Yesterday a federal district judge found the individual mandate requirement in the new health care law to be constitutional. From what I can pick out from news stories, U.S. District Court Judge George Steeh ruled that decisions about whether or not to purchase health insurance do fall under Congress’s power to regulate interstate commerce.
â€œThe decision whether to purchase insurance or to attempt to pay for health care out of pocket is plainly economic,â€ Steeh wrote in a 20-page opinion. â€œThese decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers and the insured population, who ultimately pay for the care provided to those who go without insurance.â€
The suit had been brought by the Thomas More Center, a Christian group apparently dedicated to making sure the poor are always with us, assuming they don’t die from medical neglect. Rob Muise, an attorney for the Center, makes a slippery slope argument explaining why the center will
repeal appeal the decision:
â€œThe trouble, if you think about it, is if Congress has authority to regulate nonactivity then it has the ability to regulate anything,â€ Muise said. Congress can â€œtell you to exercise three times a week, to take certain vitamins, to refrain from eating certain foods because, at some point, costs are going to be incurred to the health care market. I find that very troubling when we have a federal government thatâ€™s supposed to be of limited, enumerated powers,â€ he said.
Libertarians and other righties are willfully ignoring the larger point and have fallen into squabbling about the fine points of the judge’s language, in particular language about economic activity versus inactivity. Judge Steeh argued that failing to purchase health insurance is an economic activity rather than an inactivity, because the decision impacts everyone else. Righties are responding to this argument with much hooting and derision.
Ilya Somin writes at Volokh Conspiracy:
The problem with this reasoning is that those who choose not to buy health insurance arenâ€™t necessarily therefore going to buy the same services in other ways later. Some will, but some wonâ€™t. It depends on whether or not they get sick, how severe (and how treatable their illnesses are), whether if they do get sick, they can get assistance from charity, and many other factors. In addition, some people might be able to maintain their health simply by buying services that arenâ€™t usually covered by insurance anyway, such as numerous low-cost medicines available in drug stores and the like. In such cases, they arenâ€™t really participating in the same market as insurance purchasers.
Is there a charity anywhere in the U.S. providing major medical care to the indigent, in particular one that isn’t receiving some assistance from taxpayers? I can’t think of one. And I’m not even going to bother to address the “low-cost medicines available in drug stores” comment. The bottom line is that there is no way anyone can live in such a way as to never need medical care until one drops dead from old age. And except for the mega-wealthy, the odds are very, very long that if your insurance isn’t paying the bills, you aren’t going to be able to pay them, either. The only way the enormous majority of uninsured people will not eventually be a cost to taxpayers and the insured is if they die suddenly in accidents while still young and healthy, at which point they would be a cost only to the coroner’s office
If the mere possibility that you might purchase a similar service somewhere else is enough to count as â€œactivityâ€ and therefore regulable under the Commerce Clause, then almost any regulatory mandate would be permissible. For example, a requirement that each citizen purchase a gym club membership and exercise for one hour per day could be defended on the basis that, otherwise, people will be less healthy, which will make it more likely they will spend more money on medical care, health insurance, and perhaps other forms of exercise.
The biggest problem with this argument is that the decision of a healthy person to not jump into the health insurance risk pool has a real and immediate impact on the cost of insurance for those in the risk pool. You can’t say the same for choosing to not purchase a gym membership.
The opinion also claims that the Commerce Clause covers â€œeconomic decisionsâ€ as well as â€œeconomic activity.â€ â€œEconomic decisions,â€ by this reasoning include decisions not to engage in economic activity. That, however, would allow the Commerce Clause to cover virtually any decision of any kind. Pretty much any decision to do anything is necessarily a decision not to use the same time and effort to engage in â€œeconomic activity.â€ If I choose to spend an hour sleeping, I necessarily choose not to spend that time working or buying products of some kind.
This is silly. You could also argue that not spending the hour sleeping will reduce your productivity, since you’ll be sleep deprived. Choosing to spend an hour sleeping doesn’t negate the possibility that later that same day you will engage in the same amount of work or shopping that you would have done without the hour sleeping.
The crew at Reason‘s Hit & Run likewise are in fantasyland:
In fact, one could opt out of the market entirely if one were so inclined. Granted, most people arenâ€™t, but a lack of religious motivation doesnâ€™t actually constitute no possible motivation at all. Regardless, even if one doesnâ€™t opt out of the health services market entirely, itâ€™s relatively easy to vary the degree to which one opts in. One individual might choose to see a doctor regularly for routine or preemptive care; another might choose to see a doctor only when very sick. Todayâ€™s decision effectively declares that in order to reduce the cost of uncompensated care, the government can force individuals to buy into a particular set of benefitsâ€”it’s not merely a mandate to buy any kind of insurance, but a mandate to buy insurance deemed acceptable by the governmentâ€”regardless of whether that individual wouldâ€™ve purchased that same level of benefits on his or her own. (It also ignores the minor detail that the law requires taxpayers to pay in excess of $100 billion a year to solve a $43 billion problem. More on uncompensated care here.)
Again, the issue is not only that an individual without insurance will almost certainly eventually end up being a burden to taxpayers and the medical care system generally, although that is a big issue. The issue is also that when young and healthy people opt out of the risk pool there is a real and immediate impact on the cost of insurance for everyone who is in the risk pool.
One of the reasons the mandate is important is that it reduces the amount we’ll all pay for our insurance. This will be especially critical when insurers will no longer be able to refuse to insure people with pre-existing conditions. Obviously, the young and healthy would have no incentive to purchase insurance until they need it. Then the cost of insurance will be a great deal more burdensome to everyone else.
The “uncompensated care” link leads to an argument that the costs to the health care system of people who can’t pay for their care are relatively small. I don’t buy it, but I don’t have time to check the research now. The point is, again, that we’re not just talking about the costs of taking care of the uninsured.
As Jonathan Cohn wrote, “it’s not possible to regulate the insurance industry, in a way that would make coverage available to all people, without compelling every person to get coverage.”
The final argument from the Right is that all decisions to purchase or not purchase anything has an impact on the cost of that thing; lots of people buying toasters enables lowering the price of toasters. I assume that would be true, since manufacturing and shipping probably would have lower per-unit costs. That works for books, anyway, which is the one thing I know about manufacturing.
However, having to pay a couple of bucks more to purchase a toaster is not a burden to everyone in the same way a large, uninsured population is a burden to everyone — including libertarians, although they’re too blinkered by their beloved ideology to see it.
How in the world is a decision to self-insure â€œshifting costs to other market participants?â€ The government is saying to the individual that unless you pay for something you neither want nor need, we are going to provide it for you anyway and dispoil you by force to pay for it.
The defect in this argument is its circularity. Lo Stato decrees that it has the power to command us to buy insurance for ourselves because it wishes to provide insurance for others and it need our money to do so. This reasoning is bottomless. It consists of seizing a power by a process of bootstrapping. Step back and look at it in terms of the source on constitutioal power. It admits that the power to command purchase of a good did not exist before the state asserted it.
In context of the argument at Volokh, I take it “a decision to self-insure” means not buying health insurance. And, of course, in this sense “self-insure” is a fantasy for all but multi-millionaires. And the decision by young and healthy people (I assume the writer is such and has had little dealing with the health care system) to stay out of the risk pool directly and immediately raises the cost of insurance for everyone in the risk pool.
And then when the idiot is hit by a bus or needs cancer treatment or whatever else he can’t imagine ever happening to him, the hundreds of thousands of dollars he can’t pay for his care will either fall to the rest of us, or he will find himself doing without care he needs to save his life. Oopsie!
He neither wants nor needs insurance, he says. I assure you, dude, when your time comes to need health care, you’re going to want it.