Lawsuit Claims That Individual Mandate Penalty Repeal Should Topple Entire ACA. Health Affairs. Retrieved January 14, 2021, from https://www.healthaffairs.org/do/10.1377/hblog20180228.852626/full/
Roy, A. (2012). The Tortuous History of Conservatives and the Individual Mandate. Forbes. Retrieved February 12, 2021, from https://www.forbes.com/sites/theapothecary/2012/02/07/the-tortuous-conservative-history-of-the-individual-mandate/?sh=7514bd6a55fe
Sheikh, S.A. (2007, January). The Importance of Ethics in Health Care System. Journal of the Dow University of Health Sciences, 1(1), 46-48.
Slomka, J., Quill, B., des Vignes-Kendrik, M. & Lloyd, L.E. (2008). Professionalism and Ethics in the Public Health Curriculum. Public Health Reports, 123(2), 27-35.
The Catholic Health Association of the United States. (2011, July-August). Ethical Perspectives on Health Care Reform – The Individual Mandate. Retrieved February 12, 2021, from https://www.chausa.org/publications/health-progress/article/july-august-2011/ethical-perspectives-on-health-care-reform---the-individual-mandate
Tolbert, J., Diaz, M., Hall, C. & Mengistu, S. (2019, July 17). State Actions to Improve the Affordability of Health Insurance in the Individual Market. Retrieved February 12, 2021, from https://www.kff.org/health-reform/issue-brief/state-actions-to-improve-the-affordability-of-health-insurance-in-the-individual-market/
Williams, B. (2019, February 5). Buy Insurance or Else?: Resurrecting the Individual Mandate at the State Level. Albany Law Review, 82(2), 533-554.