Supreme Court Chief Justice John Roberts answered* a question posed by this column last November: If Congress can require individuals to purchase retirement insurance - i.e., Social Security - why can it not require individuals to purchase health insurance?
Roberts' opinion, rendered in National Federation of Independent Business v. Sebelius, is that Congress can't compel individuals to purchase health insurance. But, the opinion says, government can penalize individuals who don't purchase insurance under the government's power to tax.
The Patient Protection and Affordable Care Act thus can impose a "shared responsibility payment" on individuals who decline to purchase health insurance under the "individual mandate" to take effect in 2014.
The opinion implicitly points to a key difference in government requirements for individual retirement planning and health planning. With Social Security, the government operates the plan. With the Affordable Care Act, members of Congress resisted a "public option" of a government managed health insurance plan that would have extended existing Medicaid/ Medicare programs.
It is noteworthy that the one provision rejected in Roberts' opinion is the alternative to the public option, a mandate on states to expand their Medicaid programs or face withholding of all federal assistance. Under the opinion, states may choose to not expand Medicaid eligibility without facing a threat of loss of all federal assistance. But the decision leaves uncertainty for a portion of working Americans whose incomes maintain them above poverty levels but fall short of covering additional costs of health insurance.
Americans caught in that income gap will find little sympathy among ardent critics of the Affordable Care Act, who impose a simple-minded solution of individual responsibility on all income issues: If you aren't making enough to pay your bills, you need to work harder and smarter.
It's ironic that those who hold individuals responsible for their income levels are opposed to holding individuals responsible for covering the costs of health care.
As Roberts notes, the shared responsibility standard is based on a finding that those who lack insurance and are unable to pay for medical services shift those costs to those of us who are paying.
"Everyone will eventually need health care at a time and to an extent they cannot predict, but if they do not have insurance, they often will not be able to pay for it," he notes.
Since state and federal laws require hospitals to provide care regardless of ability to pay, hospitals caring for uninsured patients must recover the losses with higher charges to patients who are insured and can pay - or receive government/taxpayer assistance. Roberts notes other issues as well, such as the requirement on insurance companies to accept individuals without regard for pre-existing conditions without charging the individual patient more - which shifts the costs to all clients of the insurer.
"By requiring that individuals purchase health insurance the (individual) mandate prevents cost-shifting by those who would otherwise go without it," Roberts says. "In addition, the mandate forces into the insurance risk pool more healthy individuals whose premiums on average will be higher than their health-care expenses. This allows insurers to subsidize the costs of covering the unhealthy individuals the reforms require them to accept."
With Social Security, all workers and their employers are required to contribute to a single public insurance fund from which individuals who become eligible through disability or age can expect to collect for their lifetime. Not everyone who contributes lives to collect.
With the Affordable Care Act, all individuals will be required to pay into private insurance funds, which will allow competition among managers of those private funds in setting premiums and services. How that will affect costs remains to be determined.
* The Supreme Court opinion is at supremecourt.gov/opinions/11pdf/11-393c3a2.pdf.
* Edwin Tanji is a former city editor of The Maui News. He can be reached at firstname.lastname@example.org. "Haku Mo'olelo," "writing stories," is about stories that are being written or have been written. It appears every Friday.