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Why does Obamacare have an individual mandate?

Justice Ginsburg’s concurring opinion in the Obamacare Supreme Court decision has a good summary of why Obamacare has an individual mandate.

Congress knew that encouraging individuals to purchase insurance would not suffice to solve the problem, because most of the uninsured are not uninsured by choice.1 Of particular concern to Congress were people who, though desperately in need of insurance, often cannot acquire it: persons who suffer from preexisting medical conditions.

Before the ACA’s enactment, private insurance companies took an applicant’s medical history into account when setting insurance rates or deciding whether to insure an individual. Because individuals with preexisting medical conditions cost insurance companies significantly more than those without such conditions, insurers routinely refused to insure these individuals, charged them substantially higher premiums, or offered only limited coverage that did not include the preexisting illness.2

To ensure that individuals with medical histories have access to affordable insurance, Congress devised a three-part solution.

  • First, Congress imposed a “guaranteed issue” requirement, which bars insurers from denying coverage to any person on account of that person’s medical condition or history.3
  • Second, Congress required insurers to use “community rating” to price their insurance policies.4 Community rating, in effect, bars insurance companies from charging higher premiums to those with preexisting conditions.

But these two provisions, Congress comprehended, could not work effectively unless individuals were given a powerful incentive to obtain insurance.5

In the 1990’s, several States—including New York, New Jersey, Washington, Kentucky, Maine, New Hampshire, and Vermont—enacted guaranteed-issue and community rating laws without requiring universal acquisition of insurance coverage. The results were disastrous. “All seven states suffered from skyrocketing insurance premium costs, reductions in individuals with coverage, and reductions in insurance products and providers.”6

Congress comprehended that guaranteed-issue and community-rating laws alone will not work. When insurance companies are required to insure the sick at affordable prices, individuals can wait until they become ill to buy insurance. Pretty soon, those in need of immediate medical care—i.e., those who cost insurers the most–—become the insurance companies’ main customers.

This “adverse selection” problem leaves insurers with two choices: They can either raise premiums dramatically to cover their ever-increasing costs or they can exit the market. In the seven States that tried guaranteed-issue and community rating requirements without a minimum coverage provision, that is precisely what insurance companies did.7

Massachusetts, Congress was told, cracked the adverse selection problem. By requiring most residents to obtain insurance,8 the Commonwealth ensured that insurers would not be left with only the sick as customers. As a result, federal lawmakers observed, Massachusetts succeeded where other States had failed.9

In coupling the minimum coverage provision with guaranteed issue and community-rating prescriptions, Congress followed Massachusetts’ lead.10

Both the House’s proposed legislation and the newly-released Senate’s discussion draft eliminate the individual mandate.


  1. According to one study conducted by the National Center for Health Statistics, the high cost of insurance is the most common reason why individuals lack coverage, followed by loss of one’s job, an employer’s unwillingness to offer insurance or an insurers’ unwillingness to cover those with preexisting medical conditions, and loss of Medicaid coverage. See Dept. of Health and Human Services, National Center for Health Statistics, Summary Health Statistics for the U. S. Population: National Health Interview Survey—2009, Ser. 10, No. 248, p. 71, Table 25 (Dec. 2010). “[D]id not want or need coverage” received too few responses to warrant its own category. See ibid., n. 2. 
  2. See Dept. of Health and Human Services, Coverage Denied: How the Current Health Insurance System Leaves Millions Behind 1 (2009) (Over the past three years, 12.6 million nonelderly adults were denied insurance coverage or charged higher premiums due to a preexisting condition.). 
  3. See 42 U. S. C. §§300gg–1, 300gg–3, 300gg–4(a) (2006 ed., Supp. IV). 
  4. See §300gg. 
  5. See Hearings before the House Ways and Means Committee, 111th Cong., 1st Sess., 10, 13 (2009) (statement of Uwe Reinhardt) (“[I]mposition of community-rated premiums and guaranteed issue on a market of competing private health insurers will inexorably drive that market into extinction, unless these two features are coupled with . . . a mandate on individual[s] to be insured.” (emphasis in original)). 
  6. Brief for American Association of People with Disabilities et al. as Amici Curiae in No. 11–398, p. 9 (hereinafter AAPD Brief). See also Brief for Governor of Washington Christine Gregoire as Amicus Curiae in No. 11–398, pp. 11–14 (describing the “death spiral” in the insurance market Washington experienced when the State passed a law requiring coverage for preexisting conditions). 
  7. See, e.g., AAPD Brief 10 (“[In Maine,] [m]any insurance providers doubled their premiums in just three years or less.”); id., at 12 (“Like New York, Vermont saw substantial increases in premiums after its . . . insurance reform measures took effect in 1993.”); Hall, An Evaluation of New York’s Reform Law, 25 J. Health Pol. Pol’y & L. 71, 91–92 (2000) (Guaranteed-issue and community-rating laws resulted in a “dramatic exodus of indemnity insurers from New York’s individual [insurance] market.”); Brief for Barry Friedman et al. as Amici Curiae in No. 11–398, p. 17 (“In Kentucky, all but two insurers (one State-run) abandoned the State.”). 
  8. See Mass. Gen. Laws, ch. 111M, §2 (West 2011). 
  9. See Brief for Commonwealth of Massachusetts as Amicus Curiae in No. 11–398, p. 3 (noting that the Commonwealth’s reforms reduced the number
    of uninsured residents to less than 2%, the lowest rate in the Nation, and cut the amount of uncompensated care by a third); 42 U. S. C. §18091(2)(D) (2006 ed., Supp. IV) (noting the success of Massachusetts’ reforms). Despite its success, Massachusetts’ medical-care providers still administer substantial amounts of uncompensated care, much of that to uninsured patients from out-of-state. See supra, at 7–8. 
  10. National Federation of Independent Business v. Sebelius. I edited the opinion to pull the inline notes out into footnotes, broke it into paragraphs, and added some whitespace, all in an attempt to make a supreme court opinion look friendly and readable. Lawyers are used to reading right past all that noise until it’s needed, but it can be daunting at first glance. For those of you who want to read all that goodness, it’s in the footnotes, right above this one. ;-) 

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#goskateboardingday at Mt. Tabor

Do one thing every day that scares you.

Mary Schmich

Today, I succeeded.

Jamison and I took #goskateboardingday seriously and went to Mt. Tabor. It was my first downhill runs of the year, and just like last year, the first run was terrifying. Actually, that’s not quite true—preparing to go on the first run was petrifying, starting was a little less so, and by the time I was speeding down the hill, I was having fun. It only got better on the next runs.

We met up with nephew/cousin Ethan and made a new friend, Jeff, once again proving that longboarders are the nicest bunch you’ll meet on the hill.

I used the board I got for last year’s Fathers’ Day the whole time today.1 That way I can leave my double-drop set up for push and this one for downhill. It felt more comfortable than the last time I used this board. Now I wonder what the other board would feel like.

The strangest thing about downhilling: when I tense up, the board wants to go all skittery under me. When I relax, it calms down. I’m sure there’s a life lesson in there, somewhere… ;-)

What scary thing did you do today?

o/-<|:


  1. Yeah, there are four boards in that picture. Jamison and I both brought our top mount downhill boards and our double-drop push boards, just in case. Only two boards left the car. 

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Creating an Alexa skill for my blog

My Alexa can now read my recent blog posts to me—and to you, too!

Creating an Alexa flash briefing skill to accomplish this was much easier than I had expected — not much more than signing up for an Amazon developers account and filling out some forms. There’s no programming involved.

I must admit, the mechanical text to speech voice isn’t ideal. It might make more sense to record myself reading my blog posts, put them on a podcasting service like SoundCloud, and connect that RSS feed to my Alexa skill. That could be a fun experiment.

Btw, your Alexa can read my blog to you, too. Using your Alexa app, you can find my skill by searching for “Brent Logan.” Let me know what you think.

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Happy birthday, Mousse!

Today Mousse turned four.

To celebrate, we got her a Puppuccino, walked Central Park and Orenco Station, and let her choose a birthday present at the pet store.

Happy birthday, Mousse!

Btw, I took a bunch of pictures, hoping to get a good one. They automatically backup to Google, which detects similar pictures and makes animated gifs. These are a couple of the gifs that Google made.

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Dog names — We’re taking suggestions

The problem with kids growing up is that they move out — and they take their dogs with them!

We went from everyone living at home last summer to being empty nesters, losing two wonderful labs in the process. Now seems like the perfect time to consider getting a dog of our own.1 Because the dogs that left were chocolate and yellow labs, it feels right to get a black lab to complete the set.

Names we’re2 currently considering are:

  • Shadow
  • Pepper
  • Darth

Do you have any suggestions for us?


  1. No, were not thinking about having more kids, too… ;-) 
  2. Okay, these are names I’m currently considering. Suzi’s probably wondering why I want to go through the puppy stage again. 

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