Yves here. I have some quibbles with Apgar’s argument, since he avoids the obvious, but unpalatable-to-Obama solution of a public health care system. That’s why defense and homeland security don’t have free rider problems: they are tax funded. But he does raise the issue that a ruling that strikes down Obamacare could do collateral damage.
By David Apgar, who blogs at www.goalscreen.com, an app that tracks and tests work goals to identify predictive metrics
Supreme Court justices had trouble on Tuesday directly challenging the link between interstate commerce and Obamacare’s requirement for everyone to get some kind of health insurance. Without the requirement, healthy people will keep opting out of the market, health insurers will contain costs by denying coverage for anything with a genetic marker, and small businesses will seek states whose insurers tolerate the medical needs of their staff. How’s that for interstate? It’s no joke and it’s happening now.
Instead, Alito likened the requirement to mandating the purchase of burial insurance. After all, stiffs without burial insurance are the ultimate free riders – the living pay their costs just as people with health insurance pay for treating the uninsured. So the objection he and the court’s majority are formulating is this: the Affordable Care Act (ACA) sets a precedent for the redress of other free-rider market failures like requiring burial insurance, but the legislative power to require things like burial insurance is an unacceptable expansion of the commerce clause.
The objection will topple three pillars of federal economic policy making in preempting the severity of healthcare risks as a precedent-avoiding distinction, free-rider justifications of regulation and future regulatory laws that could be construed as precedents. This seems too extreme even for the defense of liberty until you consider it may change the party controlling the White House. Is it true?
The comparison of Obamacare to burial insurance takes one unique, precedent-avoiding feature of the legislation off the table. Only healthcare costs bankrupt two million Americans per year (Himmelstein et al., 2005). Burial costs are, sad to say, predictable. But the ACA is nevertheless now deemed to empower burial insurance requirements. This poses a problem for those dismayed by the Obama Administration’s lack of support for a single-payer option who may not be surprised to see the regulatory approach of the ACA go up in flames.
If the unique severity of healthcare risks does not distinguish them from ridiculous expansions of the power to regulate commerce then a future Congress may be unable to craft a viable single-payer plan. Any state could undermine it with cynical customer-care requirements that federal regulation accompanying the plan could not reach. Expect Texas to require doctors in a single-payer plan to make house calls for checkups.
Having mooted the extraordinary severity of healthcare risks, the court’s political majority focuses us on free-riding as the principal remaining economic justification for healthcare reform. The free-rider problem is that I won’t buy health insurance if I work for a small business that can’t afford it and I am healthy today. And I will throw myself on the mercy of a local hospital if I get in trouble tomorrow. If your employer can still afford health insurance, perhaps because she still pays taxes – then you end up paying for me.
Perhaps it doesn’t matter much whether free-rider market failures can justify future regulation of interstate commerce. The federal government’s big free-rider programs are defense and homeland security – both happily independent of the interstate commerce clause. Just don’t expect future energy and environmental regulation justified by the free ride we all enjoy from energy research and pollution abatement to fare well under future judicial review.
Alito’s burial insurance simile may go farther, however, and preempt any future regulation construable as a precedent. No one has argued with a straight face that the ACA is unrelated to interstate commerce. For weak connections to interstate commerce, check out the gun-free school zones overturned in United States v. Lopez. The emerging argument is that the ACA sets a precedent for absurd abuses of the legislative power to regulate commerce. That is why adults in downtown DC have been arguing whether it will let Congress force us to eat broccoli.
But this is strange. Laws don’t set precedents. Judicial decisions set precedents. To hold it against a law that it sets a precedent is innovative. It creates a new standard for regulation under the interstate commerce clause. Such laws will have to be self-limiting. If you don’t know what that means, either, it’s going to be very good news for attorneys.
The problem with all of this is that good economic policy has come to depend on careful consideration of the severity of risks like those posed by healthcare costs and market failures like the free-rider problem while leaving the distracting question of precedents to the courts. Apparently, it’s quite hard to make a serious constitutional argument against the ACA. So you’ve got to expect casualties.
None of the conservatives on the court is aiming at these things. They just want to unseat Obama. But they’re reckless. Civil society needs to exert extraordinary pressure on the court between now and June to protect itself.