Harvard Law & Policy Review

affordable care act

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The Moral Foundations of the Insurance Mandate

By Tina Rulli*

Republicans’ new plan to replace the Affordable Care Act ditches the health insurance mandate, the requirement for individuals to purchase health insurance or pay a penalty. Instead, their American Health Care Act favors tax credits to incentivize people to purchase insurance.

There are many vantage points from which to assess the health insurance law, including legal, economic, and public health perspectives. My focus is on the moral foundations of the individual mandate, in part, because Republicans have taken moral umbrage at it as an instance of government overreach inconsistent with respect for individual liberty. Moral concerns should and do motivate public policy.

What Republicans fail to see is the moral logic behind the insurance mandate. We have a moral obligation to purchase health insurance because our hospitals and clinicians have a legal duty to provide emergency and acute care to people regardless of ability to pay based on the Emergency Medical Treatment and Labor Act (EMTALA). In 2013, the cost of uncompensated care was a whopping $84.9 billion.

When others have a duty to rescue, a duty to provide aid to those in serious need, individuals can incur obligations to lower the potential costs of rescue. This is a familiar duty: knowing that park services will provide costly tax-payer funded rescue if a mountaineer gets lost, mountaineers have an obligation to mitigate the risks they take by staying on well-traveled paths and out of avalanche areas and by carrying a GPS that makes them easily locatable. In 2011, when an 8.9 magnitude earthquake hit Japan, California surfers were warned to stay out of the path of the resulting tsunami. This was not just out of concern for their wellbeing, but also for the safety of their potential rescuers. When others have a duty to aid, we can incur obligations to mitigate the burden of rescue to them and others.

One might argue that we should drop the provision of free emergency and acute health care. But truly imagine what this would entail. Clinicians would be required to stand back while a car accident victim without health insurance bleeds to death, even though they could administer a simple life-saving blood transfusion. This is inconceivable in a compassionate and minimally decent society. We do not think that one owes one’s life for lack of insurance, whether due to personal negligence or financial hardship. Further, requiring clinicians to deny care would be a great burden to them. Compassionate clinicians, out of their own sense of decency and their allegiance to an ethical code that requires promotion of patient welfare, could not stand back and watch a person needlessly suffer or die.

Perhaps the stalwart moral libertarian would say: “You cannot mandate that I buy insurance, given that I am willing to refuse your free emergency care.” But $84.9 billion dollars in uncompensated costs suggests that such consistent moral libertarians are mythical beasts. People who fail to buy health insurance overwhelmingly accept free emergency and acute care in their time of need.

In short, there is a moral justification for the insurance mandate that the Republican plan overlooks. The moral foundation is an important component in rationalizing good policy to the public. Tax incentives send the wrong message: treating the purchase of health insurance as optional, rather than as a duty of reciprocity for a compassionate health care system that will not allow the most vulnerable to suffer or die for lack of insurance. Surely, conservatives can agree to holding people responsible for participating in a cooperative system whereby some people incur burdens in order to benefit others. This is the paradigm of individual responsibility. It was their idea in the first place.

For related reading, see here and here.

*Tina Rulli is an Assistant Professor in the Philosophy Department at the University of California, Davis.

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The ACA is working – and there is no replacement

By Jonathan Gruber, MIT*

One of the most contentious public policy issues of the early days of the Trump Administration is the future of the Affordable Care Act (ACA). President Trump and congressional Republicans decry the law as a failure and say that it must be repealed and replaced with something better. This line of argument is problematic in two different ways. First, the claim that the ACA is a failure is wrong. Second, there is no replacement that does not significantly worsen the U.S. health care system.

The ACA has accomplished the three main goals it set out to achieve. First, the law has significantly reduced the number of uninsured Americans (by about 20 million, according to latest estimates). Second, the law has stabilized a broken individual insurance market. Before the ACA, individuals without insurance from their employer or the government were subject to a discriminatory market where they could be denied insurance based on their health, or charged more based on their health or gender. The ACA ended this discrimination, bringing millions of uninsured into the new market. Third, the ACA has contributed to the most dramatic health care cost slowdown in measured U.S. history.

Such a positive assessment may strike some as odd given rhetoric to the opposite effect, but such rhetoric is subject to an important fallacy. Republican criticism compares the ACA to a perfect world, not to the world that it replaced. Consider, for example, premiums in the ACA health insurance exchanges. Much attention has focused on the fact that last year these premiums rose by 22 percent, on average. But there has been little focus on the fact that premiums were far below expectations when the law went into place, so that on net premiums are below where they would have been on average without the law. Relative to a world without the ACA, we are now a nation with higher insurance coverage and more stable and lower cost insurance markets.

That’s not to say that the ACA is perfect – far from it – but it is important to note that the ACA represents an improvement over the world that preceded it. And, more importantly, it is much better than current alternatives posed by Republicans.

While there are a number of alternative “replace” plans, all share three features. First, they significantly weaken the insurance market anti-discrimination protections of the ACA. Millions of individuals who now have access to insurance at prices independent of their health will suddenly see their coverage become unavailable or unaffordable. Second, these plans make insurance much less affordable for low-income Americans. Most proposals remove the Medicaid expansions that made insurance accessible for the first time to millions of low-income Americans, and all proposals replace the income-based tax subsidies of the ACA with universal flat tax credits that don’t vary with income. This means that low-income families will have to pay enormous shares of their income to afford insurance, while rich families get a flat tax credit that they don’t need. Finally, the plans repeal the tax increases on the wealthy that were used in part to finance the ACA.

The bottom line is that Republican alternatives make insurance unavailable and unaffordable for the lowest income and sickest Americans, while providing new benefits and tax breaks to the richest Americans. The result will be a dramatic reduction in insurance coverage in the U.S. among our most vulnerable citizens. This is not a “replacement”. This is a catastrophe.

*Prof. Jonathan Gruber is a professor of Economics at the Massachusetts Institute of Technology as well as the director of the Health Care Program at the National Bureau of Economic Research. Prof. Gruber was a key architect of both the 2006 Massachusetts health care reform and the 2010 Patient Protection and Affordable Care Act.

 

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Solicitor General Don Verrilli: What We Stand For

I was fortunate to be a part of many great moments, in and out of the Supreme Court’s chambers, during my tenure as Solicitor General in the administration of President Obama. But of all the great moments, the one that means the most to me occurred at the end of a grueling three days of oral argument in the historic Health Care Case, when I spoke these words:

The Medicaid expansion that we are talking about this afternoon and the provisions we talked about yesterday, we have been talking about them in terms of their effect as measures that solve problems, problems in the economic marketplace, that have resulted in millions of people not having health care because they can’t afford insurance.

There is an important connection, a profound connection, between that problem and liberty. And I do think it’s important that we not lose sight of that. That in this population of Medicaid eligible people who will receive health care that they cannot now afford . . . there will be millions of people with chronic conditions like diabetes and heart disease, and as a result of the health care that they will get, they will be unshackled from the disabilities that those diseases put upon them and have the opportunity to enjoy the blessings of liberty.

And the same thing will be true for a husband whose wife is diagnosed with breast cancer and who won’t face the prospect of being forced into bankruptcy to try to get care for his wife and face the risk of having to raise his children alone. And I can multiply example after example.

In a very fundamental way, this Medicaid expansion, as well as the provisions we discussed yesterday, secure the blessings of liberty. And I think that that is important as the Court’s considering these issues that that be kept in mind.

As I made that statement, the Affordable Care Act appeared to be hanging by a thread. The argument a day earlier on the constitutionality of the Act’s so-called “individual mandate” had not gone well at all. Hostile questions came at a furious pace, and my handling of them had ignited a vortex of public criticism. Overnight, conventional wisdom had congealed around the prediction that the Court would strike down the mandate, and with it the market reforms that would have made affordable health care available to millions of Americans whose pre-existing conditions had locked them out of the health insurance market. As devastating as that would have been, by the time the last day of argument had drawn to a close, the Act’s prospects appeared even bleaker. Earlier that day, during questioning about “severability” (i.e., if the Court declared the mandate invalid, how much of the rest of the Act would fall with it?), a majority of the Justices seemed poised to wipe out the entire Act—the Medicaid expansion that offered the prospect of affordable health care to tens of millions more Americans, the Medicare reforms, everything.

I am under no illusion that my closing statement made the difference on the Court’s ultimate decision. At that point, I wasn’t trying to offer a finely calibrated argument designed to sway one Justice or another to my side. Rather, with the Affordable Care Act hanging in the balance, I thought the moment demanded a statement, in the clearest possible terms, of what was at stake.

Throughout the three days of argument, those challenging the Act had laid claim to the mantle of liberty. As the argument drew to a close, they appeared to have succeeded in framing the case as a contest between the liberty protected by the Constitution’s guarantee of limited government and the handiwork of out-of-control policy wonks who sought to displace private choice with oppressive bureaucratic diktat (that is why the so-called “broccoli horrible” was so effective; it captured precisely this sense of things). I could not let that stand. The Health Care Case did not ultimately pit claims of liberty against claims of policy expertise. At bottom, it was a case about what our Constitution means when it speaks of “securing the blessings of liberty.” Do we secure liberty solely by restraining the federal government’s power or may the government use its allocated authorities to create the conditions that make it possible to enjoy liberty’s blessings? I was consciously evoking a conception of liberty that stretches back at least to the New Deal and FDR’s Four Freedoms. I hoped that doing so would help our case by reinforcing the salience of the settled jurisprudential understanding that, within wide margins, it should be up to the politically accountable branches to work out the right balance between these dueling conceptions of liberty. But if we were to lose, it was imperative that there be no ambiguity about what that loss would signify, both for our jurisprudence and for the lives of so many Americans. Fortunately, a majority of the Justices agreed with our understanding of the Constitution, and thousands of people (inside the government and out) then put their shoulders to the wheel to make the promise of affordable health care a reality for tens of millions of Americans.

Of course, the Constitution speaks not simply of securing the blessings of liberty but of doing so “for ourselves and our posterity.” As I write these words, the blessings of liberty that the Affordable Care Act secures once again appear to be hanging by a thread—threatened this time by the prospect of legislative repeal once Donald Trump assumes the presidency. So this moment too demands clarity.

As high as the stakes were in 2012, they are higher now. Should the Congress and the new President take the fateful step of dismantling the Act now that it has gone into effect and done so much to improve the lives of so many Americans, they will have much to answer for. They will have to answer for ending life-saving treatment for mothers with breast cancer who will die without that treatment and leave behind grieving children and spouses; for ending ongoing care that makes it possible for those with diabetes, heart disease and other chronic conditions to live full lives and avoid the ravages that these conditions would otherwise inexorably inflict; for extinguishing the guaranteed availability of preventive care that would ensure that children never develop such debilitating conditions in the first place. Just as important, they will have to answer for upending the financial and emotional security that the law’s very existence provides to millions of Americans; to parents who thought that they would never again have to worry that, if anything happened to them, their children with conditions like multiple sclerosis would be unable to get the care they need to live a full life; to entrepreneurs who left a secure job with employer-sponsored health care to pursue their dreams, thinking that they could rely on the Act’s guarantee of insurance to protect their families; and to so many others who would otherwise live one serious illness or accident away from financial ruin.

What a cruel irony to tell these millions of Americans (and their children and spouses) that extinguishing their access to affordable health care will restore their liberty. And the irony is obviously not lost on those rushing to repeal the Act. That is why they go on and on about “high risk pools,” “health savings accounts” and other policy fig leaves that in the real world have never come close to covering over the yawning chasm in coverage that their actions will restore, and that they will never fund at levels sufficient to allow more than a tiny fraction of those now covered to stay covered—and that don’t even purport to offer anything at all to the more than 10 million poorer Americans who now receive care as a result of the expansion of Medicaid. They know full well how implausible it is to justify such consequences as the price that must be paid to vindicate their conception of liberty. So they deny and distract instead.

If there is a glimmer of hope, it lies in these efforts to deny the obvious. For they reveal the power of what we stood for—of what we stand for. The Affordable Care Act proves that we as a people were able to summon the imagination, the ability, and the will to make access to good health care a right for virtually all Americans, and that we were able to do so while respecting the limits that the Constitution places on government to protect the liberty of all. Like any undertaking of this magnitude, it requires some adjustments to ensure smooth functioning over time. But the reality is that the Act is now providing affordable health care to tens of millions of people who did not have it before. To strip these Americans of the prospect of a full life freed from the shackles of debilitating disease (and to snatch away from many thousands the chance to continue to live at all) would make a mockery of the constitutional promise of the blessings of liberty.

Whatever comes next, the reality of what we did will always stand as a beacon to those who come after us. We have secured at least that much to our posterity. And for the moment one can hope that when those in the democratically accountable branches of government who seek to extinguish the right to affordable health care are forced to come face to face with the grievous and completely preventable harms that their actions will inflict on so many of their fellow citizens, they will be moved to think differently than they now do about what it means to secure the blessings of liberty.

 

Mr. Verrilli served as Solicitor General of the United States under President Obama from 2011 to 2016. He previously served the Obama administration as Associate Deputy Attorney General and Deputy Counsel to the President.

The courtroom artist rendering at the top of this post shows Mr. Verrilli, speaking before the Supreme Court. (Associated Press/File).

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Technology Development Needs a Culture of Adaptation

By Sam King*

Bad technology is pervasive, but it doesn’t have to be. Healthcare.gov’s initial problems threatened to derail the Affordable Care Act and took a tremendous effort to fix. The Department of Veterans Affairs (VA) has 98,000 disability claims that have been in a backlog for over 125 days, partly because the technology wasn’t adapting to changing needs. The Mars Climate Orbiter crashed because NASA used metric units and Lockheed Martin used English units. Because of many issues like these, technology developers have come up with different cultural narratives about why problems happen and how to prevent them.

One narrative blames change and tries to control changes using policy. An organization with this cultural narrative would have a process for each part of software development and would make detailed plans and requirements so that no change is unexpected. However, requiring Lockheed Martin to use metric units doesn’t mean they’ll do it. Technology development is full of uncertainty and complexity, so the best laid plans often go awry.

The other narrative accepts that change is inevitable, meaning technology developers should adapt to change. An organization developing technology with this cultural narrative would focus on teaching principles like humility, flexibility, and accountability to its employees and clients. The Centers for Medicare & Medicaid Services (CMS) got healthcare.gov working after its initial failure by being flexible enough to try new things when their established processes didn’t work.

Embracing change rather than blaming it is scary. It means taking problems one day at a time and admitting that it’s impossible to control everything. A cultural change like that is hard, but as the VA’s backlog shows, waiting too long to change is risky. Thankfully, many in government are already taking the leap.

One key place for this change is in software development processes. CMS encourages technology projects to follow its Expedited Life Cycle (XLC) framework. I only bring up the XLC because of my time working on healthcare.gov and other CMS projects. It isn’t unique. There are similar frameworks across both the public and private sectors.

The XLC focuses on process and planning rather than adaptability. This framework is well intentioned: many software failures are attributed to changing requirements, and it’s reasonable to think that planning, documentation, and reviews would reduce last minute changes. However, the requirements often change anyways because there is so much uncertainty and complexity in technology development. That is why adaptability is so important. The XLC was not designed to support adaptation, and it acknowledges that change is difficult within its process. According to the XLC details, once a document gets to the “baseline” phase, “It is possible but usually difficult to change.” This is a problem because many documents are supposed to be baselined or finalized before implementation of the system even starts, which makes it difficult or impossible to both follow the process and adapt to changes during implementation. A technology development process should make change easy, not difficult.

Lightweight frameworks like agile development are often touted as solutions, but the XLC guidelines for agile projects aren’t enough to guide an organization on how to adapt to change. Talking to users, testing every change, and releasing code weekly would each help a project deal with complexity and uncertainty, but none of those practices made it into the agile XLC guidelines. On the other hand, with the right culture, technology developers would use practices like those even if the process didn’t explicitly require them. That’s why, when an organization wants to get better at technology development, it should give cultural principles at least as much focus as processes.

An organizational culture that adapts to change could center on a few guiding principles:

  • Be humble. The first attempt at anything will likely go poorly. The product might not be what the user needs, so show users the product frequently. The code might be buggy, so use automated monitoring and testing. Releases might have errors, so release code early and often.
  • Be flexible. The requirements and architecture will change, so plan one week at a time, design systems to be easy to change, and fix processes that get in the way.
  • Be accountable. No one is perfect. People should feel empowered to point out problems, to admit when they’re the cause, and to take initiative in making a fix. Similarly, organizations need to reward accountability rather than punishing mistakes.

Culture is not a monolith, and there is no silver bullet that will fix all these problems, but there is cause for hope, not cynicism. Many organizations are humble, flexible, accountable, and focused on adapting to change. City governments are working with Code for America. Federal agencies like CMS are working with new groups. 18F is delivering technology for government projects and is making technical infrastructure more flexible. The US Digital Service is improving technology policies and publishing recommendations like the US Digital Services Playbook. These groups set an example that we should all strive to follow. The technology development culture is changing one organization at a time.

 

* Sam King is a computer scientist who has worked at for profits, non profits, and government subcontractors. This article draws primarily on his experiences at Google and healthcare.gov.

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King v. Burwell: Following the Law

By Professor Erwin Chemerinsky*

If not for the deep ideological divisions surrounding the Affordable Care Act, there would be no doubt that those who purchase insurance on exchanges created by the federal government should receive tax credits.   In King v. Burwell, Chief Justice Roberts and Justice Kennedy transcended the partisanship surrounding the law and joined Justices Ginsburg, Breyer, Sotomayor and Kagan in following Congress’s clear intent:  those who qualify economically may receive tax credits when they purchase insurance from exchanges, whether those exchanges are created by the federal or state governments.

Prior to the Affordable Care Act, approximately 50 million Americans were without health care coverage.  The goal of the law was to make sure that almost all Americans had some form of health insurance.   For the poorest among us, the Act required that states receiving Medicaid funds provide coverage to those within 133% of the federal poverty level.

For those above the poverty level but without adequate resources to buy insurance, the Act creates tax credits.  To facilitate the purchase of health insurance, the Affordable Care Act establishes health care “exchanges,” where individuals can purchase competitively priced coverage.

The Act provides that “[e]ach State shall … establish an American Health Benefit Exchange.”  Congress, though, cannot constitutionally compel states to enact laws.  So the Act also provides that if a state does not “elect” to create an exchange, the federal government “shall establish and operate such exchange within the State.”

To make health insurance affordable, the Act provides a federal tax credit to low- and moderate-income Americans to offset the cost of insurance policies. The act provides the credit to individuals who enroll in a health plan “through an Exchange established by the State.”

The problem, though, is that only 16 states have established exchanges.   In the other 34 states, the exchanges are created by the federal government pursuant to the Act.  The IRS promulgated regulations making the tax credit available to qualifying individuals who purchase health insurance on both state-run and federally facilitated exchanges. The IRS rule says that credits shall be available to anyone “enrolled in one or more qualified health plans through an Exchange.”

There is no doubt that Congress intended that those who qualify economically should receive tax credits, whether the insurance is purchased from a state or a federally created exchange.  The law specifically says that the federal government is to create “such exchange” if the state does not. Most important, the Court stressed that Congress’s clear purpose was to make tax credits available to those who otherwise could not afford health insurance

In fact, denying such tax credits would almost surely collapse the health care exchanges created by the federal government and maybe all of them in the country.  If individuals could not get tax credits and purchase insurance, the risk pools of the exchanges would be significantly altered.  A Rand Study has estimated that costs of health insurance in the federally-created exchanges could increase by as much as 47 percent if these individuals no longer could participate because of the lack of tax credits.  Many then would be priced out of being able to afford health insurance on the exchanges, which would further limit the risk pools and create a spiral that would collapse these health insurance exchanges.

The Court rightly said that Congress surely could not have intended to give states the ability to collapse the Affordable Care Act by refusing to create health care exchanges.   Chief Justice Roberts concluded his majority opinion by declaring: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”  That is exactly what the Court did in upholding tax credits for all who purchase insurance.

It is easy to focus on this case as purely a question of law as to how a federal statute should be interpreted.  But that would ignore the crucial human dimension of this case:   millions of people will continue to have access to health care because of this decision.  Lives will be saved and suffering will be lessened.  This is exactly what Congress intended.

 

*Dean and Distinguished Professor of Law, Raymond Pryke Professor of First Amendment Law, University of California, Irvine School of Law