Wednesday, March 28, 2012

Would You Like Broccoli With That Health Insurance Plan? The Supremes Discuss The Slippery Slope Of ObamaCare

Broccoli, cell phones and burial services, oh my! What will the government force us to buy next? The parade of horribles was the topic du jour at Tuesday's oral argument before the US Supreme Court on the constitutionality of the individual mandate contained in the Affordable Care Act. The Supremes expressed concern over the slippery slope potentially created by the ACA and where the line should be drawn. At issue is whether the individual mandate of the ACA is authorized by the United States Constitution art. 1 sec. 8 clause 3, the Commerce Clause, which gives Congress the power to regulate interstate commerce. The Supreme Court has, over the past 190 years, interpreted the Commerce Clause to allow congress to regulate all sorts of industries, from ship navigation, to the Chicago meat industry, to wheat production for personal use.

Justice Scalia, notorious for his conservative legal opinions, asked the first question of Solicitor General Donald Verrilli, setting the tone for the day. Scalia queried, perhaps disingenuously, why couldn't the federal government just directly address the problems of individual access to health care rather than the individual mandate to purchase health insurance. The answer of course, is that the present Congress will not create a public health care option. Appropriately, Mr. Verrilli did not give this answer, but offered instead that the ACA is in fact addressing the problem directly.

The Justices' questions centered around the concern that if Congress can require individuals to purchase health care, why can't Congress require the purchase of a cell phone, of broccoli, of health club memberships or of funeral services? Verrilli;s answer to these questions pointed out the health care market is different because (a) it is the only market where you can show up without the means to pay and you will still be provided the service at the expense of those who do pay; (b) everyone will eventually need health care and thus everyone is a market participant; (c) the ACA seeks to regulate the health care industry, not the insurance industry, and requires the method of payment for health care be through health insurance; (d) the ACA uses the most efficient method that allows consumer choice among insurance policies; and (e) the ACA does not provide any enforcement powers--if insurance is not purchased, the penalty is not anymore than what one would have paid for the insurance.

The respondents arguing to strike the mandate did not have any easier a time with the Justices. Attorney Paul Clemente, arguing for the respondent 26 states, argued the ACA forces individuals to purchase a product. Clemente argued that defining the market as those who access health care was improper, and that the market being regulated was those that purchased insurance. Clemente suggested it would be constitutional for the ACA instead to only require that insurance be purchased at the point of sale; i.e. only when one gets sick and shows up to the Emergency Room. The Justices focused their questions to Clemente on issues regarding the definition of the market being regualted (insurance versus health care), the fact that uninsured patients already shift the cost of their health care to paying patients, and what difference does it make if the ACA requires the purchase of insurance prior to getting sick or at the time of receiving health care services.

Justice Breyer proposed a hypothetical situation several times to the respondent attorneys, asking, what if "a disease is sweeping the United States, and 40 million people are susceptible, of whom 10 million will die; can't the federal Government say all 40 million get inoculated?" Mr. Clemente avoided answering, which perhaps accounts for Justice Breyer's attempt three more times to get an answer. Justice Breyer then changed the hypothetical to whether the EPA could require all automobiles have anti pollution equipment if it turned out 60% of them caused pollution. Attorney Carvin conceded the commerce clause authorized Congress to enact such a law but pointed out only those who bought automobiles would be required to do so.

The problem with the respondents' argument is they attempt to limit the individuals affected in the market being regulated by the ACA to those purchasing insurance, leading to their protest that Congress is requiring an affirmative purchase of a product that would not otherwise be purchased. To hear the respondents say it, the 40 million uninsured are uninsured by choice, rather than because they cannot afford the premiums, and thus should not be forced to purchase an unwanted product. Justice Ginsberg's comparison of the ACA to the social security system is well taken, albiet, social security is funded by a tax, making it a different animal. The truth is, as many of the Justices pointed out, every person from the time they are born will at some point need to use health care. That is the industry that the ACA targets. The ACA mandates that health care is paid for by insurance, which the respondents concede is a proper Congressional power under the commerce clause. As Justice Kennedy pointed out, "the young [healthy] person is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that s not true in other industries." Thus their participation directly affects the price others will pay not just for insurance, but for health care. Health care costs go up because hospitals are required by federal law to treat those who cannot pay for their services, thus shifting the costs to everyone else. The respondents' solution that those who "choose" not to purchase insurance can be required to purchase it at the time they do need health cares serices, is not only unreasonable and naive, but implausible.

As Mr. Vermilli pointed out, 40 million Americans can not obtain health care insurance because of the cost of the premiums. If a point of sale requirement were placed on these individuals as argued by the respondents, the cost of insurance would essentially be the cost of the health service. Actuarially, the premium you pay is based on some calculus of the chance you will get sick and how much the health care you might need could cost. If someone shows up at the Emergency Room and endeavors to purchase insurance then and there, the chance that you will get sick is 100% because you are currently sick, and the cost is more or less calculable. So, the premium, from an actuarial point of view and the point of view of the insurance company should be the cost of the treatment you are seeking. Which brings us back to the uninsured showing up to the Emergency Room with no means of paying The cost would still be shifted to others with insurance.


1 comment:

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