When the Supreme Court heard arguments about Obamacare last week, one of the chief issues was whether or not the federal government has the authority to require people to purchase health insurance. The government believes it has this authority under the Commerce Clause.
But it’s one thing to say the government can regulate people already engaged in economic activities. It’s quite another to say that the government can force people on the sidelines to get involved. If the federal government can make people buy health insurance, what else can it make us buy? From the transcript:
JUSTICE KENNEDY: Well, then your question is whether or not there are any limits on the Commerce Clause. Can you identify for us some limits on the Commerce Clause?
Donald Verrilli and the justices argue this point for awhile, talking about why the government can’t also make you buy cars or cell phones or broccoli. The broccoli argument took center stage, showing up again later:
ANTONIN SCALIA: . . . could you define the market — everybody has to buy food sooner or later, so you define the market as food. Therefore, everybody’s in the market. Therefore, you can make people buy broccoli.
The broccoli argument is such a big deal because 87% of Americans think a broccoli mandate would be unconstitutional (8% Constitutional, 5% Don’t Know/Refused).
Let’s ignore the fact that there are apparently millions of Americans, presumably with the right to vote, who believe that forcing Americans to buy broccoli would actually be constitutional. The vast majority of Americans reject such a notion, so proponents of Obamacare have a vested interest in explaining why broccoli is different from health insurance. Meanwhile, opponents of Obamacare (such as myself) have a vested interested in explaining why they are the same, and that the broccoli argument is just a more obvious example of the underlying reasons that make Obamacare wrong, too.
As such, it became the topic of intense debate. One of the most infamous editorials came from Paul Krugman, who derided Scalia for even brining it up, concluding,
When people choose not to buy broccoli, they don’t make broccoli unavailable to those who want it. But when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain.
This sounds reasonable, but I think Krugman is ignoring basic economic principles here (you know, the kinds of things the Nobel-Prize-winning economist used to understand before he became a political hack). When people choose not to buy anything, that can make it unavailable to the people who want it. My inactivity in the newspaper market increases the chance that newspapers will go out of business. My inactivity in the Chevy Volt market means there is less demand for the product, increasing their per-unit cost and making it harder for the company to achieve the economies of scale that allow them to lower their prices. Krugman’s logic should dictate that I’m making Volts more expensive, and often unaffordable, for those who remain.
It’s not just Krugman who has tricked himself into believing that broccoli is somehow exempt from the fundamental rules of economics. Someone from Daily World says, “If you don’t buy broccoli, my grocery bill doesn’t go up.” Actually, if enough people don’t, it could.
But even if Krugman is wrong about non-broccoli-buyers not affecting the broccoli market, he still brings up two major points that make the health insurance market so magically different from all the others in his (and many others’) eyes). First, everyone is gong to need health care eventually, and second, people that don’t buy insurance until they need it only drive up the costs for everyone else (also known as adverse selection). Even the justices were aware of these points:
JUSTICE GINSBURG: …And tell me if I’m wrong about this, but I thought a major, major point of your argument was that the people who don’t participate in this market are making it much more expensive for the people who do...
At first glance the first argument has some merit; I’m probably never going to want to buy a Chevy Volt but I’m very likely to want expensive health care at some point. But the argument is still not completely true. Yes, most people will need health care at some point in their lives, but as Jonathan Adler points out, there are several classes of people, who, by chance or by choice, will certainly not.
As for the second argument, adverse selection is definitely a big problem with health insurance, and the reason the mandate is a good idea. But that gives us no way of limiting the government’s power in regards to other activities. For example, there is adverse selection in the disaster insurance market. People who don’t live near rivers and fault lines are less likely to buy this kind of insurance, so aren’t they driving up the costs for people who are? Besides, disasters can really happen anywhere, and it ends up costing the government money through federal assistance to pay for cleanup, so shouldn’t we require everyone to buy disaster insurance?
Ah, you say, but 99% of people won’t end up needing disaster insurance like they will with health insurance. OK, but where do you draw the line? Who is smart enough to determine that something will affect a high enough percentage of people and/or has enough adverse selection that it warrants the federal government requiring people to get involved in a private market?
I don’t think anyone is. And so we are back to our original problem of having no limiting principle. If the government can make you buy health insurance, what else can it make you buy?
Some Obamacare supporters seem to want to bypass all this inconvenient discussion of limiting the government and just declare that “Health care is interstate commerce. Is this a regulation of it? Yes. End of story.” Sonic Charmer argues there really is no limiting principle to these folks, and that they’re just involved in word games to justify the government involvement they want so badly:
First, take [whatever you want the government to interfere in] and sweep it up into a bag labeled [interstate commerce], or just [a market]. Then you to take [whatever you want the government to actually do] and sweep it up into the word [regulate]. The ‘arguments’ for the preceding involving repeatedly using quasi-equating words like ‘just’, in more and more stressful vocal tones, trying to shove [concept X] into the needed definition of [word Y], as in “But this is just regulating commerce!” over and over again, until the opposition capitulates. There is no intellectual content whatsoever to this word game.
I’m still not convinced that a good limiting principle has been offered, and still very convinced that one is needed. We are all always affecting the markets of everything we buy or don’t buy. I don’t think the Constitution draws fuzzy lines around adverse selection or the proportions of people who will eventually buy things, and I don’t think the Supreme Court has the knowledge to draw such lines for future laws to stumble around. I didn’t expect to be convinced otherwise, considering my bias, but I have analyzed the other arguments to the best of my ability, and I find them lacking. So I still believe the individual mandate is unconstitutional.