OBAMACARE: Q&A with Stanford Professors Michelle Mello and Michael McConnell


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Obamacare Questions – Answers with Stanford professors Michelle Mello and Michael McConnell.

Elena Williams, Editor-in-Chief

On Dec. 14, 2018, Texas Judge Reed O’Connor ruled that the Affordable Care Act (ACA), commonly known as Obamacare, was unconstitutional and thus invalid. If the decision is upheld, it will change the face of public health for years. Two Stanford law professors, Michelle Mello and Michael McConnell, weigh in on the legal basis of the ruling and the ACA. Click here to read the full article.

Michelle Mello is a professor of health law, policy and research at Stanford University. As a leading scholar in the field, she has published more than 150 articles and book chapters about health policy, often appears in the New England Journal of Medicine, and has earned several accolades.

Q: Do you agree with Judge O’Connor’s ruling?

A: No.  I think the judge got it wrong.  Legal scholars of all ideological stripes agree on that – even those who don’t love the ACA as a policy.

Q: What is your personal opinion on the ACA (on its legal or political merits)?

A: It’s not the plan that most health policy experts would recommend as the best way to get everyone insured and make sure there is access to high-quality, affordable care.  But I believe it’s the best plan that was politically feasible, and that it has made millions of people’s lives better by improving their access to insurance and preventing harmful business practices in the insurance industry, such as pre-existing condition discrimination.  I support the concept of an individual mandate. If you don’t want companies to be able to deny or price coverage on the basis of pre-existing conditions, then you have to have a system where people can’t just wait until they get sick to buy insurance. That leads to adverse selection and a “death spiral” that destroys the insurance market.  I would favor stronger measures to ensure that people buy insurance; the tax penalty was actually very modest – and now it’s gone.

Q: Do you foresee an end to Obamacare, or do you think that the appeals process will more likely overturn the decision?

A: Every legal expert I know believes the decision will be overturned.  I also do not foresee Republicans in Congress reviving their efforts to end Obamacare with legislation.

Q: Do you believe that any other provisions in the ACA might also come up for contention?

A: I am always surprised by the creativity of the legal challenges that continue to be brought, so who knows?But there are no obvious avenues left open that I can see.

Q: How will the end of enforcement of the individual mandate will affect patients and insurers?

A: As I suggested above, if it results in a lot of healthy people deciding not to buy insurance, we could see higher premiums for those that do. Without healthy people in the risk pool, there are fewer people to spread costs and on average, each person in the pool costs the pool more (because they are sicker).  The question is how many fewer people will opt out because of the lack of the penalty. It was such a modest penalty to begin with, I think what will primarily determine that is not the absence of the penalty, but the price of insurance. If it’s cheap enough, most people will want to buy it — penalty or no penalty.

Q: Do you feel that the legal debate over the ACA has become more of a political issue than a legal one?

A: I think it always has been more of a political debate than a legal one.  The Supreme Court’s decision about the constitutionality of the individual mandate and the Medicaid expansion were very surprising to legal scholars.  Those weren’t areas of law where there was roiling debate before the litigation.

Q: What do you think is the biggest problem in the healthcare system? Do you think the ACA is addressing it?

A: I think the biggest problem is the prices we pay for healthcare services, from hospital care to prescription drugs.  The ACA did a good job of extending insurance coverage, but did much less to bring prices down.

Q: What measures should the U.S. take to improve its healthcare system?

A: One of the most important things we could do is further reduce fee-for-service reimbursement to healthcare providers, which creates incentives to provide more care than we really need.  We could also introduce more price transparency in the system so consumers and health plans can do a better job of comparison shopping.

Q: What do you see for the future of the ACA?

A: In the near term, the Administration may continue to chip away at it.  Over the long term, I think it will become further embedded in the fabric of our social policy.  People will continue to get used to having it and to like having its protections. And I hope we will be able to build on it further.

Michael McConnell is the director of the Constitutional Law Center at Stanford University, the Richard and Frances Mallery Professor and a former judge on the Tenth Circuit Court of Appeals. He has argued 15 cases before the Supreme Court and has held many professorships at prominent law schools.

Q: I read your opinion piece in the Washington Post where you indicated that the argument against the constitutionality of the individual mandate was highly flawed. Can you elaborate on why that is?

A: In my opinion, the district court confused a congressional decision to render the mandate toothless with unconstitutionality. A 0% tax is not unconstitutional; it is just toothless. The reason Congress deemed the rest of the statute inseparable from the mandate was a matter of economic reality, not of form. It was Congress’s decision to reduce the rate to zero, not any alleged unconstitutionality, that renders those provisions ruinous to insurance markets.

Q: Are there any other parts of the ACA that could be declared unconstitutional or that you believe could come up for contention?

A: Not other than those the Supreme Court already held unconstitutional, namely the Medicaid expansion.

Q: Does the issue of severability in the ACA pose a serious issue for those hoping to preserve the other provisions in the law other than the individual mandate? / If the mandate is struck down, do you foresee that the rest of the ACA will be invalidated as well?

A: Yes. Severability is the only threat to the other provisions, which are not unconstitutional in themselves. But I do not think the remainder of the ACA will be invalidated, for the reasons I have already given.

Q: Did Congress’s decision to set the tax of the individual mandate to zero change the severability of the other provisions?

A: I don’t think so. Severability is triggered when a court invalidates a portion of a statute on constitutional grounds, not when the legislature amends the statute.

Q: Do you feel that the debate over the ACA has become more of a partisan issue than a legal one?

A: It has been more of a partisan issue than a legal or health care policy issue from the beginning. The statute was poorly conceived and badly drafted, for the partisan reason of avoiding a second vote in the Senate.

Q: You indicated in the article that you thought the case would not make it to the Supreme Court. Has that changed since then because of the ruling and the political pushback? Do you expect a lengthy appeals process?

A: No. I think it likely that the Fifth Circuit Court of Appeals will reverse the district court’s decision, and that the Supreme Court will deny review.

Q: What do you see for the future of the ACA?

A: Its fundamental problems are economic, not legal. Prices will continue to go up, coverage will continue to go down, people will continue to abandon the system, and eventually Congress will have to step in.