You knew we were lying, why'dya believe us?

Fascinating testimony from Thomas P. Miller of the American Enterprise Institute in his Statement before the House Committee on Energy and Commerce Subcommittee on Health Hearing concerning Texas v. Azar, the Republican AG lawsuit that recently yielded a U.S. District Court ruling that the Obamacare mandate was both unconstitutional and unseverable from the statute as a whole. Miller's analysis focuses on the probable impact on Americans with pre-existing conditions and pretty much tries the usual ecumenical scolding, but now and then he makes some clear points about how badly Congress blew it.

Determining the legislative intent of Congress regarding the role of the individual mandate as it related to the rest of the law is at the heart of the severability component of the Texas v. Azar litigation. The plaintiffs contend that the Findings of Fact included in the ACA statute by the 111th Congress that passed it should be determinative on this point. That Congress essentially said that the individual mandate was essential to the functioning of several other ACA provisions, including protections against exclusions of coverage or higher premium charges for individuals with pre-existing health conditions (hereinafter more commonly referred to as “guaranteed issue” and “adjusted community rating”). Whether or not those “findings” have been borne out in practice or the economic and policy connection was quite as tight as that Congress officially assumed, the plaintiffs are not out of bounds in holding Congress to its past word, and in building on the similar reasoning used by other Supreme Court majorities to strike ACA legal challenges in NFIB v Sebelius and in King v. Burwell.

In other words, if that’s the “story” for ACA defenders, they should have to stick to it, at least until a subsequent Congress actually votes to eliminate or revise those past Findings of Fact already embedded in permanent law.

Whatever the 111th Congress “may” have really intended is far more complex. At best, one might conclude that, in the final analysis, it really aimed to pass whatever surviving, though problematic version of the ACA it could, by whatever legislative and political means would work, and then try to implement it and fix it up later, as needed, as it went along. However, this gap between what was officially said with a “wink” and what actually was the political calculation is far harder to recognize in the courts as official legislative intent.

To be blunt, one of the primary ways that the Obama administration “sold” its proposals for health policy overhaul was to exaggerate the size, scope, and nature of the potential population facing coverage problems due to pre-existing health conditions ACA advocates then argued that the only way to address those problems was with a heavy dose of (adjusted) community rated premiums and income-related tax subsidies, complemented by an individual mandate. Unfortunately, this combination also made the coverage offered in ACA exchanges less attractive to younger and healthier individuals, who were asked to pay more for insurance that they valued less. We ended up with the worst of both worlds, a mandate despised by many (low-risk) individuals that largely failed to accomplish its intended goals. To the extent that net insurance coverage gains still were achieved under the ACA, they were due overwhelmingly to the combination of generous insurance subsidies for lower income ACA exchange enrollees, plus an aggressive expansion of relatively less-expensive (but even more generously taxpayer-subsidized) Medicaid coverage in many states.

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It’s important to remember that the problem of pre-existing condition coverage, before the ACA was enacted and implemented, was limited almost entirely to the individual market. A host of semi-specialized risk pools and other pre-ACA legal provisions already offered various types of such insurance protection to many otherwise vulnerable Americans. Of course, public policy to address remaining problems could and should be improved in other less prescriptive and more transparent ways than the ACA’s tangled web of less-visible regulatory cross-subsidies and income-related premium tax credits (for example, extending HIPAA’s continuous-coverage provisions and risk protections to the individual market).

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Hence, if the ACA’s current, overbroad regulatory provisions involving guaranteed issue, adjusted community rating, and prohibition of coverage exclusions for pre-existing conditions were stricken down in court in the near future as inextricably tied to an unconstitutional individual mandate, there are better policy alternatives available to lawmakers.

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I don’t want to neglect pointing out the disappointing results and collateral damage caused by the ACA’s execution of its stated objectives. Yes, U.S. taxpayers spent more money, or we borrowed it, and millions more Americans were covered with insurance than before while others had their coverage upgraded and subsidized more generously. At the same time, less-visible victims of the ACA lost the coverage they had preferred to keep or had to pay much more for it if they fell outside of the law’s more generously subsidized cohorts. Insurance and health care markets were substantially destabilized for years, although, with enough premium hikes and Silver-loaded subsidy alchemy in the last two years, that’s begun to change. Nevertheless, the overall size of the individual market actually have grown smaller than its pre-ACA levels.