If Federal Mandate Struck Down, State Mandates May Follow

What will happen to state health insurance programs if the mandate to purchase health insurance or pay a fine is deemed unconstitutional by the Supreme Court?

 

The mandate is the centerpiece of the Patient Protection and Affordable Care Act (ACA). Without the mandate, insurers will not generate enough premium revenue to pay for the services the law requires. It's possible the Supreme Court will strike down the mandate without striking down the requirement that insurers cover all comers. Such a ruling would put the individual states and insurance companies in a bind.

 

One solution discussed by many states is a state mandate to purchase health insurance. J. Lester Feder, health reporter for Politico, quotes the Kaiser Family Foundation's Larry Levitt: "I think there would a big push at the state level by the insurance industry to get mandates in place."

 

Feder explains the difficulties states will face if the federal mandate is ruled unconstitutional:

 

[L]awmakers in the states opposing the federal mandate might face intense pressure from local insurance companies to pass state mandates if the Supreme Court doesn't also strike down the rules preventing them from charging more or denying coverage to sicker people. Insurers could frame a choice for these lawmakers: Either embrace the individual mandate or watch us close shop in your state because we can't make a profit.

 

For those who need insurance, however, state mandates present problems. The ACA mandate came with subsidies, so the poor could afford to purchase the required coverage. Unless state mandates also come with subsidies, many people required to purchase insurance will not have the means to do so.

 

Under the Health Care Compact, states would be free to create their own solutions to health insurance problems, paid for through block grants for Medicaid and Medicare.