Free Markets, Free People


Constitutional? How can any seriously think ObamaCare’s mandate isn’t Constitutional?

That is precisely the take that Josh Marshall and much of the left have, amusingly, expressed:

A year ago, no one took seriously the idea that a federal health care mandate was unconstitutional. And the idea that buying health care coverage does not amount to "economic activity" seems preposterous on its face.

I’m not sure how Marshall actually believes "no one" took seriously the idea that the health care mandate was unconstitutional, unless he really means "no one who matters". And even then he’s wrong. So let’s boil it down to its real meaning – no one on the left, who consistently ignore the Constitution and matters relating to constitutionality, took the idea seriously.

I’m shocked – shocked I tell you.

Obviously a whole lot of people in the middle and on the right took it very seriously.  So much so that at least a plurality of states have initiated law suits against it and/or passed laws rejecting it.

Marshall also claims that the “idea that buying health care coverage does not amount to "economic activity" seems preposterous on its face.”  Uh, OK, who exactly is claiming that?  What is being discussed is not buying insurance.  And the decision to not buy something has nothing to do with “economic activity” does it?  So let’s turn Marshall’s sentence around: “the idea that not buying health care coverage does amount to “economic activity” seems preposterous on its face”.

Yes, I would agree – and so did Judge Hudson.

Speaking of Judge Hudson, Richard Epstein gives a pretty good summary of the key point in his ruling:

The key successful move for Virginia was that it found a way to sidestep the well known 1942 decision of the Supreme Court in Wickard v. Filburn, which held in effect that the power to regulate commerce among the several states extended to decisions of farmers to feed their own grain to their own cows.  Wickard does not pass the laugh test if the issue is whether it bears any fidelity to the original constitutional design.  It was put into place for the rather ignoble purpose of making sure that the federally sponsored cartel arrangements for agriculture could be properly administered.

At this point, no District Court judge dare turn his back on the ignoble and unprincipled decision in Wickard.  But Virginia did not ask for radical therapy.  It rather insisted that “all” Wickard stands for is the proposition that if a farmer decides to grow wheat, he cannot feed it to his own cows if a law of Congress says otherwise.  It does not say that the farmer must grow wheat in order that the federal government will have something to regulate.

It is just that line that controls this case.  The opponents of the individual mandate say that they do not have to purchase insurance against their will.  The federal government may regulate how people participate in the market, but it cannot make them participate in the market.  For if it could be done in this case it could be done in all others.

Read all of Epstein’s opinion piece by the way.  There’s a lot more to this than just the point I made and he explains it very well.  The usual suspects  disagree.

Anyway, assuming this somehow stands and makes it to the Supreme Court, where after a good breakfast and a good night’s sleep Justice Anthony Kennedy decides “what the hell,  Judge Hudson is right” and the court rules the mandate unconstitutional, what would be the ramifications?

E21 covers some of those for us:

Without the individual mandate, the whole Obamacare edifice crumbles. The judge did not rule that the entire law must be invalidated. But if the individual mandate goes, the insurance regulations — and most especially the requirement that insurers must take all comers without regard to their health status — will never work. Patients could simply wait to enroll in health coverage until they needed some kind of expensive treatment or procedure, and thus pocket the premiums they would have paid when they were not in need of much medical attention.

Or said more simply – without the mandate the whole of the law is unworkable.  Without the mandate, repeal will seem to be the best option.

Oh, and watch the GOP on that point.  When it was first passed, all I heard was “repeal, repeal”.  Now I’m hearing “repeal and replace”.  Uh, no – no “replace”.  Fix the government side of things that are in such horrendous shape and driving the cost of health care up, but stay out of people’s private insurance. 

And should repeal actually happen the insurance industry better get their heads out of their posterior and get busy finding ways to insure more people more cheaply (like creating products where employers could indeed move their workers to that would be outside the work place making insurance portable (thus no “pre-existing conditions”), affordable (large pool) and deliver quality care.   Because, as is obvious, if they don’t someone will again try to do it for them.

~McQ

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27 Responses to Constitutional? How can any seriously think ObamaCare’s mandate isn’t Constitutional?

  • IMO, this is where the battle over Obamacare really begins.  If the provision that forces people to purchase insurance is struck down, then the only options are repeal… or a full government takeover of health insurance.  Guess which option will be fought for by the left?

  • The “affordability” question is NOT and “insurance industry” problem!

    There are cost drivers in the market on the demand side that drive prices up (ie an aging population, high tech drugs and medical techniques, thrid party payer system via insurance or government – no self rationing)…..

    Its a government created problem!

    Get government out of the Medical Insurance markets at the Federal level (ie employer tax preferences for starters)……but also the states themselves have added many ObamaCare like dictates/mandates that essentially drive the price of insurance thru the roof (everything from a full ObamaCare – complete with government-run mandated – in states like MA, ME, etc to simple additional coverage mandates on individual diseases)……not to mention out of control medical lawsuits (guess who most of the politicans are? yep, lawyers)

    In other words – there is no such thing as a free market in Medical Care or Medical Insurance thanks to Statist activism (to “help” you citizens to stupid to choose for yourself) and Corportism (of course those Insurance firms love to mandate expense coverages for everyone that jack rates up)……

    This is addition to the screwed up Nanny State programs of Medicare/Medicaide…..the bankruptcy of which is plain to all who can read!

    Again, the “Cost” issue is  somewhat a Demand or market issue but its primarly an issue of Government Intervention at ALL LEVELS (not just Federal) – when we have a truly free market in medical care that caters to the patients NOT the insurance firms, employers, or government then costs will begin to be contained…..

    And for our “charity” medical care for the indigent – lets go back to just that! Private (there used to be a very robust religious sponsored medical hospital network in the country before govt medical welfare) medical charity NOT govt-coersion/foreced charity via Medical Welfare!

    • Yes, the driving factor in costs is that, due to our employeer provided insurance system, no price competition in the marketplace. This is all due to the current tax system.

      • Exactly right, Don. If individuals bought their own insurance, there wouldn’t be people losing health insurance because they lost their job. Then, the government regulation against pre-existing conditions could simply be that health insurance couldn’t take your premiums for months or years and then drop you because you got sick and the money flows the opposite way.

    • There is indeed an affordability problem which is driven by small insurance pools. Get insurance out of the employers hands and into large pools outside employment (like we buy other insurance products), spread the risk and see cost come down. Insurance 101. It also solves other problems (portability, pre-existing conditions as long as payment is maintained, etc).

      Of course, what also has to be done is to allow sales across state lines (so those pools can actually be formed), and that is a legislative task.

  • This may be the tipping point on the erosion of the Constitution…and HIGH FREAKING TIME.
    The Collective pulled off a counter-revolution during the FDR regime without having to fire a shot, and it needs to be reversed.

  • McQ[W]ithout the mandate the whole of the law is unworkable.  Without the mandate, repeal will seem to be the best option.

    Not at all.  Without the mandates, insurance companies will rapidly go bankrupt and disappear under the weight of claims from people who wait until they are sick to buy insurance… which Uncle Sugar will MANDATE that they provide.  And the only option will be for the government to – with great reluctance – adopt a single payer system.

    Which is what the left has always wanted in the first place.

    Wickard v. Filburn, which held in effect that the power to regulate commerce among the several states extended to decisions of farmers to feed their own grain to their own cows. 

    This is why we are so screwed: it’s merely a matter of time before the Court finds some compelling national interest that will require them to – with great reluctance – proclaim that the federal government has some power that has NEVER been found before in the Constitution which gives it the power to do pretty much whatever it damned well pleases.  They did it with the various New Deal cases; they did it with Roe; they’ll do it (eventually) with health care.

    • Actually, Doc, the Supremes held the line staunchly through most of the New Deal.  If you study Wickard, you’ll find the court followed the CC jurisprudence of the previous 180 years or so in a case just the year before Wickard stood it all on its head.   The Supremes struck down law after law that FDR wanted.
      The revolution came when FDR indicated he was going to pack the court.  The Justices caved, I suppose because they wanted to preserve what they could of the integrity of the court (not that I understand that thinking).
      Even since then, it has been a mixed bag, with some decisions being quite good…others REALLY bad.

      • I suppose that I am thinking of Mr. Justice Cardozo’s opinion in Steward Machine Co. v. Davis:

        It is too late today for the argument to be heard with tolerance that in a crisis so extreme the use of the moneys of the nation to relieve the unemployed and their dependents is a use for any purpose narrower than the promotion of the general welfare.
        In other words, this problem is so big that we’ve got to ignore the Constitution and do whatever it takes.

        How the Court could possibly have decided that a farmer can’t feed his own wheat to his own cattle… Bah.

    • Yeah, I don’t agree — there is a reason for insurance companies to act if the mandate is ruled unconstitutional. That obviously also means the Congress must okay insurance sales across state lines. But, if that’s done and insurance companies do what I’ve talked about in other comments, yes the non-competitive ones will go under, as they should, but those which are innovative and move the product away from employers and into much larger risk pools will do fine (not to mention probably pick up a hell of a lot more business).

      • I also assert the general inviability of this crap sandwich is gaining momentum.
        I won’t work because it can’t work.  Nobody gets to suspend basic laws of economics.
        We see this in the Tidal Waive currently sweeping through the whole obscene mess, along with the indications that a vast number of physicians will simply leave practice.

        • RagspierreNobody gets to suspend basic laws of economics.

          No, but they can certainly ignore them.  Otherwise, we wouldn’t be in this fix to begin with.  Ditto Social Security, Medicare, and all the other programs that the government has enacted over the years that relied upon the population to keep growing, the economy to keep booming, people to keep dying within a year or two after retirement, and benefits to remain a modest subsidy and not a way of life for recipients, i.e. it would be 1955 FOREVER.

          McQ[T]here is a reason for insurance companies to act if the mandate is ruled unconstitutional. That obviously also means the Congress must okay insurance sales across state lines.

          Perhaps it is obvious to you and me and others here, but I doubt that it is obvious to those wardheelers in Congress and their bush league counterparts in the various state legislatures.  I suggest that insurance companies are NOT allowed to sell across state lines simply because they’ve managed to pay off various politicians to, in effect, legislate little monopolies for them.  The insurance companies have no incentive to demand MORE competition, so why wouldn’t they fight like hell AND WIN against such a provision?

          At any rate, if the effects of Congressional action on the banking industry is any guide, they will structure things such that there will only be a handful of giant insurance companies left by the time the dust settles.  What difference does the ability to buy across state lines make if there are only a few choices?

          McQ[Insurance companies] which are innovative and move the product away from employers and into much larger risk pools will do fine (not to mention probably pick up a hell of a lot more business).

          While I agree that people should buy their own health insurance in the same way that they buy their own car insurance, I think that it will require a major change in not only our laws but also our national attitudes to make this work.  As it stands, it seems to me that not only do the laws discourage personal health insurance policies, but also people won’t buy them because they believe that their employers should and MUST provide them in the same way that they should and MUST pay a regular wage: it’s just a normal condition of employment.

          On another note, I wonder if doctors, especially those who practice more elective types of medicine, would see their business decline as a result of disappearing copays and low deductables that would like accompany individual health insurance plans.  If so, then we can expect the AMA to fight like hell against anything that would lead away from the relatively plush benefits most of us enjoy to the more bare bones, catastrophic-type plans that most people AS INDIVIDUALS would like be able to afford.

  • I disagree that there is any action the insurance companies can take to get the government off its back. The government wants to be on its back. The system could be working perfectly in a libertarian paradise and liberals would still be screaming for a full government system; it’s ideological, not logical for them. They think a private system is by definition not fair, they don’t have to check whether or not it is working in reality.

    • I’m not really talking about liberals and their wants (I mean, for goodness sake, how did Josh Marshall write what he wrote with a straight face). I’m talking about what insurance companies need to do on their own once they convince Congress to open up the state borders and let them sell everywhere.

      • Does anybody know if any insurance companies have ever sued to be able to sell across state lines?  It seems to me obvious that any law barring them would be a clear violation of the interstate commerce clause and Congressional action would not be needed.

  • So far, it hasn’t been made sufficiently clear that Wickard was not just about an individual growing wheat for his own consumption.  It was also about the ability of the federal government to control wheat production available for interstate commerce regardless of the intent of the producer to place his/her wheat production into interstate commerce.  In essence, the Court unanimously held that the power to regulate interstate commerce included the power to regulate production of  a commodity which was available for interstate commerce. But Wickard did not consider whether the federal government could force Filburn to grow wheat on his property, nor does it imply that it could do so.

  • Okay so you gor crapcare insurance.  If a doctor won’t see you are you really better off?

  • Holder and Sebelius don’t even bother to defend ObamaCare in legal terms against the Virginia challenge: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/13/AR2010121303816.html

    They just note that people get sick and this is a problem. True enough, but not really a legal defense.

    Maybe this Virginia decision will go farther than I expect.

  • Without giving too much identity away, I will say that I can sympathize with what it’s like to have to defend laws that seem utterly preposterous.  I have been there before.  However, I find it difficult to believe that anyone had the guts to argue that within the power to regulate commerce comes the power to force people to engage in it.  Why don’t we just tell everyone they’re buying a GM truck next year, whether they like it or not?  I mean I cannot fathom that other judges have upheld that portion of the law.  The act itself is naturally severable, in a constitutional sense, but agree with others that without the mandate it becomes nothing more than a very fast method of bankrupting insurance companies.

    • Actually, that is not the argument the government is making, because it’s a prima facie loser, really. The core argument the government is making on this matter is that everybody will at some point consume health care services, and the public is picking up the tab for them, therefore everybody is known to be engaging in health care commerce even if today they are not actively consuming any resources. Therefore, the government is allowed to regulate this commerce that is always occurring, even when it is not.
      (Please do not mistake me for making this argument. I am trying to accurately relay the argument as it was summarized in the decision. It is important to understand what your opponents are actually doing. Also, the government did deploy some other arguments on the matter but they are less obviously related to what you are talking about.)
      I don’t think Virginia actually replied to these arguments per se. I hope in the next level of litigation they point out the major probelm I have with this line of reasoning, which is that it is already the result of government intervention that they can claim we are all guaranteed to consume health care because of other government mandates. If treatment was not mandated by the government, then those who “needed” care but refused it or could not afford it would not receive it and therefore would not be engaging in commerce. As nice as these mandates may actually be in some ways, for the purpose of this law it is still a circular argument for the government. They can not declare that we all have a right to own a house and make certain guarantees that they will make good on if you suddenly need a house, then argue that since we’re all guaranteed to be involved in the housing market as a result of this guarantee they can regulate the failure to buy a house. This game can be played everywhere. The argument is too powerful, which, if this gets through, I’m sure Congress will lose little time in taking advantage of.

      • I read the brief to set out more of an inevitability argument.  That people would undoubtedly seek healthcare at some point, therefore the engagement in commercial activity comes eventually – regardless if it takes until death.  That it’s not truly an ongoing consumption argument.  (Perhaps we are saying the same thing.  I’m really tired!)   I dont’ think the public is truly picking up the tab for the non-payers.  They just shift the burden back to the hospitals.  (With the exception of state run facilities like university regents systems.  Those are undoubtedly public.) 

        If that is a person’s argument, then you are effectively saying that since people will probably use it at some point, let’s just make them use it now.  You are saying the commerce clause gives the government the power not only to control the market, but to manufacture the market when necessary.  I think the USSC will have to strike that down, as it is as far astray from the general scope of the commerce clause as anything I have seen.

        I go back to my GM illustration.  Everyone uses ground transport at some point, right?  I know we’re on the same side here, I am just taking it to its illogical conclusion. 

    • http://hindenblog1.blogspot.com/2010/12/burn-congress-mandates-every-citizen.html
      IF Congress can do that…in another time it could mandate every adult purchase and maintain a firearm.

  • The point is that the uninsured impose costs on all of the rest of America.  We do not put uninsured accident victims in the alley to die; we take them into the emergency room and provide care at public expense.
    Thus the idiotic distinction of a “requirement” disappears.  The uninsured are imposing costs and can be required not to do so.
    A better analogy is auto insurance which is required before one drives on the public roads.

    • A better way to do that is to treat the uninsured and then charge them. And not only charge them, but take the necessary action to collect. Instead, everyone sighs and writes it off. BS. What better way to drive people to take out insurance than to let them know they’ll be charged and hounded until they pay?

      That certainly would have me think twice. But a government mandate? No thanks. (BTW, there will always be people who can’t afford much of anything – we’ve pretty much got them covered now under Medicaid. But those who are uninsured and can afford it – charge and collect).