“They haven’t done any checks since March of 2020 so everyone has been able to keep their coverage for that entire period without having to renew,” said Laura Colbert, Executive…
By Ben Nanes
With a decision by a federal district court in Virginia today that a key provision of the new health care law is unconstitutional, contradicting two previous rulings from other courts, it appears that the law may well be headed to the Supreme Court, at least eventually. The point of contention is whether or not the government can require people to purchase health insurance. Beginning in 2014, the new law requires people who have not purchased health insurance to pay a tax penalty. It also offers subsidies intended to make insurance affordable for almost everyone.
Though the provision has met with some legal scrutiny, most healthcare economists have argued that it is essential for making the private health insurance market work. Without it, people who are healthy may simply decline to purchase insurance, only doing so when they are sick and know that they will need medical care. This causes the cost of insurance to rise, prompting more healthy people to leave the risk pool and driving costs higher, resulting in the cycle of sharply rising costs and diminishing accessibility visible in the individual insurance market today.
If the provision is eventually struck down, it’s not clear how access to care can be expanded while continuing to rely on a private health insurance marketplace. Without the ability to require health insurance one way or another, there will really only be two options. Either accept the status quo, a more or less successful market for large employer-based health insurance with a dysfunctional individual insurance market that excludes a large segment of the population, or shift to a healthcare system that doesn’t depend on insurance.
Ben is an MD/PhD student at Emory University and the editor of the HealthSTAT blog. His opinions are his own.