The Patient Protection and Affordable Care Act — better know as healthcare reform — will probably survive challenges to its constitutionality pending in several courts across the country, according to one legal scholar.
Sara Rosenbaum, chairwoman of the Dept. of Health Policy at George Washington University’s School of Public Health and Health Services, writes in the New England Journal of Medicine that the healthcare reform act satisfies two key legal criteria involving the Commerce Clause of the U.S. Constitution, making its consitutionality “incontrovertible.”
Citing Judge George Steeh of the U.S. District Court for Minnesota’s dismissal of one of the challenges to the law, Rosenbaum writes that it meets one requirement for constitutionality because the healthcare market is a nationwide system.
“As Judge Steeh noted, the health care market is unlike any other market, because there is no way that ‘living breathing beings’ can opt out of it,” Rosenbaum writes. “Everyone needs health care at some point, and thus all of us are market purchasers, however reluctantly. How individuals buy health care is fundamentally a matter that affects the health care system nationwide.”
The law also satisfies a second test: “Congress must intervene in a manner that rises to the level of a broader regulatory scheme,” she writes.
“Health care reform represents just such an intervention, offering a comprehensive redesign of the U.S. health insurance market. The law fundamentally transforms health insurance from a product designed to preserve profitability in the face of rampant adverse selection to a regulated industry whose long-term strength and stability are essential to the public interest and that, in its restructured form, will therefore take on certain characteristics of a public utility,” according to Rosenbaum, who goes on to list five reasons the law is constitutional:
- The ACA transforms health insurance into a public accommodation. “The Civil Rights Act barred private businesses such as hotels, bus companies, and restaurants from refusing to sell their products or services to customers on the basis of race. The ACA bars state-licensed health insurers from refusing to sell products to individuals on the basis of health status. This prohibition, which bars rescissions — the canceling of policies of people who become ill — and which applies at both the point of initial sale and the point of renewal, is binding on health insurers nationwide, regardless of whether they sell their products in the open market or through state health insurance exchanges. This basic reconceptualization of health insurance as a good whose availability is a matter of national public interest essentially frames health insurance the way the Civil Rights Act framed other business interests.”
- The ACA establishes minimum national standards governing the design of health insurance. “In all insurance markets, these standards include bans against excessive waiting periods and against the imposition of annual and lifetime coverage limits, a requirement to cover preventive services with no cost sharing, and a requirement to cover routine medical costs associated with participation in clinical trials. In the individual and small-group markets, design regulation reaches further, specifying a minimum level of coverage for “essential health benefits” and limits on exposure to out-of-pocket costs for those essential benefits. Equally important are new rules that, according to a strategy of measuring the medical loss ratio (the proportion of money collected in premiums that is actually spent on medical care), position the industry for greater price regulation as a result of increased transparency of cost increases and their justifications.”
- The ACA creates a nationwide system of health insurance exchanges. The law encourages states to establish and operate their own exchanges but guarantees access to a federally administered exchange in states that elect not to do so. Health insurance sold through exchanges will be subject to “qualified health plan” requirements, which are aimed at ensuring not only the integrity of coverage, but also, by stipulating that each plan’s provider network must be adequate, the availability of affordable health care itself.
- The ACA establishes a uniform, national subsidy system that ensures Medicaid coverage for the poorest Americans. It also creates “advance tax credits for insurance premiums for individuals and families who are not eligible for Medicaid but have low-to-moderate incomes. States, of course, participate in Medicaid on a voluntary basis, but all participating states will be required to extend coverage to newly eligible individuals, just as many previous Medicaid reforms have created new mandatory categories of beneficiaries. In this case, the new expectations are accompanied by considerable new funding.”
- The ACA uses the platform of uniform, stable financing to begin to change health care itself, on a nationwide basis. “The law provides for a major investment in primary care through an expansion of federally qualified health centers. This investment is coupled with a series of health care cost-cutting measures, as well as the establishment of national frameworks for quality improvement and public health and prevention, as well as pilot and demonstration projects that aim to improve the quality and efficiency of health care for the entire population over time.”
“The fundamental goal of the ACA is no less than the preservation of the U.S. health care system,” Rosenbaum concludes. “In a country that depends on health insurance to finance care, preservation cannot happen without a comprehensive regulatory scheme that reaches from coast to coast and sets the minimum rules of market entry and operation for health insurers. The glide path to this new system is long and complex, but the law’s end point is clear and visionary, and its constitutionality — at least in this first round — is incontrovertible.”