Ryan expects health reform to cause cost “death spiral”

CBS reports:

Republican Rep. Paul Ryan, a key voice in the GOP on the issue of health care, said Thursday he expects the Supreme Court to strike down a key element of President Obama’s health care reforms — the “individual mandate,” which requires every American to acquire health insurance.

But regardless of whether the Court strikes it down or not, Ryan said he expects the reform package to send health care costs into a “death spiral.”

“I think [the Supreme Court] will knock down the individual mandate, but the question is severability,” Ryan said at the Washington Ideas Forum, a conference hosted by the Atlantic magazine and the Aspen Institute.

The Supreme Court is expected to rule in the summer of 2012 — just as the next presidential election is ratcheting up — on whether the individual mandate is constitutional. By “severability,” Ryan was referencing the possibility that the court could separate the mandate from the rest of the law and strike down just that provision (rather than the possibility of the court striking down the entire law).

Many have argued that the individual mandate is central to the entire law because its purpose is to hold down health care costs. Without a mandate, its proponents argue, only the sick would purchase health insurance, causing costs to go up.

Without the mandate, Ryan said, health care costs could go into a “death spiral.” However, said he thinks costs will “death spiral” anyway because the mandate won’t work. Rather than follow the mandate — which goes into effect in 2014 — people will simply wait until they get sick and pay a fine, he said.

Instead of using a mandate to encourage people to purchase insurance, Ryan has suggested an auto-enrollment mechanism coupled with tax credits for health insurance.

Asked whether the GOP-led House could pass an auto-enrollment health care bill should the Supreme Court knock down the individual mandate, Ryan responded with a chuckle, “To save the president’s health care law? I don’t think we’ll be in the position to do that.”