Experts offering alternatives to health care mandate

Health care policy experts are kicking around ideas to replace a controversial but critical piece of the health care law -- the individual mandate that all Americans buy insurance.

Last week, a second federal judge struck down the mandate as unconstitutional; two other judges have upheld it. The Supreme Court will likely settle the issue in a couple of years. But in the meantime, some observers are proposing alternatives.

Poll after poll has shown a majority of Americans loathe the idea of the federal government requiring them to buy health insurance or pay a penalty. The question is whether insurance reforms that people do support -- eliminating discrimination for pre-existing conditions or lifetime caps on coverage -- are economically possible without requiring more people to pay into the health insurance system.

Longtime health insurance Robert Laszewski says instead of requiring everyone buy insurance, make it voluntary, with a catch.

"It would be more of an incentive to sign up than what we've got today," Laszewski said.

Laszewski advocates having a strict open enrollment for health insurance once a year. People who wait to buy it, wouldn't be able to enjoy benefits like coverage for pre-existing conditions for a period of say one or two years.

"If we have that kind of penalty, that is you didn't sign up when you were eligible, we could have a completely voluntary system," he says. "People could sign up any time they wanted to, but they're going to have consequences if they don't sign up when first offered."

"We need to make sure that medical care is accessible and affordable for when individuals need it."

Laszewski says everyone would need to sign up at the same time to prevent people from gaming the system -- that is, waiting until they're sick before they start paying for insurance. Other variations include charging people higher premiums or higher deductibles if they don't sign up during a specific period.

University of Minnesota health economist, Stephen Parente says there's also an idea floating around Congress to automatically enroll everyone in a health insurance program with the option of getting out.

"So in other words, it's not a hard individual mandate at all but you would still be auto-enrolled in it," Parente says. "You just have to be activist and say, 'nope, don't want it. I won't pay the premiums for it.' But if you do say that, you face no penalty whatsoever."

You would face a penalty if you ever wanted to get back into the program, however. You'd have to wait five years to take advantage of certain rights under the health care law such as buying insurance at a lower cost through the health insurance exchange.

Giving people incentives to maintain insurance rather than demanding everyone purchase it appeals to Tom Miller of the Conservative American Enterprise Institute. But his main idea for getting around the mandate is to create larger insurance programs for people with chronic medical conditions.

"Some people are high cost, high risk, and that's where you need subsidies from the federal government as well as the state government for their coverage in special ways through high-risk pools, [it] puts a limit on how much of the premium they might pay," Miller says.

Minnesota has a high-risk insurance pool and there is money in the federal health care law to expand them around the country. But many critics say Congress didn't fund them adequately.

Linda Blumberg of the Urban Institute says despite the alternatives, she still prefers the individual mandate. She says it would stabilize the insurance market and people's lives.

"We need to make sure that medical care is accessible and affordable for when individuals need it," Blumberg said. "And the most stable and financially viable way to do that is to make sure that close to everyone is in the pool all of the time."

The court challenges to the individual mandate will weave through the federal court system for at least a year. The Supreme Court is expected to decide the issue before the individual mandate is scheduled to kick in -- in 2014.