Is the White House gearing up for another healthcare fight? President Obama doesn’t want the public to think so.

In April, President Obama told reporters that he had “enormous confidence” that the Supreme Court would deem the health reform law constitutional — and that his administration was “not spending a whole bunch of time planning for contingencies.”

Despite the blustery public front, the administration is not so sure about the fate of its signature legislation. At the end of May, senior White House officials reportedly attended a meeting hosted by a pro-Obamacare advocacy group during which attendees were reminded “to continue projecting confidence that the court will uphold the law.”

Behind the scenes, it’s clear that the White House is worried. The president told big-dollar donors at a closed-door campaign event in May that the law may need to be rewritten after the Supreme Court decision.

And in June, Obama’s Health and Human Services Secretary Kathleen Sebelius offered her assurance that if the Supreme Court strikes down some or all of the law, her agency would be “ready for court contingencies.”

What might those contingencies be? Supreme Court rulings are famously impossible to predict, but there are several likely outcomes.

Uphold the entire law. The Court might agree with the administration’s argument that the entire law is constitutionally permissible.

This is what the administration wants most — and arguably what the public wants least. A New York Times poll recently reported that just 24 percent of the public wants the whole law left in place.

If the Court sides with the White House, Team Obama will declare victory and continue to try to sell a skeptical public on the supposed virtues of the law.

Strike down only the individual mandate. This would scrap the requirement that all Americans obtain insurance but leave in place the rest of the law, including two major insurance regulations: guaranteed issue and community rating. The former requires insurers to sell coverage to all comers regardless of preexisting conditions, while the latter restricts the ability of insurers to charge different rates based on health history, age, and gender.

Without the mandate, the individual insurance market would enter a “death spiral.” Many people would wait until they got sick to buy insurance. That would drive up the price of coverage, so some reasonably healthy folks would decide not to buy policies. The pool of those with insurance would thus grow sicker and more costly. And so prices would go up again. The process would
repeat itself until only the sickest and costliest individuals actually bought insurance.

That’s exactly what’s happened in states that already have guaranteed issue and community rating regulations in place.

The death spiral can be so catastrophic that the Obama Administration actually argued that if the individual mandate were struck down by the Supreme Court, then all the major insurance regulations should fall with it.

Indeed, as House Minority Leader Nancy Pelosi (D-Calif.) recently said, “Just to borrow a Supreme Court metaphor, you have to eat your vegetables. You have to have the mandate in order for this to work from a financial standpoint.

Over the past year, Democratic legislators have admitted that they’re exploring alternatives to the individual mandate, including taxes or other types of penalties that are less likely to run afoul of the Constitution.

But this would amount to imposing a back-door individual mandate — a policy to which a large majority of the public remains adamantly opposed.

Strike down the mandate and related insurance provisions. This would leave in place the most expensive parts of the law — provisions governing the law’s health insurance exchanges, subsidies for private insurance coverage, and the massive expansion of the low-income healthcare program Medicaid.

No doubt the administration would continue to defend these coverage expansions. But it would have to explain publicly how the country can afford hundreds of billions of dollars in new spending — and why the bulk of that spending should be routed through a program as poorly run as Medicaid.

Not only is the low-income public health insurance program straining state budgets beyond their breaking points — it also has a dubious record of actually improving its beneficiaries’ health.

Strike down the entire law. This is the best possible outcome for American patients — and the one the Obama Administration most wants to avoid. If the law goes down, the White House will make the decision a hot topic on the campaign trail, attempting to rally the base with a full court press against the Supreme Court itself.

As Neera Tanden, a former White House adviser who now runs the Center for American Progress, said, “If this court overturns the individual mandate, it will galvanize Democrats to use the courts as a campaign issue.”

The White House, in other words, will almost certainly play politics with the Court’s ruling — whatever it is. Even after the Supreme Court decides, the battle over health reform is far from over.

Source: http://www.forbes.com/sites/sallypipes/2012/06/24/how-will-the-white-house-respond-to-the-supreme-courts-obamacare-decision/