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Why is this mandate different from all other mandates?
One of the central concerns that conservatives have about the individual mandate is that it would lead to unlimited federal authority over our individual lives. If Congress can require us to purchase health insurance, conservatives sometimes ask, can’t it require us to purchase cars or broccoli or cell phones?
Defenders of the mandate have been so concerned to show that it is justifiable under the Commerce and Necessary and Proper clauses—and there the argument seems quite straightforward—that we have not been focused enough on making sure that we don’t prove too much. And that’s partly because we tend to be political progressives and are not as worried as conservatives about limiting federal power over our economic lives. We are not libertarians, after all. While we progressive are adamant about defending civil liberties, we generally don’t believe that there is a general right to economic liberty. And thus, unless government forces us to make purchases that reflect particular ideals or conceptions of how we should live our lives, we are not going to get too exercised about government directives in our economic lives.
Why progressives should worry about federal power
For two reasons, however, we should be worried about that making sure the defense of the mandate doesn’t go too far. One is that, as we saw in the Supreme Court hearing today, the conservative members of the Court are worried about this issue. That worry is not just a conservative bug-a-boo but, rather, has a genuine basis in the fundamental structure of the Constitution and that should concern everyone. The federal government is granted enumerated powers under the Constitution. Even if our view of those enumerated powers is far broader than that of conservatives, we still must recognize and respect the fundamental understanding of the federal government that is embedded in the Constitution.
A second reason is that at some point, restrictions on economic life do have consequences for the liberty and freedom we progressive cherish. If the federal government were to have so many individual mandate on us that, say, 90% of our income were necessary to meet them, we would rightly worry about whether this restriction on our disposable income were interfering with our right to choose how to live our lives.
So we need to understand why the health insurance mandate does not justify a federal command that we purchase any other possible good. In other words, we need to explain why this mandate is different from all other mandates.
The simple argument and why it proves too much
The difficulty in making our case is that we are inclined to rest on a simple argument—that the reiterated economic decisions of individuals have a profound effects on interstate commerce. The argument in the health care realm goes like this: individuals who don’t have health insurance still get health care because under the law—and given our widely share moral beliefs—they are entitled to it. The result is that hospitals provide $40 billion dollars of uncompensated care each year and some of that money passed on to insurance companies that, in turn, shift the costs to their policy holders. The average cost of a family health insurance policy is thus $1000 higher than it otherwise would be. Thus we are justified in requiring people to purchase insurance in order to stop them from being free riders on the health care system. The mandate, in other words, is a requirement that people be responsible for their health care by paying some share of the cost of health insurance. For those who can’t afford health insurance, government will pick up the costs under Medicaid or though subsidizing the private insurance.
Clunker, Broccoli, and Cell Phone Mandates
This argument does justify federal government action under the Commerce Clause because it shows that the mandate does have broad, interstate consequences on the economy. But as some conservatives have pointed out, it goes too far. For the effects of what I have called reiterated economic decisions are many. If people stop buying cars, unemployment in the auto industry goes up and as recession can ensue. That’s why the “cash for clunkers” program was instituted. But instead of giving an incentive to trade in late model cars, could the government have simply mandated in 2010 that people with cars ten years old or more buy a new car, perhaps with a subsidy for low income car buyers?
Or take the famous broccoli example. Mandating people to buy broccoli would improve the incomes of broccoli farmers. Is that justified under the commerce clause?
Here’s a third example, raised by Justice Roberts today: government today goes to great trouble to protect us in times of emergency. Would the federal government thus be justified in requiring everyone to own a cell phone so as to receive emergency notifications?
And a fourth example raised by Justice Aito, asks whether the government can require everyone to have burial insurance in order to prevent taxpayers from absorbing the costs of burying the indigent.
The federal government would not, I believe, have the right to institute a clunker, broccoli, or cell phone mandate even though the insurance mandate under the ACA is constitutional There are at least four reasons why the insurance mandate is different from these other mandates.
1. People who don’t purchase health insurance are still making decisions about how to pay for their health care. There is no such thing as inactivity when it comes to health care. We will all need it at some point and all of us always run the risk of needing a great deal of it. Indeed, given the impact of the decision not to purchase health insurance on the costs of others we are all in the health insurance market.
We are not in a similar way in the market for cars or even for transportation. Or for cell phones. We are all in the market for food in an even more constant way—although not necessarily for broccoli— and the market for burial services is closer to that of health care although the potential costs are far less. We will see, however, that the broccoli and burial service mandates don’t meet other criteria that are met by the health insurance mandate.
2. The health insurance mandate is necessary because of part of the regulations that already protect the uninsured. The impact of the reiterated decision not to purchase insurance on the broader economy is not just a product of every day economic activity. It is made substantially worse by the requirement that health care be provided to those without insurance. And a consequence of that requirement is that the decision to go without insurance places costs on others far beyond the normal workings of a competitive market. Indeed it creates what economists call an externality: a shifting of the cost of one's activity from one group to another. The requirement that the uninsured receive emergency health care is not only a moral necessity, it is legitimate under the Commerce Clause. And the mandate is needed to reduce the broader economic burden of this requirement. The mandate is justified not because of the impact of the reiterated economic decisions of individuals alone but because of how those decisions interact with legitimate government regulations. And, once again, the other mandates can’t be justified in this way.
3. The health insurance mandates is justified as part of a larger regulatory plan. The health insurance mandate is not only justified because of the free rider problem I discussed above or because the failure to buy insurance has some broad economic impact. Rather it also is justified because the regulatory scheme for health insurance under the ACA will fall apart without the mandate. The ACA has two rules designed to make insurance accessible and affordable to all: the guaranteed issue rule which requires that insurance companies insure everyone regardless of their medical condition and the community rating rule which sets limits on how much more insurance companies can charge seniors or people with medical conditions. If we know we can get affordable insurance at any time, then we will have an incentive to put off the purchase of insurance until we get sick. But as more people drop insurance, the cost of insurance rises substantially. And that means that more people drop insurance until the only ones who have it are those who are already sick. At that point either most sick people won’t be able to afford insurance or the government subsidies that make insurance possible will be exorbitant.
The mandate, in other words, is not justified under the Commerce Clause on its own but, rather, as a necessary part of an insurance regulatory scheme that is itself legitimate under the Commerce Clause. The other mandates for clunker replacements, broccoli, cell phones, and burial insurance standing alone apart from any larger regulatory scheme, would not be justified in this way.
4. The health care mandate is the least intrusive way of attaining the legitimate government ends of providing health care for all. There are, of course, other ways government could reform the health insurance market. It could create a national health service or a single payer system. Those choices would clearly be constitutional under the power to tax and spend and thus would not raise Commerce Clause issues. However, they would be a much more intrusive way of insuring everyone than the ACA’s scheme of regulation, mandate, and subsidy. That would not be the case with regard to the clunker, broccoli and cell phone mandates. Cash for clunkers, subsidies for broccoli farmers, and some combination of emergency broadcast system and fire house sirens are far less intrusive than those mandates.
5. And the insurance mandate clearly addresses a national problem. And the insurance mandate clearly addresses a national problem. That’s not true for the cell phone mandate since the first responders in emergency situations are state and local governments. Federal government emergency warnings are carried out mainly by those governments. It's also not true that there is a national problem with taxpayer paid burials since the funeral home market is clearly a local one. If anyone needs to deal with this issue it is state not local governments.
The insurance mandate really is a special case, then, because the health insurance industry is a special case. There might be other mandates to purchase some good that might be justified under other special conditions. But the argument for the insurance mandate does not justify a general right on the part of the federal government to require us to purchase certain goods.