The Individual Mandate and the Affordable Care Act: An Economic, Legal and Political Analysis

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Table of Contents

Introduction
History and development of the Individual mandate
The Constitutionality of the Individual mandate
Conclusion
Works Cited

Introduction

The individual mandate is a provision contained in the Affordable Care Act legislation signed in March 2010. Generally, the individual mandate provision stipulates that all U.S. citizens and lawful inhabitants should have an eligible healthcare coverage.

The regulation also holds that for those who fail to acquire and maintain an eligible healthcare coverage, they are liable to a penalty of $695 for each member of the family uninsured.

However, the provision has some exemptions including economic or financial constraints, unrecorded immigrants and religious foundations. In addition, these exemptions would include uncovered individuals for a period of less than three months (Farley, 2010, p. 50).

In addition to the penalty on the individuals who do not obtain the coverage, there are also penalties for the employers who do not cover their employees.

The implementation and enforcement of this directive is under the mandate of The Internal Revenue Service (IRS). The individual mandate also gives some exemptions to the people in prison or incapacitated in a particular way (Manchikanti et al, 2010, p. 38).

Following the enactment of the Affordable Care Act, the provision of individual mandate became a controversial aspect of this enactment. The initial proposal of the individual mandate produced heated debates among the politicians, business people, policy makers as well as religious institutions.

These debates saw people change their perception concerning the issue and others standing firm with their decision. For instance, Mitt Romney, who enforced individual mandates in Massachusetts merely two years before the enactment of the proposal did not accept and support nationwide individual mandate (Schares, 2008, p. 17).

The core of the constitutional challenge of the Affordable Care Act rests in the provision of the individual mandate. Consequently, the issue has drawn various critics and oppositions from members of the public, policy makers, business people as well as politicians. In particular, the issue is very complex for the ordinary American citizens to absorb on a personal level (Farley, 2010, p. 50).

Besides the constitutionality of the individual mandate, many scholars, thinkers and the media focused on the ability of the mandate to attain the goal of ensuring coverage for all Americans. Advocates of the mandate asserted that such an individual mandate was essential for attaining universal insurance coverage.

On the other hand, those opposing the development of the individual mandate argued that its enactment would be an insult to individuality and personal freedom. They also argued that this mandate would be very expensive and unnecessary (Hoffman, 2010, p. 9).

This paper will seek to analyze the history and development of individual mandate, paying close attention to the reasons of its development as well as the opposition it received. The paper will also provide an analysis of the constitutionality of the individual mandate. It will also offer a conclusive argument asserting that the individual mandate is constitutional.

History and development of the Individual mandate

The debate on the individual mandate started far off before its enactment. Candidates for the presidential election also used it as a bait to lure votes.

For instance, Secretary of State, Clinton, recommended an individual mandate as the focus of her health reform strategy during her presidential campaign. She asserted that the reason for her support of the individual mandate was the elimination of the free rider aspect in health insurance.

She deemed that this was achievable if the system could include young and healthy people. In addition, her proposal comprised a plan to extend Medicare services to cover people not insured. Moreover, her recommendation depicted a tax subvention for small businesses and families. Her proposal also included a system of checking the businesses who do not offer coverage (Wulsin & Dougherty, 2009, p. 15).

Since the individual mandate gained overwhelming support from some key personalities including Governor Romney and presidential aspirants Clinton and Edwards, this proposal became very popular. In addition, the proposal of the individual mandate gained much support from key policy makers and many policy analysts.

During the proposal development, several states also supported the individual mandate. For instance in Illinois, a task force mandated with developing health reform proposals advocated for the individual mandate.

In addition to this taskforce in Illinois, other supporters from Pennsylvania viewed the individual mandate as a mandatory provision. Moreover, some business associations also supported the provision of the individual mandate claiming shared responsibility (Walter & Alex, 2009, p. 8).

Health reforms in some states were also very significant in the development of the individual mandate in healthcare. One such health reform was that of Massachusetts in 2006, which was the first reform invented for attainment of collective healthcare coverage. One of the major significant features of this reform was the provision of individual mandate (Wulsin & Dougherty, 2009, p. 21).

Despite its overwhelming support by some presidential candidates as well as some states and policy makers, there were still those opposed to its proposal.

Particularly, the mandate lacked support from various democratic policymakers and some labor consumer associations. These groups asserted that the provision of the individual mandate should not extend to the national level. These groups also argued that the imposition of individual mandate would only benefit people with substantial incomes (Walter & Alex, 2009, p. 8).

During his presidential campaigns, Obama did not haul support for the provision of individual mandate in the healthcare reform. As part of his centerpiece for health reforms, he proposed a strategy of parental coverage, which would ensure the coverage for all children.

He also asserted that the freshly instituted public strategy of tax subsidies coupled with the development of a National Health Insurance Exchange (NHIE) would attain universal coverage. He was particularly reluctant to support an individual mandate until all individuals would be in a position to afford coverage (Wulsin & Dougherty, 2009, p. 15).

Despite much pressure and opposition from some groups, it is evident that there were significant benefits that prompted the proposal of the individual mandate.

The rationale of the mandate is that it is the only means through which young and healthy people can obtain coverage thus cross subsidizing the elderly and unhealthy. Devoid of the mandate, the Affordable Care Act would leave the mandate completely inseverable from the rest of the law (Farley, 2010, p. 51).

The individual mandate serves to attain three major goals. These include expanding health insurance coverage, to eradicate favoritism by health condition in the sale and continuance of health insurance and to increase the affordability of insurance coverage. All these goals would be unachievable without the individual mandate.

This is because most individuals would have the tendency of obtaining health coverage only when they deem that they require healthcare services. In addition, the individual mandate would ensure equality in the sense that it would pool even those individual who have substantial low costs in to the coverage.

The ultimate effect of this aspect is that it would reduce the average cost per individual covered and consequently reduce premiums (Buettgens et al, 2010, p. 2).

The other reason that prompted for the development and inclusion of the mandate in ACA is that it helps in enhancing justice, cohesion and eventually, the common good. In addition, the individual mandate is essential in protecting insurance firms against adverse selection. This is the uneven coverage in insurance plans of individuals with higher-than-average health risks (Hamel & Nairn, 2011, p. 89).

Contrary to what many opponents of the mandate would think, the individual mandate does not control or restrict the economic activity of offering health insurance. In addition, the provision of the individual mandate does not control or restrict the economic activity of offering health care by individuals, doctors or other medical institutions.

Rather, the purpose of the individual mandate is to control and eliminate inactivity in the provision of healthcare and coverage. This implies that contrary to popular belief by opponents of the mandate, it does not endeavor to control or restrict any activity; rather it regulates inactivity (Barnett et al, 2009, p. 5).

From its proposal and even after its enactment, the individual mandate continuously faces much opposition from politicians, business owners, employers and some policy makers. The majority of these oppositions claim that the issue of individual mandate does not correlate with the constitutional provision of basic individual rights and freedoms.

Most opponents also claim that the mandate would make people incur extra expenses against their will and wish. Cynics on the right suspect the governments interference to guarantee that every American has health coverage and with augmented control ensure greater government regulation of private medicine and private health insurance (Wulsin & Dougherty, 2009, p. 13).

Opponents of the individual mandate often question the efficiency, fairness and cost implications of the provision. Some opponents deem that the provision of individual mandate as a way to expand healthcare coverage is not implementable. Other opponents also claim that imposition of the individual mandate is unfair to people who feel that they do not require healthcare coverage.

In addition, they claim that individual mandate would force some individuals to buy insurance coverage even if they cannot afford. Some critics also argue that the individual mandate is not necessary in health care reforms since it does not reduce insurance costs (Schares, 2008, p. 17).

However, although opponents claim that the provision will incur serious cost implications, it is evident that it can level a persons expenditure for health care over an extended period.

This is because there is a tendency of Americans to spend large sums of money for medical care that even sometimes they become bankrupt or have financial hardships. The individual mandate would help solve this problem in that a person can receive health care and pay for it in the future (Hoffman, 2010, p. 31).

Opponents of the individual mandate also claim that its implementation would impose approximately 46 million uninsured people in to the fragmented market. This would affect these uninsured individuals in two major ways. Firstly, the individual mandate would transform all these uninsured people into policyholders or insurance customers.

The second impact to these uninsured people is changing them in to financiers of the care of other people. This would occur because the mandate would cause these people to spend more for insurance compared to what they use in healthcare (Hoffman, 2010, p. 19).

There is no concrete foundation of the claim by opponents that the individual mandate will make some uninsured individuals financiers of other people. On the contrary, the individual mandate would help to solve a shared action problem involving numerous states since it tackles a free rider problem that overflows from one state to the other.

The free rider problem occurs when a financially stable individual refuses to obtain coverage and free rides on goodwill. In addition, even in instances when the uninsured individual does not receive required healthcare, he or she benefits from the developed healthcare infrastructure and uses it when there occurs an emergency.

This means that the provision of an individual mandate to acquire health insurance coverage helps to eliminate risk taking in dependence on benevolence (Siegel, 2011, p. 6).

Legal disagreement to the mandate focuses on its constitutionality, that is, whether the Commerce Clause in the U. S. Constitution gives Congress the power to oblige individuals to engage in commercial operations against their willpower. As a result, many opponents of the individual mandate view it as an attack and breach of personal freedom (Hamel & Nairn, 2011, p. 88).

However, opponents of the individual mandate fail to admit that the same constitution advocates for ensuring universal health for all its citizens. This universal health mandate by the federal government is vital for the health of all individuals regardless of their capabilities.

Other critics deem that the system becomes unjust when it becomes mandatory for individuals to purchase healthcare insurance that they cannot afford. Particularly, it would be very unfair to force low-income people to purchase insurance cover.

They also claim that even though the government might offer subsidies to these low-income individuals, the problem remains with the lower-middle income class who are not eligible for subsidies.

Opponents assert that individual mandates would force the lower-middle income individuals to redirect funds from more basic needs (Schares, 2008, p. 28). Conversely, these opponents should realize that health is a basic need of every individual and should take preeminence. When people are not healthy, then they cannot perform other duties.

The Constitutionality of the Individual mandate

From its initial proposal, the overriding debate concerning the legality of the individual mandate is its support from the commerce clause. Opponents of the mandate claim that the commerce clause does not support the individual mandate rendering it unconstitutional (Siegel, 2011, p. 15).

Soon after the enactment of the individual mandate, opposition was very strong that 13 states filed proceedings challenging the constitutionality of the provision. From that time of the initial lawsuits, several other states have followed that direction of challenging the constitutionality of the mandate (Hamel & Nairn, 2011, p. 88).

Even though there are several criticisms concerning the constitutionality of the individual mandate, it remains an integral aspect of healthcare reform in U.S. It is evident that most Americans spend a lot of money in medical care that even leaves them bankrupt. In addition, there are those low and middle-income individuals, who are often susceptible to more severe health problems.

In most cases, these individuals solicit for funds to pay for healthcare, which may sometimes be very stressful and complex. Provision of the individual mandate would ensure that these people get affordable coverage, which would help them in such cases.

The opponents of the individual mandate claim that there is no provision in the constitution that grants power to the congress to compel individuals in performing a commercial act without their consent and choice (Barnett et al, 2009, p. 3). Even though this is true, the constitution also stipulates that it is the role of the federal government to ensure affordable healthcare for all U.S. citizens.

The provision of individual mandate would ensure that all individuals receive health insurance coverage. In addition, the provision would ensure equity, which is a core provision in the constitution, through eliminating the free rider aspect. The provision of the individual mandate is an essential part of the healthcare system that would ensure fulfillment of the rights of every individual to have access to affordable healthcare.

Conclusion

The issue of the individual mandate has been subject to heated debate as it is the most controversial provision in the Affordable Care Act. Proponents of the mandate claim that it is essential to ensure universal coverage and avoid the free rider aspect. On the other hand, opponents of the mandate claim that the provision is not constitutional.

They deem that it does not correlate with the provisions of freedom and rights of individual stipulated in the constitution. In addition, they claim that the commerce clause does not support the mandate. However, it is evident that universal coverage and access to affordable healthcare for every individual should precede the issue of individual freedom. It is therefore possible that the Supreme Court will render the issue of individual mandate constitutional.

Works Cited

Barnett, Randy et al. Why the Personal Mandate to Buy Health Insurance Is Unprecedented and Unconstitutional. 2009. Web.

Farley, Matthew. Virginias Response to the Patient Protection and Affordable Care Act. International Journal of Challenging Supremacy 45 (2010): 37-80. Print.

Hamel, Ron & Nairn, Thomas. The Individual Mandate: A Rancorous Moral Matter. 2011. Web.

Hoffman, Allison. Oil and Water: Mixing Individual Mandates, Fragmented Markets, and Health Reform. American Journal of Law & Medicine 36 (2010): 7-77. Print.

Manchikanti, Laxmaiah et al. Patient Protection and Affordable Care Act: Reforming the Health Care Reform for the New Decade. Journal of Pain Physician 14 (2011): 35-67. Print.

Matthew, Buettgens et al. Why the Individual Mandate Matters: Timely Analysis of Immediate Health Policy Issues. 2010. Web.

Schares, Sarah. Health Care Reform: An Examination of the Case for Individual Mandates. 2008. Web.

Siegel, Neil S. Free Riding on Benevolence: Collective Action Federalism and the Individual Mandate. 2011. Web.

Walter, Zelman. & Alex, Melamed. Politics and Policy in State Health Reform. 2009. Web.

Wulsin, Lucien. & Dougherty, Adam. Individual Mandate: A Background Report. 2009. Web.

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