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Nobody “Chooses” Not to Participate in the Health Care Market

[ 22 ] January 9, 2012 |

I have a piece up at the Prospect about the obvious constitutionality of the Affordable Care Act. In particular, the “activity/inactivity” distinction cooked up by conservatives to get the ACA ruled unconstitutional 1)has no basis in the text of the Constitution or Supreme Court precedent and 2)is particularly inapplicable in the context of health care:

The first problem with the argument is the assumption that people without insurance are choosing not to participate in the market for health care. This argument might have some validity if we lived in a libertarian dystopia in which people without health insurance were left to die in the case of a medical emergency. But this is not the case. As the administration brief points out, “for decades, state and federal laws—reflecting deeply rooted societal values—have required emergency rooms to stabilize patients who arrive with an emergency condition, and common-law and ethical duties restrict a physician’s ability to terminate a patient-physician relationship.” The uninsured consumed nearly $120 billion in medical services in the last year for which there is good data (2008). People who go without medical insurance, then, are not choosing to exclude themselves from the health-care market in any meaningful sense; as the Obama administration brief reads, “[i]ndividuals without insurance actively participate in the health care market, but they pay only a fraction of the cost of the services they consume.” Not only is this free riding not some kind of constitutionally protected liberty, it represents exactly the kind of collective-action problem that the commerce clause was designed to give the federal government the ability to address.

Another point worth adding is that people making the ad hoc arguments about the unconstitutionality of the ACA have claimed that the regulation of “inactivity” is especially dangerous because it lacks a “limiting principle” — allegedly, if the government can regulate your “inactive” choice to let taxpayers pay your emergency medical care it can regulate anything. Leaving aside the fact that the argument is specious on its face, a limiting principle of course remains in place — U.S. v. Lopez. In Lopez, nothing direct economic or involving interstate markets was involved, and Congress provided no evidence that there were substantial indirect economic effects or that states were incompetent to deal with the problem. With respect to the ACA, conversely, the regulation is not merely rationally related to but essential to a broader regulatory framework that is almost universally conceded to be constitutional, and health insurance presents potential collective action problems that states would be unable to solve in light of federal action to end discriminatory insurance company practices. Upholding the ACA would do nothing to undermine the “limiting principle” actually established by the Rehnquist Court.

Comments (22)

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  1. J. Otto Pohl says:

    The US should just adopt a system of state provided medical care such as exists in the UK and be done with it.

  2. superking says:

    The simple version of this, of course, is that in a market economy, “inactivity” is also know as “lack of demand.” It has economic consequences regardless of whether the individual is active or inactive.

  3. BKP says:

    Lopez was decided on the weighted judgments that broke down to the political opinions and personal beliefs of the judges, not on a foundation of consistent and universal application of law. Nine other judges could have easily come up with a different ruling.

    I mean the syllabus for the case contains this:

    Held: The Act exceeds Congress’ Commerce Clause authority. First, although this Court has upheld a wide variety of congressional Acts regulating intrastate economic activity that substantially affected interstate commerce, the possession of a gun in a local school zone is in no sense an economic activity that might, through repetition elsewhere, have such a substantial effect on interstate commerce.

    That is nonsense on stilts and betrays a bias for gun ownership rather than a rational standard for the limits of what counts as economic activity.

    That case was decided because those judges wanted to argue that gun possession doesn’t have adverse social costs.

    And in light of pre-existing attempts to solve health insurance problems by states, I find it very hard to believe that states are unable to deal with the problem.

    • Craigo says:

      This argument rests on the assumption that the commerce power is intended to regulate social problems and not merely economic ones.

      The Court, correctly, reached the decision that the economic costs produced by the social problem of gun ownership near schools was highly attenuated.

      • Craigo says:

        Also, the syllabus for the case is not produced by the Court and has no legal significance beyond providing sleep or work-ethic deprived law students an easy answer if they’re called on that day.

      • BradP says:

        Do you have a good idea as to how much liability insurance and legal costs public schools generally have to bear?

        I’m really unsure, but I’m guessing that they aren’t negligible.

        • Malaclypse says:

          Having once worked for charter schools (before anybody says anything, this was twelve years ago, and I then believed charter schools might be part of a solution. I now think they, and by extension me to some extent, made the problem worse):

          Most of the liability exposure revolves around bussing. If the school has outsourced bus driving, it pays through the nose to the bus company, which pays through the nose for insurance. If the district runs their own busses, then they do have high insurance costs.

          Legal was relatively trivial, however.

    • mpowell says:

      Why does the states ability to deal with the problem have anything to do with the legality of the matter?

      And of course the commerce clause is going to be subjected to judicial interpretation. It is necessary to define what commerce means (since virtually all behavior has an economic impact of some sort, even if 2 or 3 times removed). And even given a general definition, there will be debate at the margin. But there is a broad set of rulings that have effectively defined what commerce is supposed to mean in these cases (and I think is reasonable from a policy perspective and also has value just by the fact that it has been the common interpretation for decades) and it is entirely consistent with the definition used by defenders of the ACA and I think is consistent with the interpretation used in Lopez.

      • Scott Lemieux says:

        Why does the states ability to deal with the problem have anything to do with the legality of the matter

        Because of the purpose of the commerce clause?

        • mpowell says:

          Well, I am not a lawyer, but are you making some connection to the Necessary and Proper clause here? My understanding is that the federal government gets to regulate anything that substantially impacts state commerce and that they can pass whatever laws are necessary to do so. Whether the states could effect the same regulatory regime on their own or might choose to implement a different one if left to their own devices is irrelevant to the constitutional question, though not necessarily the political one.

          How does the commerce clause depend on what state’s can achieve on their own? If it did, what justifies federal laws regarding drugs? The states could decide perfectly well on their own which drugs should be legal or not.

  4. efgoldman says:

    You’re quite right, Scott, and your argument (to this non-lawyer) is sound.
    Doesn’t mean the current Supremes won’t twist themselves into legal, constitutional and philosophical pretzels to get the “correct” political outcome: shitcanning ACA.

  5. Anderson says:

    On one of the (seemingly) endless Volokh threads on this topic, one commenter (a conservative, I think) had a clever prediction: the SCOTUS affirms on the tax argument, thus not needing to even reach the Commerce/N&P argument.

    I realize the tax argument hasn’t fared too well in the courts, but leaving aside the legal merits, the political attractions of such a solution are obvious.

    You even get the bonus that the SCOTUS would have officially declared the mandate a “tax,” thus providing a talking point for the 2012 election.

  6. Mike Schilling says:

    Forcing people to purchase health insurance is completely different from forcing people to invest in the stock market (i.e. Social Security “reform”.)

  7. wengler says:

    I think the greater question is whether the ACA will actually control costs of medical care.

    It may have bought the stupid, prohibitively expensive US medical system another 5 years, but as long as you keep the money in medicine(just like in politics) you are going to get doctors lying to their patients, practicing profit-minded defensive medicine, and patients demanding every procedure and pharmaceutical under the sun. Meanwhile the people that actually need medical attention won’t get it until it’s too late.

  8. Anonymous says:

    for decades, state and federal laws—reflecting deeply rooted societal values—have required emergency rooms to stabilize patients who arrive with an emergency condition, and common-law and ethical duties restrict a physician’s ability to terminate a patient-physician relationship

    That suggests an alternate approach to the problem, in which we drop the morality and common decency. If someone says “I have chosen not to participate in the health-care market,” take them at their word – but also don’t force the doctors and hospitals to treat them.

    There is precedent in the recent cases of fire departments not putting out home fires, when the owner had not paid the annual fees. It is also similar to the old concept of “outlaw” (dropped quite a long time ago, but I understand the legal principles of the Magna Carta are making a comeback), where an outlaw had forfeited the protection of the laws. Outlaws were sometimes branded to mark their status, but we probably don’t need to go that far – still, it would be helpful to have some way for the doctors and EMTs to be able to identify the non-participants.

    (PS. In case it’s not clear, there’s definitely some tongue-in-cheek in the above.)

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