The Affordable Care Act (ACA) requires most Americans to either carry insurance or pay slighty more income taxes for a simple reason. The act also forbids insurance companies from denying coverage to patients with preexisting conditions, and this ban cannot function if patients are free to enter and exit the insurance market at will. If patients can wait until they get sick to buy insurance, they will drain all the money out of an insurance plan that they have not previously paid into, leaving nothing left for the rest of the plan’s consumers.
There is also a ton of evidence proving this point. Seven states attempted to protect people with preexisting conditions without also enacting an insurance requirement, and it ended in disaster. Kentucky, Maine, New Hampshire, and Washington each lost most or all of their individual market insurers, and the cost of some New Jersey health plans more than tripled after that state enacted a similar law. A couple of states had slightly less awful results, but they still saw premiums shoot up between 15 and 20 percent immediately after their laws went into effect. Massachusetts, by contrast, enacted a law much like the ACA, and its premiums declined by 40 percent.
Moreover, this essential link between the two provisions is more than enough to justify the insurance coverage requirement under the Constitution. As conservative Justice Antonin Scalia explains, “where Congress has the authority to enact a regulation of interstate commerce,” such as a law protecting people with preexisting conditions, “it possesses every power needed to make that regulation effective.”
Which is why one of the most bizarre aspects of an incredibly bizarre Eleventh Circuit argument yesterday was the fact that the acting solicitor general faced a bevy of questions forcing him to cite more and more specific studies proving that the insurance coverage requirement actually is necessary to thwart disaster. Consider this exchange between Katyal and Judge Frank Hull:
KATYAL: What Congress found was that you couldn’t ban preexisting condition discrimination…without a minimum coverage provision. They had eight states that tried to do this, and ban these forms of discrimination.
HULL: And that’s because the insurers left that state and left that market? [...] I tried to find a study in the record by an economist — anybody — that tries to analyze the national market based on whether insurers will or will not leave the market. There did not seem to be a study in the record on that point, is that correct?
KATYAL: Well, I think that there are several studies. The American [Association of People] with Disabilities brief shows that, for example, that when the seven states reformed the insurance markets without a minimum coverage provision the insurers did leave the states. And Congress made a specific finding saying that the Massachusetts experience worked precisely because it coupled the insurance reforms to the minimum coverage provision.
It’s not entirely clear what Judge Hull is getting at here, but if she is suggesting that the many studies showing that state insurance markets strain until they break without an insurance coverage requirement aren’t enough for her court to simply accept that fact and move on, than she is departing wildly from decades of settled law. As the Supreme Court has said time and time again, Congress does not have to prove by utterly incontestable evidence that its economic regulations are justified; it only has to prove that its economic assumptions aren’t completely irrational. A pile of studies showing the impact of health care regulations in the states are more than sufficient to clear this very low bar, as should be a CBO study finding that premiums would spike substantially if the court sides with the plaintiffs.
Moreover, there are is a very good reason why courts are not supposed to second-guess Congress’ economic policy assumptions except in the most extreme and absurd cases. Members of Congress are elected; judges are not. Both supporters and opponents of the ACA were able to muster an army of economists supporting their position on this law. Someone has to make the call as to which side is right, and that someone will either be an elected official accountable to the public, or it will be an appointed judge with lifetime tenure.
If the Eleventh Circuit decides that Congress’ judgment wasn’t good enough, it will not only be a massive departure from settled law, it will be a minor coup wrestling power away from the voters and giving it to three officials in black robes.