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.
“The decision whether to purchase insurance or to attempt to pay for health care out of pocket is plainly economic,†Steeh wrote in a 20-page opinion. “These 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:
“The trouble, if you think about it, is if Congress has authority to regulate nonactivity then it has the ability to regulate anything,†Muise said. Congress can “tell 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 that’s supposed to be of limited, enumerated powers,†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 aren’t necessarily therefore going to buy the same services in other ways later. Some will, but some won’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 aren’t usually covered by insurance anyway, such as numerous low-cost medicines available in drug stores and the like. In such cases, they aren’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 “activity†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 “economic decisions†as well as “economic activity.†“Economic decisions,†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 “economic activity.†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 aren’t, but a lack of religious motivation doesn’t actually constitute no possible motivation at all. Regardless, even if one doesn’t opt out of the health services market entirely, it’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. Today’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 benefits—it’s not merely a mandate to buy any kind of insurance, but a mandate to buy insurance deemed acceptable by the government—regardless of whether that individual would’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.
Update: Classic wingnut reaction, from Volokh:
How in the world is a decision to self-insure “shifting costs to other market participants?†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.
Let’s take the same argument and apply it to car insurance, which IS mandated – at least in any state I’ve ever been in.
Why should everyone who drives a car have to be insured? Why not let people assign the risk to themselves, in fine Randian fashion. That’s fine if a millionaire rear-ends you. They can afford to pay for your car, and any damage to your person. But how about if it’s the homeless person, who lives in his car, and is driving to a job interview who rear-ends you? What then? How do you get damages from that person, except over a long period of time, if ever?
Why have any sort of insurance at all? How about life insurance? I’m sure all of the wealthy out there have nice life policies, in case they kick the bucket early. Isn’t all insurance, after all, GASP!, “SOCIALIZED?” Cue organ music…
Ok then rich people, get rid of your ‘socialized’ life insurance polices. If I have a 10 year cheap term policy, aren’t my payments going to be used if you die early? And what if you smoked fine Cuban cigars like a chimney, and drank a liter of 30 year-old single malt scotch a day, until your lungs looked like the inside of a Sago Mine, and your liver like a block of poorly-made Chinese concrete? Aren’t my meager term payments then subsidizing your heirs? What kind of Galt-like figure are you, taking money from me to subsidize keeping your wife and children in the lifestyles to which they’ve become accustomed?*
The conservative mind is an empty, soulless place; barren as the Moon, and about as bright…
*Incidentally, I’m unemplyed and have no insurance other than the one for my car, which, in NY is mandated by, “GASP! (again), the STATE!!! No, not Federal, but State-state.
Well, surely some will die from lack of medical treatment; it happens all the time. Unfortunately, social policy has been organized in such a way as to discourage the poor from contraception, meaning that the problem literally propagates itself.
Right. That is why medicine is an essential public service, one which should not be operated by for-profit industry. The concept of running medicine as a business is as absurd as the idea of running the police department as a business. Indeed, it’s even worse: in a peaceful society you might not truly need police, but pending some kind of dramatic shift in the very kind of beings people are, you will always need medicine.
Actually, it’s just the same with a gym membership or any other product. The decision not to buy does reduce demand compared to a decision to buy, and the type of product has no influence on that. To put it more simply, if the government mandates gym memberships for every individual over the age of 16, sets a cap on the price, and requires certain benefits be provided to qualify as a gym membership, then the price of such memberships may stabilize and possibly fall. It depends largely on capacity and effectiveness of enforcement.
Sleeping or eating are terrible examples to use, since those are necessities. However, it is true that every hour spent playing is an hour that can’t be used for work, and vice-versa. There is such a thing as opportunity cost; it wasn’t just invented for this discussion.
I think you completely ignored the point of the breadth of the Commerce Clause. Is there any case in which any kind of remotely economic activity was not construed as under the influence of the clause? The purpose was to show that the powers of the Congress under interstate commerce have gradually and consistently grown over time, to the point at which there is no longer even any particular reasoning involved. If it’s economic, Congress can do it. If that’s the point, there’s no reason to call it interstate commerce. It’s just Commerce, or the Economic Catch-All.
What activities in your view, maha, are unconstitutional with regard to the commerce clause? What activity, in principle, is not economic in any sense? What activity has no impact on interstate commerce?
It’s actually a very simple argument to make that any labor or purchase in any state has some effect, even though it may be infinitesimal, on the price or availability of some product or service outside the state in which it occurs. After all, the states are not closed systems — trade of all sorts of products happens regularly between them. What you buy, sell, or produce at one price today in state X will eventually have some impact on some object somewhere else in the country.
Do we only accept effects which we can measure? How do we know whether there is an effect until we’ve tried to measure it? If we have to measure economic impact of every activity before we can decide whether it’s constitutional, this seems to be an unreasonably high burden and would likely drain most of the GDP.
The original concept of interstate commerce was that only products or services bought, sold, or transferred across state lines were subject to federal regulation. That’s a relatively easy standard to judge by comparison.
However, I think it’s still too obtuse and difficult a standard. The mere fact that some citizen can legally cross the state border, buy a product in Nevada, and then return to California with it should not constitute an act of interstate commerce. There’s no way to enforce that kind of system effectively.
There’s no immediate impact in reality; it’s however long it takes some insurance bureaucrat in a corporate office somewhere to realize that people are dropping out en masse. “Hey, we’d better raise premiums quick or profits are going to drop!”
Selling access to medicine is an obviously stupid scheme that has no place in a civilized society. It’s much the same with medicine itself, where the availability or absence of a particular substance is often a matter of life or death.
That remains to be seen. And if it doesn’t work, what then? Yet more restrictions written by bureaucrats, for bureaucrats? At what point do you decide “enough is enough”? At what point do you say: “the insurance industry must die”?
It is possible, however, to not have an industry to regulate.
You can always tell a libertarian/wingnut argument (yes, I group them together; the gap between them has always been small, and it’s narrowing by the day): Absolutely no reference to actual court cases, actual legislation, actual experiences of actual people in life. Just paragraphs and paragraphs of “What if some fictional person did this fictional thing?”
I hate to ask what sounds like a stupid question, but – isn’t the “mandate” to “buy insurance or pay a tax penalty”? So, no one is actually forced to do anything, they’re simply taxed, unless they do something.
Good points in all the comments.
The Volokh conspirator mentions “a decision to self-insure,” which means what, now? How does one “self-insure” for health concerns? If that’s a reference back to what Ilya Somin wrote, I call complete BS. Hoping for charity, taking one’s vitamins, saying one’s prayers, running 5 miles a day and buying OTC Claritin or Pepcid isn’t going to prevent cancer, MS, heart attack, stroke, tumors or any other damn thing. And it sure isn’t going to pay for the necessary care.
Gulag also mentions the mandate for auto insurance, which is the elephant in the room that the anti-mandate crowd ignores. To be precise, most states don’t actually require that citizens buy auto insurance, only that they provide legitimate “proof of financial responsibility,” if not through insurance then with a bond or other large-dollar surety. Failure to do this causes often-massive financial hardship for innocent motorists, and an increase in the cost of insurance for law abiders. It’s essentially the same argument being made for the health-insurance mandate.
(And a pre-emptive note to any racist trolls out there: I work in insurance subrogation; my job is to go after at-fault motorists, many of whom are uninsured. I’ve dealt with auto accidents in nearly every state, and I can assure you, police and the courts apply the law to undocumented aliens the same as to everyone else. So spare us that nonsense, please.)
It’s actually a perfect libertarian ideal. It sounds self-reliant and almost principled but is utterly untethered to any real-world application.
I have yet to understand why the Right isn’t griping about having to ‘pay’ for other people’s health insurance. It works this way: If health care benefits were taxable income, employees receiving them from an employer would be paying an aggregate of $126 billion/year more in income taxes.
By way of the back door, employer-provided health care insurance is a $126 billion/year government health insurance system. (Probably not complaining because they’re insured by their employers? Surely, I jest.)
Note to Ilya Somin: everybody dies. Everybody who dies requires medical attention before dying (not everyone gets it, but we all need it). Anyone who isn’t exempt from illness and injury and mortality should have health insurance. That leaves two kinds of people: those who are a) nonexistent, or b) vampires.
We need to get the insurance companies out of the health care business altogether. They are nothing but a pariah and could care less if Americans drop over dead tomorrow. Their only concern is making money. People dying is of no consequence to them as long as they can make a buck on that, too.
How does one “self-insure†for health concerns?
It could mean being prepared for a final exit without going through expensive and futile measures trying to gain a few more days when it’s obvious your time is up. There are some illnesses where you know it’s over and it doesn’t make sense to in-debt your survivors with astronomical medical bills trying to fight a losing battle. Suicide!
Or, it could mean taking out a policy with Jesus Christ life and health insurance. After all…by his stripes we are healed!
Kevorkian lives!!
erinyes..The Sunshine Skyway option. 🙂
Christopher Reeve managed to self-insure. Proof that if you’re super tough, as he was, and a multi-millionaire, as he was, and can still bring in big bucks writing and directing, as he did, you too can manage to self-insure.
How many of us does that describe?
Mind you, he also started out with insurance and had to run through all the allowable insurance too.
OK. We got through the first inning of the game and we are ahead – a little. That’s better than being behind a lot. By the end of the ninth, the arguments for both sides will have been honed and the SC will make the final call. I am not sure if the SC will hear the case before the mandate goes into effectt. It’s my understanding that no litigant has ‘standing’ until after they have refused to pay for health care, and that doesn’t go into effect for years – 2014 if I recall.
If they’d let us scrap this nonsensical system of private insurers and for-profit hospitals and go for a government-based national health care system we wouldn’t be in this silly situation of making people buy stuff.
As a once-young-and-healthy-person-who-got-cancer (and nearly died) I’m here (luckily) to say everybody needs access to serious health care, and since our political system is too broken to allow us to get a better way, THIS is the way that access will be provided. That’s what they get for not supporting a more sensible option.
I wonder if anyone has made a connection between a healthcare mandate and the tragic burning down of a house while the fire department stood by?
Most of you are a lot smarter than me but I think the two concepts share a lot in common, both being, for all intents and purposes, insurance policies, etc.
and, I agree with a national health care plan, though the transition would seem to be painful with a lot of people losing their jobs, though, I assume, most would find jobs in the Federal sector. Through my experiences with my parents, tri-care seems very efficient.
Chris Rock has a line in his routine where he says black folks ain’t afraid if “Al Qaida” as much as they’re afraid if “Al Cracka”; well , we should all fear “Al Cancer”. We should be spending the money to beat “Al Cancer”, cause that’s our biggest threat.
Swami, my wife would kill me if I jumped off the Skyway; that sort of activity screws up traffic for hours.
@Rick Mas
Outstanding! Maha, you should make this the comment of the week. Rick, I’m a fan. This comment needs to be repeated from sea to shinning sea, shouted from the mountain tops, especially Pikes Peak.
It’s astounding that 19 or so states brought these frivolous challenges when more people actually favor the health plan than oppose.
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“I assure you, dude, when your time comes to need health care, you’re going to want it. ”
Barbara you know better. He HAS insurance – he doesn’t want low-class people to have equal access! IMO, the vast majority who object to the ‘mandate’ – HAVE insurance!!! Medicare or coverage through their employer. So let’s make a deal – I think we can accomodate their wishes. Go down the line – if you have insurance, you have a right to an opinion – but you don’t have ‘standing’ in a legal sense. Sit down and shut up for now. Grown-up are working.
Look at that sliver of folks who does not have insurance – does not WANT insurance – and is willing to COMMIT that they won’t be a burden on those with insurance in the event of illness or accident. Are you willing to pay cash at the time you need medical service and are you willing to be totally dependent on charity for medical care if your needs are greater than your means? Will you sign what is essentially a medical directive – a binding contract to all health care providers that you REFUSE to accept care you can’t pay for? If the answer to all is YES, let that individual opt out of the mandate without penalty.
However, if he changes his mind and wants to particiapte as a memeber of the society he lives in (medically speaking) he will have to pay a penalty to retract his agreement. And it should be expensive – several times what he would have paid for his portion of being insured as part of the HCR program. If he decides to retract AFTER he is diagnosed, for that patient only, it should be completely optional for the insurance company to accept him.
Millions of people were unwilling particiants in the game he WANTS to play – is demanding to play – as a free citizen. I say let him.
Tom Monaghan is the chief funder of the the Thomas More Society. It is more interested in marrying right-wing religion and politics. Actually, Monaghan seems to be playing the role of Henry VIII rather than Thomas More.
Mohammed is sad (/|:{(>