Friday, June 29, 2012

Are National Market-Based Legislative Solutions Now Unconstitutional?

Although a majority of the Supreme Court upheld the Affordable Care Act yesterday under the Tax and Spending Clause, five justices - Justice Roberts in obiter dictum and four other justices in dissent - expressed their opinion that the enforcement mechanism of individual mandate of the Affordable Care Act was unconstitutional under the Commerce Clause and the Necessary and Proper Clause. In contrast, had Congress simply expanded Medicare to cover everybody it would have been perfectly constitutional under the Spending Clause. Think for  a moment about what that means.

The Patient Protection and Affordable Care Act was modeled after similar legislation in Massachusetts. That state law in turn was modeled after legislation proposed by leading members of the Republican Party, the conservative think tank Heritage Foundation, and the health insurance industry trade group AHIP. The Affordable Care Act constitutes an attempt to bring health care costs under control by making the market for health care more efficient. It represents a free market solution for achieving universal health care.

Of course, a completely laissez faire approach to health care would not even attempt to achieve the goal of universal health care. We could abolish collective health insurance altogether and watch most people die for lack of affordable treatment. How many of us could afford open heart surgery? ($100,000). How may of us could afford a few days in the ICU? ($2,500 per day) Who could afford the true cost of medication, once the research and development costs are taken into account? (On the average, over $1 billion for major medication). These costs are manageable only if we have health insurance.

But the market for health care is inefficient because healthy people would normally choose to opt out of purchasing health insurance - or, to look at it from the perspective of the seller, the market is inefficient because health insurance companies want to insure healthy people, not sick people. People who are not covered by insurance not only forego major medical expenses, they also forego routine check-ups and preventive care. The population as a whole gets sicker and less productive while at the same time health care expenditures expand because medical conditions which might have been treated efficiently (hypertension, diabetes, asthma) instead manifest themselves at the emergency room and are treated surgically. The result is a higher level of disability and a higher rate of mortality. This is why the United States is ranked 40th in the world for health care, despite our miracle drugs, outstanding medical centers, and dedicated cadre of highly-trained health care professionals.

The individual mandate potentially solves all of these problems. All persons, including healthy people, purchase insurance to cover the nation's medical costs, thus bringing down the average cost of health insurance. As the population receives treatment to control chronic conditions, our people become healthier, reducing the demand for medical care and again lowering costs. The workforce becomes healthier, leading to increased productivity, which makes us not only happier but makes it easier to afford health care.

That, anyway, is the economic theory behind the Affordable Care Act. It is a market-based solution involving private insurance providers, private physicians, and privately-owned clinics and hospitals. The only role of government is to mandate health insurance coverage (as it does auto insurance or malpractice insurance) and to subsidize the cost of health insurance for the lower half of the economic stratum.

This could potentially serve as a model for solving myriad problems in society. Instead of a command and control regulatory system or government-run benefits programs we could institute market-based reforms to address all manner of challenges that we as a society face. We have to educate our children, retrain our workforce, clean up the environment, stop global warming, protect endangered species, promote clean energy, stimulate the economy, create a rational system of old-age pensions and long-term care .... Are there not market-based solutions to these problems?

Conservatives applaud the opinion expressed by five members of the Supreme Court that Congress lacks the authority under the Commerce Clause to require individuals to participate in economic activity that spreads the risk and promotes the public welfare. I believe that this view is contrary to their core beliefs. The politics of the moment have blinded them to embracing a conservative approach to solving social problems. For nearly two decades the individual mandate constituted the conservative solution to the problem of universal health care. Now, thanks to the dictum emanating from five conservative justices, those solutions would be unconstitutional.

Is that true to conservative principles?

Wilson Huhn teaches Constitutional Law at The University of Akron School of Law.

1 comment:

  1. I hope that they'd be able to find a solution for this problem. Thank you very much.
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