Mandate in health law not requisite?

Fallback eyed if court voids rule

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Opponents of President Obama’s health care overhaul law are cheering a Virginia federal court’s ruling this week that one of its core provisions is unconstitutional. They may not realize that Mr. Obama has a fallback option that also could do the job.

Even if the Supreme Court ultimately agrees that government cannot require individuals to carry health coverage, the Obama administration could borrow a strategy that Medicare has used for decades to steer consumers into new insurance groups.

Medicare’s coverage for doctor visits is voluntary and carries a separate premium, yet more than nine in 10 older people sign up. The reason is simple: Those who opt out when they first become eligible face a lifelong penalty that escalates the longer they wait.

The same kind of penalty could be incorporated into the health care overhaul to replace its current mandate that all those who can afford a policy must get one. It would be a stiff nudge to enroll healthy people who are potentially reluctant. That’s needed to help keep premiums affordable, because the law takes away the ability of insurers to turn away sick people.

Even if the approach doesn’t work as well as for Medicare, it could provide a strong incentive.

“It wouldn’t be a nirvana solution,” said health policy consultant Chris Jennings, but “it’s better than nothing.” A Democrat, Mr. Jennings served as a senior health care adviser to President Clinton and Hillary Rodham Clinton in the 1990s when they unsuccessfully pushed for coverage for all.

Mr. Jennings thinks the law as written would cover more people for a lower cost, but says “it would be irresponsible not to try an alternative” if the courts reject it as currently configured.

Other prominent experts say Medicare’s way could be more effective.

That’s because the fines that back up the health care law are relatively low. When the individual coverage requirement takes effect in 2014, many people might still come out ahead by ignoring it. The fines they’d face could be lower than the premiums they would have to pay.

It’s a “mandate lite,” said economist Gail Wilensky, who ran Medicare for President George H.W. Bush. “A modification of what is done with seniors on Medicare would be a much more powerful tool. You don’t have to buy insurance. But if you don’t, the first time you come in, we’re going to add a penalty that you’ll have to pay for the next four or five years.”

The White House has insisted the law will be vindicated and that there’s no need for a fallback plan.

Nonetheless, the decision by U.S. District Judge Henry E. Hudson, a Republican appointee in Richmond, Va., was the first successful challenge to the new law. Judge Hudson ruled that Congress exceeded its constitutional authority to regulate interstate commerce by requiring individuals to obtain health insurance, whether through an employer or a government program or by purchasing their own policy.

The judge denied Virginia Attorney General Kenneth T. Cuccinelli II’s request to strike down the law in its entirety or block it from going into place while the administration appeals. It could take a couple of years for the case to reach the Supreme Court.

Democrats were late to accept the idea of an individual health insurance requirement - one of the law’s least popular provisions. Most liberals still favor a government-run plan modeled on Medicare.

Requiring individual responsibility was the GOP alternative during the 1990s health care debate. Most Republicans have now abandoned it as big-government intrusion, but Ms. Wilensky said she has no problems with the concept.

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