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Overruling Obamacare

Dec 27, 2010, Vol. 16, No. 15 • By YUVAL LEVIN
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In October 2009, at one of her weekly press conferences, Nancy Pelosi was asked by a reporter “where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?” Pelosi shook her head and replied: “Are you serious?” When her spokesman Nadeam Elshami was later asked to clarify the answer, he responded, “That is not a serious question.”

Overruling Obamacare

But it has turned out to be a pretty serious question after all. On December 13, U.S. District Court judge Henry Hudson ruled that in fact Congress does not have the authority to enact such a mandate. The case, brought by Virginia’s attorney general Ken Cuccinelli, will now be appealed. It will no doubt end up—perhaps together with a series of other lawsuits filed by officials in more than 20 states—before the Supreme Court in the next year or two.

At issue is Obamacare’s requirement that every American purchase some approved form of health insurance or pay a fine. Without that mandate, much of the rest of the architecture of Obamacare falls apart. That architecture is essentially a command-and-control approach to keeping health care costs down: The government defines what counts as insurance, compels insurers to ignore risk in pricing coverage, imposes price controls on coverage, and then forces everyone to buy the resulting insurance products.

That last part is necessary because the law’s requirement that insurance companies charge sick and healthy people the same price would create a powerful incentive for Americans to avoid buying health insurance at all until they were sick. After all, why pay for coverage when you don’t need it if you can just buy it for the same price when you do need it? Of course, no insurance system could survive if only the sick bought coverage. So Obamacare simply orders everyone to buy insurance. Having taken the economic logic out of insurance, the law’s champions had to take away the public’s freedom to choose whether to be covered or not.

The problems with this approach are legion. Command-and-control policies do not have a very good track record, to say the least, and decades of experience with the Medicare system demonstrate that command-and-control does not keep costs down more effectively in health care than anywhere else. Creating a competitive health insurance market would better control costs without pushing people around so much.

But, in our system of government, questions of legitimate authority precede even these questions of wisdom and efficacy. Can the government really order us to buy something we don’t want to buy and punish us for failing to do so?

The administration’s case for the constitutionality of the mandate rests on two arguments: (1) the Commerce Clause permits such a law because a failure to buy insurance has an effect on interstate commerce, and (2) if you don’t like the first argument, well, then the mandate is not actually a mandate but rather a tax and is therefore permitted under the government’s power to tax.

The first argument is certainly not easy to like. If, as the administration argues, a person’s decision not to purchase health insurance invites the government to compel him to purchase it because being uninsured can create a burden on the economy (by requiring taxpayers to help shoulder the cost of his care if he gets sick), then there is really no limit on the government’s reach at all. By the same logic, a person’s choice not to jog or eat broccoli could add to the burden of our health care costs, so the government could mandate that the person exercise and eat his vegetables. Almost every choice we make has some economic consequence, but surely the Commerce Clause does not mean that the government can therefore force us to make a different choice.

The administration’s second argument is not much better. Payment of the fine for noncompliance with the individual mandate would take place through one’s annual tax return, but in no other way does it make sense to conceive of the mandate as a tax. While the health care law was being debated, its advocates—including the president—sternly insisted that the mandate was not a tax. And it is far from clear, in any case, why the government should have an unlimited power to “tax” us for making choices that liberals do not like.

In a sense, then, the question now before the federal courts is whether the government simply has unlimited power over the life of every American. How the Supreme Court addresses that question will say a great deal about the future of our system of government.

And yet the future of our health care system need not depend at all, as the future of our legal system unfortunately does to a considerable degree, on the whims of Justice Anthony Kennedy. Obamacare is a disaster for a host of reasons of which the individual mandate is only one. The 112th Congress need not wait for the courts to decide the fate of the mandate. For reasons constitutional, economic, and moral, Congress can repeal Obamacare and replace it with real health care reform.

—Yuval Levin

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