Human Resources News & Insights

Obama: 2 major reform provisions must go if individual mandate is struck down

The Obama administration has argued the majority of the health reform law can stand if its individual mandate to buy insurance is deemed unconstitutional. But it did admit two key provisions would need to get the axe.

They are:

  1. The requirement that health insurance companies accept any individuals regardless of their health status (pre-existing conditions), and
  2. The rule prohibiting insurers from charging individuals higher premiums based on their medical history.

In a brief the Obama administration just filed with the Supreme Court, the Department of Justice (DOJ) explained that the entire healthcare reform law should remain intact, minus these two provisions — even if the cornerstone of the law, the individual mandate, is deemed unconstitutional.

Beginning March 26, the Supreme Court will hear oral arguments to determine three things: a) whether the individual mandate challenges to the law are barred by the Anti-Injunction Act, b) if the mandate is constitutional and c) whether the remainder of the law can stand if the mandate is deemed unconstitutional and struck down.

A ruling is expected by the end of June and could have a major impact on the 2012 presidential election.

One reason the DOJ gave as to why the entire law shouldn’t be struck down if the individual mandate to buy insurance or pay a penalty is: Many of the provisions of the law take effect in the years prior to the individual mandate, demonstrating that Congress intended the provisions to operate independently.

The argument from the National Federation of Independent Business and the 26 states challenging the law’s constitutionality, as reported by Reuters: The belief that the law can stand without the individual mandate is like saying a building can stand after its foundation has crumbled.

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  • Common Sense

    “One reason the DOJ gave as to why the entire law shouldn’t be struck down if the individual mandate to buy insurance or pay a penalty is: Many of the provisions of the law take effect in the years prior to the individual mandate, demonstrating that Congress intended the provisions to operate independently.”

    This is a laughable argument. The reason the mandate was scheduled at different times than other provisions was politically motivated and established in such a way that the “goodies” kicked in first. Other less palatable provisions (the mandate, taxes…) are scheduled to kick in after the presidential election cycle. Very convenient to say the least.

  • ZDLucky

    The provisions are being phased in so that everyone can adapt to the changes as they come up rather than having to change everything all at once. Are we shocked that the provisions are being phased in in a way that is most beneficial to the idea created by the writers of the plan? I don’t think that any government or political party is going to do things that purposefully result in self sabotage. Come to think of it, I don’t think that you or I would intentionally ruin a plan that either one of us put into motion either. Convenient? Maybe – but then, what in politics isn’t?

  • Joanna G.

    Of course, I agree with the above comment. In addition as it always is, the next president (even after 2018) will be blamed for the whole big mess: higher taxes, tighter budget, lack of funds etc.
    No one will understand that bad consequences are because of the legislation passed. And what will save us from the big mess to come?

  • Uncommon Sense

    The argument is not laughable; it’s legal. And the reason the mandate was scheduled at different times was because the bill was much too large and sweeping a change to enact at once. Health insurance companies and employers alike would not have had time to comply without a broad timetable.

  • Marc G.

    I agree with Uncommon Sense, coming from the employers’ perspective. However, one may think that, since Common Sense brought it up, the intermittent implentation of the reform could be politically charged.

  • Common Sense

    @ZDLucky and Uncommon. You ask “Are we shocked that the provisions are being phased in a way that is most beneficial to the idea created by the writers of the plan?” I for one, am not shocked. I expected nothing else after all the bribes, extortion, arm twisting, backroom deals… I am simply stating it is a laughable argument “that Congress intended the provisions to operate independently.” The whole legislation falls apart without the foundation of the mandate.
    Why were the funding and tax provisions left until after the elections? Surely they could have also rammed down those provisions to be implemented quicker with little difficulty (a few more arm twists would have done the trick). The funding provisions would require little to no extra administration from the employer. Just higher taxes from the “greedy” corporations.
    Was it to hide the true cost of Obamacare? To pull one over on the constituents? Why did they want to hide the true co$t so badly. The answer is because they knew they already pushed too far and they knew it was a house of cards that would fall if the American public found out the truth. It was simply dishonest.

  • Joanna G.

    Hello!!! Does anyone remember the idiotic statement Pelosi made? “Let us pass the bill so we can see what’s in it”…. for me it spoke volumes.
    The bill is passed and we started to see what’s in it – lot’s of troubles to come.
    As an employer, but also as an insurance professional and finanical professional, I look at the bill’s provisions and I am truly horrified seeing the consequences of such legislation.
    What is apprarent to me is that Obama wanted to leave his “mark” in history… and indeed it will be quite ‘the mark’

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