Unbiased Analysis of Today's Healthcare Issues

The End of Health Reform Starts in Ohio?

Written By: Jason Shafrin - Nov• 09•11

One of the key tenets of health reform is that insurers cannot charge different premiums to individuals based on their pre-existing conditions.  Under this type of system, the optimal strategy for many individuals is to not buy any health insurance until one gets sick.  Since insurers cannot charge these sicker people higher premiums based on these conditions, healthy individuals will end up heavily subsidizing the sick.  In fact, average premiums will increase for everyone.

To prevent this from happening, health reform instituting an individual mandate which requires every American to buy health insurance.  Without this requirement, health insurance prices could spiral out of control.

Ohio, however, has recently rejected the individual mandate.  The Cato institute that Ohioans came out against the individual mandate on a 2 to 1 basis.

Is this the beginning of the end of health reform?

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2 Comments

  1. Joe Colucci says:

    The Ohio vote is entirely meaningless. The Supremacy Clause of the Constitution means that federal law (like the individual mandate in the ACA), trumps state law. There is a chance that the Supreme Court will overturn the individual mandate, but if so, it’ll be on Commerce Clause grounds–the supremacy point will remain.

    In the event that the mandate is overturned (an event that looks less and less likely, given the balance of appeals court decisions so far), there are any number of ways to fix the insurance market and prevent a death spiral that will pass constitutional muster, and can be enacted before 2014. If the wording was just changed so the penalty became a “tax,” it would be unambiguously constitutional. Other options include a waiting period after open enrollment on the exchanges–i.e. if you choose to forego having insurance, you either can’t get the same subsidies that you would have, or don’t have guaranteed issue/pre-existing condition coverage.

    (Also, looking at the language on the ballot, I don’t even think it’s clear that the amendment would affect the individual mandate as it’s currently written–it doesn’t “compel participation;” rather, it imposes a penalty for failing to buy insurance. I’m not a lawyer, so I might be misreading it, but it seems like a pretty sloppy attempt to undermine the individual mandate. http://www.sos.state.oh.us/sos/upload/ballotboard/2011/3-language.pdf )

    All in all, it was a pretty pointless ballot measure.

  2. Joe Colucci says:

    The Ohio vote is entirely meaningless. The Supremacy Clause of the Constitution means that federal law (like the individual mandate in the ACA), trumps state law. There is a chance that the Supreme Court will overturn the individual mandate, but if so, it’ll be on Commerce Clause grounds–the supremacy point will remain.

    In the event that the mandate is overturned (an event that looks less and less likely, given the balance of appeals court decisions so far), there are any number of ways to fix the insurance market and prevent a death spiral that will pass constitutional muster, and can be enacted before 2014. If the wording was just changed so the penalty became a “tax,” it would be unambiguously constitutional. Other options include a waiting period after open enrollment on the exchanges–i.e. if you choose to forego having insurance, you either can’t get the same subsidies that you would have, or don’t have guaranteed issue/pre-existing condition coverage.

    (Also, looking at the language on the ballot, I don’t even think it’s clear that the amendment would affect the individual mandate as it’s currently written–it doesn’t “compel participation;” rather, it imposes a penalty for failing to buy insurance. I’m not a lawyer, so I might be misreading it, but it seems like a pretty sloppy attempt to undermine the individual mandate. http://www.sos.state.oh.us/sos/upload/ballotboard/2011/3-language.pdf )

    All in all, it was a pretty pointless ballot measure.

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