As Robert and Yuval have noted, a federal judge in Ft. Worth, Texas, has opined in Texas v. Azar that the entirety of Obamacare is unconstitutional because Congress zeroed out Obamacare’s individual mandate penalty in 2017. I entirely agree with them that the jurisprudence here is weak. I have a lengthy write-up at Forbes from which I want to highlight a few points here.
First, as I’ve discussed extensively in the past, it’s a Gruberian myth that an individual mandate is required to compensate for Obamacare’s guarantee that insurers offer coverage to those with pre-existing conditions. First off, Obamacare’s individual mandate was too weak to really make a difference. Indeed, the year after Republicans repealed the mandate’s tax penalty, enrollment in Obamacare’s exchanges actually went up, from 10.3 to 10.6 million.
That is to say, Obamacare’s individual mandate is indeed severable from the rest of Obamacare with minimal economic effect.
Second, it’s not Obamacare’s popular requirement that insurers offer coverage to those with pre-existing conditions that creates Obamacare’s cascade of problems. It’s the requirement that Obamacare overcharge healthy people for the privilege of buying insurance.
But again, it’s not the individual mandate that compensates for this “community rating” requirement, but rather the law’s subsidies. Obamacare has a clever system of tax credits to address this problem, for those who qualify: if you’re healthy and being overcharged, the taxpayer is on the hook for the additional premium, not you, so long as your income is in the right bracket to be subsidy-eligible.
Republicans were hammered on the 2018 campaign trail as a result of this court case; they were accused of opposing coverage for those with pre-existing conditions. Their response should be simple: You don’t need the entirety of Obamacare to cover people with pre-existing conditions.
In the lame-duck session, Congress could pass a simple bill, effective in the extremely unlikely event that Obamacare is ever overturned by the Supreme Court, requiring that all individual-market plans offer coverage to everyone regardless of health status, and that insurers offer coverage at the same price to everyone in the same birth year. In this way, they can ensure that coverage for pre-existing conditions is the law of the land regardless of Obamacare’s legal fate.
Obamacare’s supporters know that the pre-existing conditions provisions of the law are its most popular. They take advantage of that fact to associate the rest of the law with those provisions, when in fact that association is unnecessary. Congress has the power to make that clear, whenever it wants to.