Why I No Longer Support the Health Insurance Mandate
Should ObamaCare be overturned by the Supreme Court, insurers have solutions ready to go.
By RON WILLIAMS
Soon the U.S. Supreme Court will rule on the constitutionality of the Affordable Care Act. I am not a lawyer, or an expert on the Constitution. But as the chairman and CEO of a major health plan, I had a ringside seat to the entire health-care reform process. After much reflection, I have concluded that the federal individual mandate, which requires all Americans to purchase health insurance starting in 2014, will not be upheld.
I don't say this lightly, as I have long been a vocal advocate of getting and keeping every American covered. As a society, we have a moral obligation to ensure everyone has access to affordable health care. We must find a way to cover those who are no longer healthy but need care.
A workable solution used by many states is a high-risk insurance pool funded by broad-based taxes. But Congress and the president chose to require health-insurance companies to guarantee issue—that is, to insure anyone at anytime.
This approach encourages people to only purchase insurance when care is needed. Insurance does not work if you only pay two months of premiums and receive hundreds of thousands of dollars of health care. This is the equivalent of getting a free ride. Under such a system, consumers would end up paying more to offset the added costs of free riders. Insurance would soon become unaffordable.
Once the government mandates guaranteed issue, then a second mandate is required for individuals to purchase and maintain insurance. My early support for an individual mandate had always been grounded in this companion solution, supported by broadly funded subsidies for lower-income Americans.
Yet, as I studied the arguments for and against the individual mandate, it became clear to me that the legislation raises serious constitutional concerns.
For starters, the legislative process that produced the Act was driven by partisan politics, and traditional oversight mechanisms that would have facilitated bipartisan and reasoned policy development were discarded in favor of rapid enactment. Several structural flaws emerged as a result. For example, the mandate should have been framed as a traditional tax—a move that could have bolstered the Act's constitutionality.
Most seriously, Congress insisted on describing personal inactivity—in this case, the failure to purchase insurance—as interstate commerce within its regulatory reach. Americans were alarmed, rightly, that this could empower future legislatures to mandate that citizens engage in activities none of us would think reasonable today.
Should the Act or part of it be overturned by the high court, I believe many of the consumer-friendly aspects already implemented will be adopted by the industry or quickly find their way into new legislation.
The federal government should encourage rather than micromanage market reform in all 50 states. Since health care is local, private-sector innovation in conjunction with state-level reform of the individual and small-group markets is a better approach.
But no matter how the Supreme Court rules, we still need bipartisan solutions that work for all Americans. One benefit of the past two years has been the vigorous public policy discussion that we should have had prior to passing the legislation—and a recognition that the core problems are health-care cost and value. Simply put, we must create more value for consumers by improving the quality and long-term affordability of health care.
The private sector is hard at work creating new ways to deliver health care. Health plans are collaborating with hospital systems to develop innovative accountable care organizations that provide physicians with incentives to cooperate and enhance patient outcomes. Hospitals are encouraging physicians to improve the accuracy and quality of patient data, enhancing clinical decision-making to improve the quality of care.
Health plans and employers are cooperating on decision-support tools to help employees better understand their conditions and choices. These tools are making quality and costs more transparent, encouraging employees to make better decisions. Finally, employers are implementing condition-management programs to help employees manage chronic illnesses such as diabetes and hypertension. They are also investing in on-site clinics, value-based health plans to increase medication adherence and incentive-based wellness programs.
As the law continues to evolve, we must not let politics impede our collective efforts to reinvent American health care.
Mr. Williams is a former chairman and CEO of Aetna.