It is, sadly, all too common for courts to hand down decisions that are poorly reasoned and wrongly decided. Few decisions, however, present such an immense and undeniable threat to the American people’s welfare as the Eleventh Circuit’s decision striking down part of the Affordable Care Act. If this decision is upheld in its entirety, millions of Americans will lose their health insurance and millions more will lose their ability to purchase insurance altogether.
The reason why is because the court chopped off one leg of the ACA’s “three-legged stool” — the provision requiring most Americans to either carry health insurance or pay slightly more taxes — while leaving in place a provision that cannot exist without such an insurance coverage requirement.
The ACA contains eight titles, nine of which have nothing whatsoever to do with its coverage requirement. This is why Judge Roger Vinson’s lower court decision striking down the entirely law wasn’t just wrong, but embarrassingly so. At the same time, however, there is one provision of the ACA that must not take effect without an insurance coverage requirement in place:
The act eliminates one of the insurance industry’s most abusive practices—denying coverage to patients with pre-existing conditions. 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.
This concern is not simply theoretical. Seven states enacted preexisting conditions laws without also enacting a minimum coverage provision, and all seven stakes experienced sharp spikes in insurance premiums — or worse. Kentucky, Maine, New Hampshire, and Washington each lost most or all of their individual market insurers after those states enacted a preexisting conditions provision without enacting a minimum coverage provision, and the cost of some New Jersey health plans more than tripled after that state enacted a similar law. For a while, there were entire counties in Washington state where it was literally impossible to buy an individual insurance plan, until Washington finally amended its law to eliminate most of the protections for people with preexisting conditions.
Meanwhile, the one state to enact a preexisting conditions provision and an insurance coverage requirement saw drastically different results. In the few years after Gov. Mitt Romney signed Massachusetts’ health reform law, the number of insured fell 60 percent and the cost of individual insurance premiums fell 40 percent.
As ThinkProgress explained on Friday, the fact that the preexisting conditions provision of the ACA depends on the insurance coverage provision is enough to render the insurance coverage provision constitutional. The Eleventh Circuit should have upheld the law in its entirety. By carving out just the coverage requirement and leaving the preexisting conditions rule intact, however, the two judges in the majority revealed that they don’t understand health economics any more than they understand the Constitution.