Thursday, April 1, 2010

The Individual Mandate

Now that health care reform is a reality, many on the right are complaining that the health care reform bill's individual mandate in unconstitutional.  The individual mandate requires all Americans purchase health insurance.  Those who don't will pay a tax penalty of 2.5% of thier income or $695, whichever is greater.  For those who cannot afford to buy insurance, there are, according to Timothy Noah,
exemptions for people who either fall under the tax-filing threshold or who, if forced to purchase health insurance, would end up spending more than 8 percent of their annual income. The majority of those subject to the mandate would receive a government subsidy.  
I was surprised to learn that the individual mandate was originally a Republican idea.   But when you think about it, Republican opposition to the individual mandate isn't all that surprising.  This is just one more piece of evidence for David Frum's claim that Republican opposition to health care reform was motivated not by principle, but by the political desire to make health care reform Obama's Waterloo. 

But is the individual mandate constitutional?  Timothy Noah argues that it is.  Neither I nor Noah are lawyers, but Noah has talked to some.  And one of them, Mark Hall, a professor of law at Wake Forest University, argues that the commerce clause in the Constitution justifies the individual mandate.  Noah writes:
Although health delivery is often local, Hall writes, "most medical supplies, drugs and equipment are shipped in interstate commerce." More to the point, "most health insurance is sold through interstate companies." 
Some argue that the individual mandate is unconstitutional because it violates the Fifth Amedment's takings clause (i.e., "nor shall private property be taken for public use, without just compensation").  But, as Noah writes, Yale constitutional law professor Akhil Reed Amar doesn't buy it.  For one thing, the individual mandate does not result in property being taken without compensation: the insurance one buys is the compensation. 

Still, some people think that the individual mandate is an infringement on their liberty, even if they don't have a legal argument against it.  But this is a mirage.  I guess that they implicitly appeal to Mill's moral distinction between self-regarding and other-regarding conduct (found in On Liberty, Chapter IV).  The state has no right to interfere with a person's self-regarding conduct:
As soon as any part of a person's conduct affects prejudicially the interests of others, society has jurisdiction over it, and the question whether the general welfare will or will not be promoted by interfering with it, becomes open to discussion. But there is no room for entertaining any such question when a person's conduct affects the interests of no persons besides himself, or needs not affect them unless they like (all the persons concerned being of full age, and the ordinary amount of understanding). In all such cases there should be perfect freedom, legal and social, to do the action and stand the consequences. 
As Noah points out, one's refusal to buy health insurance does affect the interests of others.  According to Hall,
Covering more people is expected to reduce the price of insurance by addressing free-rider and adverse selection problems. Free riding includes relying on emergency care and other services without paying for all the costs, and forcing providers to shift those costs onto people with insurance. Adverse selection is the tendency to wait to purchase until a person expects to need health care, thereby keeping out of the insurance pool a full cross section of both low and higher cost subscribers. Covering more people also could reduce premiums by enhancing economies of scale in pooling of risk and managing medical costs.
You might have no interest in complying with the mandate.  Indeed, the law provides for no penalties, even if you refuse to pay the penalty for not having insurance.  Perhaps you believe that your rights will disappear unless you exercise them and generally make a nuisance of yourself.  Fine.  If that's the way you feel, I want you to make the following pledge: if you refuse to buy health insurance now, then you refuse to buy health insurance for the rest of your life, and you refuse to accept medical treatment unless you pay for it out of your own pocket.  If you are not ready to take that pledge now, then you are really one of those free-riders Hall mentioned, cowering behind noble language that, to you, signifies nothing.

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