Tuesday, February 8, 2011

Larry Tribe's Analysis Of The Health Care Insurance Mandate Is Wrong

From The New York Times, "On Health Care, Justice Will Prevail" by Laurence H. Tribe:
The justices aren’t likely to be misled by the reasoning that prompted two of the four federal courts that have ruled on this legislation to invalidate it on the theory that Congress is entitled to regulate only economic “activity,” not “inactivity,” like the decision not to purchase insurance. This distinction is illusory. Individuals who don’t purchase insurance they can afford have made a choice to take a free ride on the health care system. They know that if they need emergency-room care that they can’t pay for, the public will pick up the tab. This conscious choice carries serious economic consequences for the national health care market, which makes it a proper subject for federal regulation.
There are several reasons that the US Supreme Court case about the new health care law insurance mandate is not as clear cut as Laurence Tribe seems to believe.

Congress legislatively created the free ride. Congress had mandated in previous laws that emergency rooms cannot turn away patients because of an inability to pay. Congress can eliminate that service requirement as it also can require full repayment from the treated individual. Congress can eliminate the free riding that it self-created without the need to impose health insurance on every individual. The free riding is a self-imposed problem created by Congress and it cannot use a self-imposed problem to justify a mandate for health insurance.

The vast majority, according to the US Census Bureau, of uninsured individuals are people and children who are eligible and can, but did not, enroll in government paid heath care programs, such as Medicaid, CHIP, etc., young adults between the ages of 25-35 years old, and families with incomes high enough to buy health insurance.

To say that someone is free riding when a different government program than Congress expected to pay pays medical costs is a fallacious free riding argument.

To say that a group, such as young adults, who have a very low risk of health related costs or injuries, who make a rational economic choice not to purchase health insurance is free riding is again fallacious. To mandate a purchase of an uneconomical health insurance policy is without legal merit, especially since the health policy cannot be risk adjusted priced for the lower health needs of a healthy, no pre-existing medical condition, young adult.

The justices also need to look at the mandate separate from the costs of the health insurance to the covered individual. There is no law that requires Congress to continue to fund programs that will lower the cost to poorer individuals and families. Can Congress mandate that families buy something they cannot afford?

Funding is always at the discretion of Congress and The US Supreme Court will not interfere with the Congressional branch. It cannot require Congress to raise taxes and fund a health insurance program. The mandate has to be viewed separately from its funding. If Congress can mandate health insurance, it can mandate health insurance without appropriating funds to lower its costs.

Additionally, Congress did not allow for self-insurance by wealthy individuals who can afford a bare bones policy or no health insurance. Neither of these is allowed under the new law.

It would take a huge stretch of rational economic and legal thinking for the Supreme Court Justices to uphold the new health law insurance mandate.

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