Plaintiffs challenging the constitutionality of the Patient Protection and Affordable Care Act scored a big win this week when a Virginia judge ruled that the law’s individual mandate violates the Commerce Clause. But that may not matter in the long run, thanks to an opt-out clause the Medicare program has had in place for decades.
Although Medicare coverage is voluntary, more than 90 percent of seniors enroll. That’s because those who opt out start accruing a lifelong penalty that kicks in once they do enroll.
Adopting a similar penalty structure could provide the same impetus to participate in the insurance pool slated for 2014. The healthcare reform act’s requirement that Americans who can afford it buy health insurance is the focus of nearly two dozen legal challenges around the country.
Opponents of the mandate won a round Dec. 13, when Judge Henry Hudson of the U.S. District Court for Virginia ruled it unconstitutional. The U.S. Dept. of Justice vowed to appeal and the case is likely to make it all the way to the Supreme Court, but even if the Supremes uphold Hudson’s ruling, the Medicare opt-out model could keep the individual mandate viable, experts from both sides of the aisle told The Associated Press.
“It wouldn’t be a nirvana solution [but] it’s better than nothing,” said health policy consultant Chris Jennings, who was a senior healthcare adviser for the Clinton administration. “[I]t would be irresponsible not to try an alternative” if the courts reject the individual mandate.
"Sixty-five-year-olds are more risk averse than younger people," Jennings said. "If you are 65, you are not going to take the risk of being uninsured for a year. Someone who is 24, 28, or 32, would be more likely to take that risk."
Economist Gail Wilensky, who ran Medicare for President George H.W. Bush, told the AP that the opt-out option could prove even more effective than the individual mandate, which would implement relatively low fines — meaning they could be lower than the insurance premiums the policy is designed to promote.
“A modification of what is done with seniors on Medicare would be a much more powerful tool. You don’t have to buy insurance. But if you don’t, the first time you come in, we’re going to add a penalty that you’ll have to pay for the next four or five years," Wilensky said, adding that the law’s current structure is a “mandate lite.”
“As a society, we have made a commitment not to let people die in the street because of lack of medical care,” she told the AP. “It’s not unreasonable to say that people be required to carry some sort of coverage.”
