42 U.S.C. § 18091 — Requirement to maintain minimum essential coverage; findings
submitted 16 years ago by Pub. L. 111-148 to r/title-42-THE-PUBLIC-HEALTH-AND-WELFARE · 756 words · no verdicts yet
Congress explains why everyone must have health coverage under this law. It says the mandate regulates economic activity that substantially affects interstate commerce, given the health industry's size. It points to a Supreme Court ruling that insurance counts as interstate commerce.
Congress makes these findings to justify the individual responsibility requirement (called "the requirement" in this section):
(1) In general — The requirement is commercial and economic, and it substantially affects interstate commerce, because of the effects listed in paragraph (2).
(2) Effects on the national economy and interstate commerce:
(A) The requirement regulates economic and financial decisions about how and when health care is paid for and when health insurance is bought. Without it, some people would decide to go without insurance and try to self-insure, raising financial risk for households and medical providers.
(B) Health insurance and health care services are a big part of the economy — national health spending was projected to grow from $2,500,000,000,000 (17.6 percent of the economy) in 2009 to $4,700,000,000,000 in 2019, private insurance spending was projected at $854,000,000,000 in 2009, and because most insurance is sold by national or regional companies, it is sold and its claims are paid through interstate commerce.
(C) The requirement, together with the rest of the Act, will add millions of new consumers to the insurance market, increasing supply of and demand for health care, and increasing the share of Americans who are insured.
(D) The requirement builds on and strengthens the existing employer-based insurance system, which covers 176,000,000 Americans; a similar requirement in Massachusetts strengthened employer coverage there even during an economic downturn.
(E) The economy loses up to $207,000,000,000 a year because uninsured people are less healthy and die younger; significantly reducing the number of uninsured will significantly reduce this cost.
(F) Uncompensated care for the uninsured cost $43,000,000,000 in 2008; providers pass that cost to insurers, who pass it to families, raising average family premiums by over $1,000 a year through cost-shifting — reducing the uninsured will lower premiums.
(G) 62 percent of personal bankruptcies are caused in part by medical expenses; significantly increasing coverage will improve families' financial security.
(H) Under the Employee Retirement Income Security Act of 1974, the Public Health Service Act, and this Act, the federal government already plays a significant role regulating health insurance; the requirement is an essential part of that regulation, and without it federal regulation of the insurance market would be undercut.
(I) Under sections 2704 and 2705 of the Public Health Service Act, without the requirement many people would wait to buy insurance until they needed care; the requirement minimizes this adverse selection, broadens the risk pool to include healthy people, and is essential to selling improved, guaranteed-issue insurance products that don't exclude pre-existing conditions.
(J) Private health insurance administrative costs, $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the current individual and small group markets; by increasing coverage and pooling size, the requirement will significantly cut administrative costs and premiums, and is essential to creating markets that don't need medical underwriting.
(3) Supreme Court ruling — In United States v. South-Eastern Underwriters Association, 322 U.S. 533 (1944), the Supreme Court ruled that insurance is interstate commerce subject to federal regulation.
Congress makes the following findings:
The individual responsibility requirement provided for in this section (in this section referred to as the “requirement”) is commercial and economic in nature, and substantially affects interstate commerce, as a result of the effects described in paragraph (2).
The effects described in this paragraph are the following:
The requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased. In the absence of the requirement, some individuals would make an economic and financial decision to forego health insurance coverage* and attempt to self-insure, which increases financial risks to households and medical providers.
Health insurance and health care services are a significant part of the national economy. National health spending is projected to increase from $2,500,000,000,000, or 17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 2019. Private health insurance spending is projected to be $854,000,000,000 in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Since most health insurance is sold by national or regional health insurance companies, health insurance is sold in interstate commerce and claims payments flow through interstate commerce.
The requirement, together with the other provisions of this Act, will add millions of new consumers to the health insurance market, increasing the supply of, and demand for, health care services, and will increase the number and share of Americans who are insured.
The requirement achieves near-universal coverage by building upon and strengthening the private employer-based health insurance system, which covers 176,000,000 Americans nationwide. In Massachusetts, a similar requirement has strengthened private employer-based coverage: despite the economic downturn, the number of workers offered employer-based coverage has actually increased.
The economy loses up to $207,000,000,000 a year because of the poorer health and shorter lifespan of the uninsured. By significantly reducing the number of the uninsured, the requirement, together with the other provisions of this Act, will significantly reduce this economic cost.
The cost of providing uncompensated care to the uninsured was $43,000,000,000 in 2008. To pay for this cost, health care providers pass on the cost to private insurers, which pass on the cost to families. This cost-shifting increases family premiums by on average over $1,000 a year. By significantly reducing the number of the uninsured, the requirement, together with the other provisions of this Act, will lower health insurance premiums.
62 percent of all personal bankruptcies are caused in part by medical expenses. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will improve financial security for families.
Under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act (42 U.S.C. 201 et seq.), and this Act, the Federal Government has a significant role in regulating health insurance. The requirement is an essential part of this larger regulation of economic activity, and the absence of the requirement would undercut Federal regulation of the health insurance market.
Under sections 2704 and 2705 of the Public Health Service Act [42 U.S.C. 300gg–3, 300gg–4] (as added by section 1201 of this Act), if there were no requirement, many individuals would wait to purchase health insurance until they needed care. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums. The requirement is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.
Administrative costs for private health insurance, which were $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the current individual and small group markets. By significantly increasing health insurance coverage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provisions of this Act, will significantly reduce administrative costs and lower health insurance premiums. The requirement is essential to creating effective health insurance markets that do not require underwriting and eliminate its associated administrative costs.
In United States v. South-Eastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation.
Source credit: (Pub. L. 111–148, title I, § 1501(a), title X, § 10106(a), Mar. 23, 2010, 124 Stat. 242, 907.)
- 2010Enacted · Pub. L. 111-148 · 124 Stat. 242, 907
A history note hasn’t been published yet. The record shows enactment by Pub. L. 111-148 on 2010-03-23.
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