The justices of the Supreme Court may have reached a final decision on the Affordable Care Act. And they may not have. On Tuesday, as Dahlia Lithwick noted, Justice Anthony Kennedy told an audience of Nevada judges and lawyers that “cautious decision-making is not indecisiveness” and expressed deep concern over the deterioration of political discourse in America. Was that a sign he’s still deliberating over the case and struggling with the arguments, as he’s been known to do? Or was that a sign of nothing at all? Your guess is as good as mine.
But the arguments over the case continue—and will continue, even after the court issues its ruling. And one argument the law’s critics continue to make, successfully, is that their case is about liberty. As they see it, the individual mandate compromises liberty by forcing people to buy something against their will.
I happen to disagree with the argument’s factual premise, because the mandate doesn’t force anybody to buy anything. It merely requires people likely to consume medical services to make a contribution to those costs in advance, if they can afford it, either by purchasing comprehensive insurance or by paying a fee to the government. And the penalty for failing to meet the requirement? No criminal sanctions and no direct penalties. The worst that can happen if you defy the mandate is that the federal government may withhold future rebates on your income taxes, if indeed you are entitled to any. The iron grip of government, this is not.
But critics of the law gloss over something else: The Affordable Care Act will actually increase freedom, by giving people more opportunities to obtain health insurance and, as a result, to get affordable medical care when they inevitably need it. To make this case, on legal as well as policy grounds, I collaborated with David Strauss, a constitutional law professor at the University of Chicago. Our joint op-ed appears at Bloomberg View today. Here’s an excerpt:
“…in the U.S., not everybody can actually get health insurance—partly because, as economists have long understood, the health-insurance market is almost uniquely prone to dysfunction. … carriers today charge higher premiums, reduce benefits or deny coverage altogether to applicants who have pre-existing medical conditions. Although this keeps insurers solvent, it excludes people who need insurance the most—in ways that limit their ability to participate fully as members of society and, for that matter, to engage in interstate commerce. Frequently these people can’t switch jobs or start a business. In the worst cases, they can’t pay their medical bills or obtain the care they need.”
We are hardly the first people to observe the dysfunctions of health insurance or its relevance to the case. Last month, shortly after oral arguments, Donna Dubinsky, a technology industry executive, wrote a smart (and well-written) op-ed for the Washington Post pointing out that most people are not uninsured “by choice.” The problem is that they can’t get coverage, at least at affordable prices, and suffer because of that:
A key assumption underlying the arguments, questions and answers was that all uninsured people are uninsured by choice. ... If you are not employed and you want to purchase insurance in the private market, you cannot unilaterally decide to do so. An insurer has to accept you as a customer. And quite often, they don’t. Insurers prefer group plans, with lots of people enrolled to spread the risk. Can you blame them? The individual consumer is a lot of work, is a higher risk and produces relatively little revenue.
One challenge for advocates of the law has been the lack of a clear “limiting principle”: If the government can make you buy insurance, what’s to stop it from making you buy broccoli? But buying broccoli and buying health insurance aren’t very similar. Dubinsky notes—as have economists like Henry Aaron, David Cutler, and Austin Frakt—that the distinguishing feature of health care is that it’s an example of “market failure.” Supply doesn’t rise to meet demand, and so on. Addressing that market failure could be part of a new limiting principle, if the justices feel one is necessary.
Here’s how we suggest phrasing it: “Government may regulate activity before that activity takes place—in this case, requiring people to get insurance before they get sick—when doing so is necessary to keep an essential interstate market functioning.” (For some other variations on limiting principles, some related to market failure, see Jack Balkin’s recent entry at his blog.) Such a principle would justify a health insurance mandate and maybe even a few others, like burial insurance, if the expense of burial became so expensive that it always required insurance and if people were unable to get that insurance on the market. This principle would not justify a mandate for broccoli, cell phones, or virtually any other hypothetical critics have raised. (It’s not a coincidence that the only imaginable mandates satisfying this principle involve insurance, whose purpose is to make catastrophic expenses affordable via moderate pre-payment.)
Of course, a more straightforward argument would be that the mandate, as constructed, falls well within the boundaries of federal power that existing precedents have set. As we say in the op-ed, we still think that’s the case.
follow me on twitter @CitizenCohn