Three Barriers To An Individual Mandate

Virginia is poised to become the first state to make illegal an individual mandate for health insurance, and this highlights just one of three possible problems Congress may have in implementing an individual requirement to buy health insurance.

As my colleague already has pointed out, if Congress passes health reform with an individual mandate, there could be a constitutional challenge under the Commerce Clause.

Virginia’s action is another hurdle. On March 10, the State’s House of Delegates passed H.B. 10, a bill, previously passed in the state Senate, outlawing individual mandates. Gov. Bob McDonnell has indicated he will sign the legislation.

The bill states that no state resident "shall be required to obtain or maintain a policy of individual insurance coverage." In addition, H.B. 10 states that no resident shall be "liable for any penalty, assessment, fee, or fine as a result of his failure to procure or obtain health insurance coverage."

In response to current national health reform proposals, at least 35 other states have begun legislative action to restrict or ban an individual mandate, according to the National Conference of State Legislatures.

Whether such a state challenge to a federal law can be sustained is in much dispute. On the one hand, the Constitution's federal supremacy clause appears to indicate that when federal and state law conflict, federal law takes precedence. Nevertheless the Supreme Court has upheld Oregon’s right to die law in the face of federal opposition.

Is Compliance The Highest Hurdle?

However the biggest hurdle to the individual mandate may be compliance. The Senate health reform bill, H.R. 3590, does impose penalties for not purchasing health insurance, but the legislation also lets those who do not pay the penalty off the hook:

“In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure” (Sec. 1501(b) of H.R. 3590).

In a review of all three possible barriers to the individual mandate, Timothy S. Jost writes in the New England Journal of Medicine,

“It is possible that the federal government will eventually conclude that it is not possible to enforce the individual mandate for health insurance. But if individuals successfully resist accepting responsibility for being insured, there will be no way of expanding affordable coverage in a system that depends on private insurers. If government funding of health care must therefore be increased, it may not be the result resisters want.”