Law Commons^™

Nfib V. Sebelius And The Individual Mandate: Thoughts On The Tax/Regulation Distinction, Kyle D. Logue

Michigan Business & Entrepreneurial Law Review

When Chief Justice John Roberts wrote the opinion of the Court in National Federation of Independent Businesses v. Sebelius (NFIB) explaining the constitutionality of the Affordable Care Act’s (ACA) minimum essential coverage provision (sometimes referred to as the individual mandate), he reasoned that the mandate—or, more precisely, the enforcement provision that accompanied the mandate (the Shared Responsibility Payment or SRP)—could be understood as a tax on the failure to purchase health insurance. According to this view, the enactment of the mandate and its accompanying enforcement provisions fell within Congress’s virtually unlimited power to “lay and collect taxes.” This tax-based interpretation …

The Affordable Care Act, Experience Rating, And The Problem Of Non-Vaccination, Eric Esshaki

University of Michigan Journal of Law Reform Caveat

Polio, the whooping cough, and the mumps, among many other communicable diseases, were once prevalent in communities within the developed world and killed millions of people.1 The advent of vaccinations contained or eradicated several of these diseases.2 However, these diseases still exist in the environment3 and are making a comeback in the United States.4 Their persistence is directly attributable to the rising trend among parents refusing to vaccinate their children.5 One proposed solution to this problem is to hold parents liable in tort when others are harmed by their failure to vaccinate. Another proposed solution argues that parents should pay …

Spending Medicare’S Dollars Wisely: Taking Aim At Hospitals’ Cultures Of Overtreatment, Jessica Mantel

University of Michigan Journal of Law Reform

With Medicare’s rising costs threatening the country’s fiscal health, policymakers have focused their attention on a primary cause of Medicare’s high price tag—the overtreatment of patients. Guided by professional norms that demand they do “everything possible” for their patients, physicians frequently order additional diagnostic tests, perform more procedures, utilize costly technologies, and provide more inpatient care. Much of this care, however, does not improve Medicare patients’ health, but only increases Medicare spending. Reducing the overtreatment of patients requires aligning physicians’ interests with the government’s goal of spending Medicare’s dollars wisely. Toward that end, recent Medicare payment reforms establish a range …

Comparative Effectiveness Research As Choice Architecture: The Behavioral Law And Economics Solution To The Health Care Cost Crisis, Russell Korobkin

Michigan Law Review

With the Patient Protection and Affordable Care Act (“ACA”) set to dramatically increase access to medical care, the problem of rising costs will move center stage in health law and policy discussions. “Consumer directed health care” proposals, which provide patients with financial incentives to equate marginal costs and benefits of care at the point of treatment, demand more decisionmaking ability from consumers than is plausible due to bounded rationality. Proposals that seek to change the incentives of health care providers threaten to create conflicts of interest between doctors and patients. New approaches are desperately needed. This Article proposes a government-facilitated …

An Insurance Structure To Encourage Investment In Preventative Health Care, Nicholas Georgakopoulos

University of Michigan Journal of Law Reform

The incentives for investments in Americans' health are poorly aligned. Health insurers are not sufficiently motivated to invest for the long term. The structure of health insurance does not compensate insurers for investments in lasting health, such as measures preventing chronic disease. If an American changes insurers, the new insurer reaps the benefits of the good health the prior insurer's investment produced. This Essay explores insurers' incentives to invest in health, illustrates how those incentives fail, explores possible improvements, and shows that subsequent insurers should have an obligation to compensate the prior insurer for the averted expenses of expected diseases …

Re-Thinking Health Insurance, Hans Biebl

University of Michigan Journal of Law Reform Caveat

In May 2009, while promoting the legislation that would become the Patient Protection and Affordable Care Act (PPACA), President Obama said that rising health care costs threatened the balance sheets of both the federal government and private enterprise. He noted that any increase in health care spending consumes funds that “companies could be using to innovate and to grow, making it harder for them to compete around the world.” Despite the rancorous debate that surrounded this health care legislation and which culminated with the Supreme Court’s decision in National Federation of Independent Businesses, the PPACA was not a radical piece …

Access To Medicaid: Recognizing Rights To Ensure Access To Care And Services, Colleen Nicholson

University of Michigan Journal of Law Reform Caveat

The Supreme Court has defined Medicaid as “a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals.” In June 2012, the Court found the Patient Protection and Affordable Care Act’s (PPACA) Medicaid expansion unconstitutional. The Court took issue with the threat to withhold all of a state’s Medicaid funding if they did not comply with the expansion, finding it coercive and a fundamental shift in the Medicaid paradigm. However, Medicaid in its current form may not always be effective at providing beneficiaries with timely access to …

Crisis On Campus: Student Access To Health Care, Bryan A. Liang

University of Michigan Journal of Law Reform

College-aged adults are an overrepresented group in the uninsured population of the United States, and traditionally underserved minorities are disproportionately affected. Students with private health insurance are often functionally uninsured as well, since most schools refuse to accept this traditionally elite calling card on campus. Consequently, the large uninsured and functionally uninsured populations often rely on school-sponsored health insurance plans for access to care. These plans have uneven coverage, limited benefits, exclusions and high co-pays and deductibles, and provide little health care security for their beneficiaries. Further, schools and insurance companies have profited substantially from these student plans, raising the …

Reconstructing The Individual Mandate As An Escrow Account, Gregg D. Polsky

Michigan Law Review First Impressions

The recent health care reform law's most controversial provision is the individual mandate, which imposes a fine on individuals who fail to obtain a minimum level of health insurance coverage. Many object to this policy, arguing that the government shouldn't force individuals to purchase health insurance. Others believe that the mandate is a necessary component to health care reform. What has been missed in the discussion is that Congress could restructure the individual mandate to avoid the requirement that individuals purchase health insurance while still fulfilling its principal function. The principal purpose of the mandate is not to require individuals …

Consumer-Directed Health Care And The Chronically Ill, John V. Jacobi

University of Michigan Journal of Law Reform

Insurance plans with consumer-controlled spending accounts are advocated as tools for reducing health costs and empowering consumers. This Article describes their recent development and argues that they are likely to fail. Instead of focusing on the small number of consumers with chronic illnesses who account for the bulk of health spending they focus on the majority of relatively well consumers. This Article proposes market-based and regulatory changes focused on high-cost patients. To best serve cost and quality goals, health finance responsibility should be divided between consumers and their employers for predictable and routine costs, and government for chronic and catastrophic …

Increasing Consumer Power In The Grievance And Appeal Process For Medicare Hmo Enrollees, Kenneth J. Pippin

University of Michigan Journal of Law Reform

Federal law requires that Health Maintenance Organizations (HMOs) and Managed Care Organizations (MCOs) provide Medicare beneficiaries with specific grievance and appeal rights for challenging adverse decisions of these organizations. The Health Care Financing Administration (HCFA) is charged with enforcing these regulations. Currently, however, HCFA contracts with HMOs, allowing them to enroll Medicare beneficiaries despite the fact that many of the statutory and regulatory requirements are ignored by the Medicare HMOs. This is problematic because the elderly Medicare population may not be able to independently and adequately challenge the HMO's denial of care or reimbursement. Because HCFA has been reluctant and …

Clearing The Way For An Effective Federal-State Partnership In Health Reform, Eleanor D. Kinney

University of Michigan Journal of Law Reform

At century's end, states have assumed a very different role in the design, implementation, and operation of health service programs than they did twenty-five years ago. In the current volatile political atmosphere particularly at the federal level, states have taken up the mantle of healthcare reform in the final years of the 1990s. Yet there remain problems and difficulties with the current federal-state relationship in health reform. The critical question is whether states can successfully accomplish genuine reform given its politically charged, complex and costly nature. This question takes on particular significance for the most important reform-expanding coverage to the …

Managed Care Regulation: Can We Learn From Others? The Chilean Experience, Timothy Stoltzfus Jost

University of Michigan Journal of Law Reform

Because the United States relies on private insurance for financing health care to a much greater degree than do other nations, and because managed care as a form of private insurance is further developed in the United States than elsewhere, it is arguable that we have little to learn from other nations about managed care regulation. This Article tests this hypothesis with respect to Chile, a country where private insurance is widespread and managed care is emerging. It concludes that by studying the experience of other nations we might gain a larger perspective on the context of our concerns in …

The Competitive Impact Of Small Group Health Insurance Reform Laws, Mark A. Hall

University of Michigan Journal of Law Reform

This Article reports on findings from an extensive study of small group health insurance market reforms in seven states, enacted during the early 1990s. After summarizing the content and purpose of these reforms, this evaluation focuses on the impact these reforms have had on the nature and degree of market competition. The principal findings are: (1) small group health insurance markets are highly competitive, both in price and in product innovation and diversity; (2) although some insurers have left some or all of these states in part because of these reforms, an ample number of active competitors remain, even in …

Managed Care- The First Chapter Comes To A Close, Sallyanne Payton

University of Michigan Journal of Law Reform

Introduction to the symposium, Managed Care: What's the Prognosis: Managing Care in the Next Century.

Chicago Hope Meets The Chicago School, Gail B. Agrawal

Michigan Law Review

Twenty-five years after the enactment of the Federal Health Maintenance Organization Act and nearly five years after the failure of proposed federal health care reform, managed care has come to dominate the medical marketplace. As a result, the relationships among patients, payers, and physicians have changed fundamentally and dramatically. In this market-driven environment, health care - how much it costs, who receives treatment, and who pays for it - may have surpassed the weather as a topic of everyday conversation at dinner tables and water coolers across the country. In the popular press, reports concerning managed care, usually derogatory, are …

Democratizing Hmo Regulation To Enforce The "Rule Of Rescue", Kent G. Rutter

University of Michigan Journal of Law Reform

Despite heightened public concern about HMOs, misguided regulatory measures have not guaranteed HMO patients access to the treatment options many consider vital. This Note recommends four changes to the current regulatory system that would preserve HMOs' ability to control health care costs while allowing patients and doctors, rather than lawmakers or HMO administrators, to set health care priorities.

Drive-Through Deliveries: In Support Of Federal Legislation To Mandate Insurer Coverage Of Medically Sound Minimum Lengths Of Postpanum Stays For Mothers And Newborns, Freeman L. Farrow

University of Michigan Journal of Law Reform

President Clinton signed the Newborns' and Mothers' Health Protection Act of 1996 into law on September 26, 1996. The Act requires insurers that provide maternity benefits to cover medically sound minimum lengths of inpatient, postpartum stays according to the joint guidelines of the American Academy of Pediatrics and the American College of Obstetrics and Gynecology. This Note discusses the historical context in which the necessity for passage of protective legislation arose, the interplay between state and federal statutes that created the need for federal legislation to provide desired protections for postpartum patients and examines the provisions of the Act. This …

The Nonprofit Health Care Corporation Reform Act Of 1980, David L. Hollister, Patience A. Drake

University of Michigan Journal of Law Reform

In recent years, Blue Cross/Blue Shield has been the subject of considerable controversy. Its critics charge the non-profit, tax-exempt corporation with being unduly secretive, arrogantly unresponsive to consumer interest and not vigorous in its cost containment efforts. These criticisms, along with a variety of other factors, led to the legislative reform I am here to talk to you about this evening.

Regulation Through The Looking Glass: Hospitals, Blue Cross, And Certificate-Of-Need, Sallyanne Payton, Rhoda M. Powsner

Michigan Law Review

A clear focus on the commitment of the public health and hospital establishments to the large teaching hospital and their belief in rationalizing the health care system through community-based planning allows us to understand the ideas and institutions that have produced our present system of hospital regulation. It can also help us to understand the structure and behavior of the hospital industry and can illuminate current controversies over health care policy.

What follows is a narrative account of the development of regional planning and certificate-of-need legislation. As part of that story, we trace the evolution of the Blue Cross, explain …

The Impact Of Michigan's Health Maintenance Organization Act, Roger Alan Petzke

University of Michigan Journal of Law Reform

Growing dissatisfaction with the shortcomings of the traditional system of health care has led to renewed interest in the Health Maintenance Organization (HMO) concept in recent years. Although some HMO's have been operating in the United States for over forty years, conditions have been less than favorable to their growth and development. Major obstacles have been opposition from the medical profession, lack of public understanding about the nature and function of HMO's, and state laws restricting or prohibiting the establishment of HMO's. In order to create a more favorable legal climate and encourage HMO development, a number of states, including …

A Proposed Cure For The Intervention Blues, Lawrence E. Hard

University of Michigan Journal of Law Reform

This article does not purport to provide a study of the doctrine of subrogation and the merits of that doctrine in the context of insurance coverage. There are several difficult questions which could be raised as to the proper role of subrogation in insurance litigation. This article assumes the propriety of extending the right of subrogation to the type of medical and hospital payment plans offered by the Services and analyses the device of intervention as a method of enforcing the Services' right to contractual subrogation.