There is an interesting bit of hypocrisy on all sides with regard to the arguments being made around Judge Vinson's ruling on the non-severability of the individual mandate from the rest of the regulations around private health insurance in PPACA, and the applicability of commerce clause.
On the one hand, up to know it has indeed been the proponents of PPACA, led by the administration, who have argued that the need for the individual mandate is indeed necessarily tied to other parts of the bill that we like notably the guarantee issue and community rating. So Judge Vinson is in effect just taking the administration at their word with regard to non-severability.
On the other hand, acknowledging this intimate connection is precisely why the PPACA proponents argue that the commerce clause does apply, since a decision by the healthy to not buy insurance would have broad effects economic effects notably on everybody else's premiums. But that would then invalidate Vinson's decision.
That both sides are trying to have it both ways points to the hypocrisy inherent in the debate as framed by those who left expanded and improved Medicare for All off the table.
1. The Hypocrisy of PPACA's Supporters:
On the one hand, in defense of Vinson's argument, Peter Suderman writing in the libertarian Reason magazine blog point out
Therein lies the problem for the law’s legal backers. As Vinson notes in his ruling, both the administration, which is implementing the law and defending it in court, and Congress, which wrote and passed the law, have made clear that the individual mandate is an absolutely critical provision. Vinson explains:
The defendants have acknowledged that the individual mandate and the Act’s health insurance reforms, including the guaranteed issue and community rating, will rise or fall together as these reforms "cannot be severed from the [individual mandate]." As explained in my order on the motion to dismiss: "the defendants concede that [the individual mandate] is absolutely necessary for the Act’s insurance market reforms to work as intended. In fact, they refer to it as an ‘essential’ part of the Act at least fourteen times in their motion to dismiss."
Vinson provides several examples, and also notes that Congress itself, in drafting the law's text, put forth a similar claim:
Congress has also acknowledged in the Act itself that the individual mandate is absolutely "essential" to the Act’s overarching goal of expanding the availability of affordable health insurance coverage and protecting individuals with pre-existing medical conditions.
As a result, Vinson concludes that "the individual mandate is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to the purpose of the Act." Essentially, the administration's lawyers argued that the health care law wouldn’t work without the mandate, and Vinson took them at their word.
The added irony, or hypocrisy, is that of course it was the Obama campaign that ran against Clinton and Edwards by claiming severability when they were for guarantee issue and community rating (and public option) but opposed to the individual mandate for adults.
2. The Hypocrisy of those denying applicability of Commerce Clause
But if we take Vinson at his word, and that of the administration and congressional supporters of PPACA with regard to non-severability, then that is because of the whole free rider issue. That the trade-off -- not only as a matter of politics, but of economics and policy -- for having guaranteed issue (that they have to sell you insurance even if you have pre-existing condition or are high risk) and just as importantly community rating (that your premium mostly based on a broader pool, and not just on your likely risks and costs) is that everybody has to buy in (individual mandate) even when they are young or healthy.
As Jonathan Cohn points out:
Vinson asserts that the decision not to carry health insurance has "zero" economic impact. But then, literally a paragraph later, he acknowledges that uncompensated care for the uninsured transfers $43 billion in costs to the rest of society. Later, he goes so far as to recognize that requiring people to get insurance is "necessary" for carrying out the universal coverage scheme Congress determined it wanted.
So if Vinson admits all of these things, why did he bother first to assert that forgoing coverage has "zero" impact? He's drawing a distinction between present and future commercial activity that doesn't make a ton of sense to me. (I'm going to write a separate post on that later.) My guess, honestly, is that Vinson is desperate to play down the link between decisions to forgo insurance and the impact on other people's premiums--a link that history and scholarship have established firmly. And that's because the link, if real, would place it within most contemporary understandings of the Commerce Clause's reach.
3. You can't make money insuring sick people.
You can't make money insuring sick people. Not as a matter of morality, but simply economics. Taking care of sick people is too expensive for them to pay for themselves.
This is true even if we also get other important and necessary allegedly cost cutting reforms, such as reduced pricing of drugs and procedures; primary care medical home and accountable care reimbursement; evidenced based medicine driven relative effectiveness care; reduction in overtreatment and unwarranted treatment and iatrogenic illness; and the health IT revolution.
Ever since Nobel prize winning economist Kenneth Arrow's seminal 1963 paper "Uncertainty and the welfare economics of medical care" (.pdf), we have known that health economics is different: Individual's do not and cannot make supply-demand cost decisions. Competition actually increases costs. And avoiding adverse selection, not covering sick people and dumping people once they get sick is the main basis on which the private health insurance industry competes. That is what they did, do, and will continue to do.
For the same reasons that the mandate is not severable from the rest of the bill, and for all the other reasons above, a single nationwide insurance pool remains the only economically viable policy. The reality is that so long as there are multiple insurance pools and for-profits, the main driver of the entire system is cost-shifting, pump & dump, adverse selection, etc.
The best policy -- which also happens to be easy to explain, popular with 50 to 65% public support according to repeated independent polling, and unchallengeable in its constitutionality, remains "Improved and Expanded Medicare for All": a single universal "All America" insurance pool. There should be no issues of adverse selection. Everybody-in and Nobody-out. Paid for by the same tax (e.g., 3-4% individual payroll deduction & 7-8 employer deduction in place of all other premiums and costs) system we pay for other federal government goods and services including social security, national security and payment on the interest of the national debt. There would guaranteed and automatic enrollment. In addition to getting rid of the problem of adverse selection there would be the savings from getting rid of the private insurance companies as a wasteful unnecessary intermediary. There would be the additional cost savings benefit from monopsony (single buyer, multiple sellers) in paying for services, equipment and drugs. There would be added benefits of global budgeting and strategic planning. At the end of the day, single payer is not a dream, it is only system that can actually work.
4. Some Action Steps:
- Everything you want to know about what what single payer is is and how it works.
- Learn about current version of HR-676
- Send letter to your congress critters saying you want even more and better than the health reform we g
