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Tuesday, 9 March 2010

The Wild Rumpus Over the Individual Mandate is About to Start

The Virginia legislature is about to pass a bill that would prohibit mandating citizens to have medical insurance or pay what they call a "fine" or "penalty" (see here). The long anticipated wild rumpus over the individual mandate is about to start!

[Dear non-U.S. readers - "wild rumpus" is an episode in "Where The Wild Things Are," Maurice Sendak's wonderful book for children and their parents.]

The Virginia legislature's attack on the individual mandate rests on two legal arguments that are psychologically understandable but muddled and wrong about key facts:

  1. State Senator Fred Quayle, one of the sponsors of the bill, argues that “in the entire history of this country there has ever been any act of Congress requiring a citizen to buy anything.’’ But as Yale Law Professor Jack Balkin points out in a New England Journal article on the legal status of the mandate, the mandate is actually a form of tax that individuals do not have to pay if they have health insurance. The General Welfare clause in the Constitution ("The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States") is unambiguous about the government's right to impose taxes.

  2. State Representative Bob Marshall makes a variant of Quayle's argument: “This is a penalty for doing nothing. Hey, I’m doing nothing, leave me alone." But if Marshall elects to be uninsured he's not doing nothing. If he is injured and goes to an emergency room, the Federal Emergency Medical Treatment and Labor Act (EMTALA) mandates emergency care that his fellow citizens will pay for it he doesn't. And if he develops a curable cancer, his friends will hold a bake sale and make donations to pay for the treatment he has elected not to insure against.

But opposition to the mandate also rests on two moral arguments. While I reject these arguments as not consistent with the guiding principles for a decent human society, they are views deeply held by many Americans, not simply muddled legal thinking:

  1. While I prefer to think of the provision of basic health care as a societal obligation rather than a right, many in our society see it as neither. This is the perspective behind Senator Quayle's faulty legal analysis - that health insurance is a consumer good, like cars and computers. It would be absurd to mandate purchase of cars or computers. But for those who see health, and therefore basic health care, as of distinctive importance, taxing ourselves to provide it becomes a moral requirement, not an abominable manifestation of "socialized medicine."

  2. The article about the legislature I cited above reports that "Clint Bolick, a litigation specialist with the conservative Goldwater Institute who wants to test the mandate in the US Supreme Court if it passes, said Obama’s plan to mandate insurance coverage is nothing more than an effort to require one group of people to subsidize insurance for another." In nosing around the web to see what I could find about income redistribution I came upon "Conservapedia," a site that I - a card carrying liberal - wasn't aware of. It set forth the argument against cross subsidization this way:

    Income redistribution can be either the act of an individual's voluntary charitable giving or government mandated compulsory transfer of assets and income from one group of citizens to another group.

    Most conservatives accept and advocate voluntary charitable giving as necessary to alleviate social problems, but believe the government should not interfere, but rather should encourage personal involvement and personal giving to the under-privileged, elderly, disabled, and other hardship cases. Also, many conservatives view some forms of government redistribution as an impingement on personal rights, leading to unjust expropriation of property, fostering irresponsible social conduct and acting as a disincentive for personal involvement to alleviate social problems. Also, mandatory giving may create jobs for bureaucrats and dependent constituencies as electoral bases. By contrast better off liberals like professors are more likely to vote for political parties that favor income redistribution. Income redistribution will increase the taxation they personally pay. They show altruism by the way they vote.
Even in our fractious society, there is near universal agreement that health care costs must be constrained. There is similar near universal agreement among economists that this cannot be done without bringing the full population into the insurance pool.

Nevertheless, Virginia will pass its anti-mandate law, the governor will sign it, and a number of other states will join the bandwagon. The issue will ultimately go to the Supreme Court. Despite the anti-administration tilt on the Roberts court I am persuaded by Balkin's analysis that the anti-mandate legislation is almost certain to be rejected.

Therefore, since health care costs must be constrained, whether through federal legislation this year or, if that fails, when the U.S. economy implodes further, the paradoxical result of the conservative anti-mandate fervor is that we will ultimately need an out-of-the-closet tax. Single payer - here we come!


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