Supreme Court and the Individual Health Insurance Mandate

[Beet]

If it is upheld, it will have to be as an exercise of the taxing power. While I expect the Supreme Court would find that health insurance is Interstate Commerce (Indeed when it comes to how the Court views the Commerce Clause, the word Interstate has effectively been rendered irrelevant), I can't see any power under the Commerce Clause that could be used to compel people to engage in Commerce if they don't want to.

Perhaps, although I would argue that the compulsion to engage in commerce is far more lenient and libertarian the compulsion to pay taxes. In the former, you are free to choose who to buy services from; in the latter, you are forced to buy services from the government. If the individual mandate is struck down, Social Security and Medicare ought to be struck down as well, for you are essentially being compelled in engage in commerce with the government under these programs.

[Beet]

But the mandate is more than that. About 80% of the cost, at least for young people, which is where the action is here, is about their cross subsidizing older folks by being vastly overcharging them for their insurance premiums. I see no clear limiting principle for that 80% as the mandate's cost.  The government could just force one group of folks into commerce for a good in order to make it cheaper for other folks buying the good, by overcharging them, expanding the market or whatever.

Young people will one day become old people (unless they get sick, in which case the point is moot), when they will be subsidized by the next generation in turn. Over the course of one person's lifetime they will be the beneficiary at some point. The government is not discriminating between groups; the unit is the atomistic "citizen".

[Beet]

You guys I think are making a policy argument rather than a legal one. And SS is a tax.

What's the legal principle behind the abhorrent-ness of the so-called cross-subsidy?

Yes SS is a tax, but why shouldn't the substantive similarity between this and that count when considering the question of whether this fundamentally changes the relationship between the individual and the government (or the states)?

[Beet]

The good in question isn't health care, per se. It's health insurance. Some form of cross subsidy is inevitable in insurance. That's the whole concept; some people will come out winners, others losers, but the value added is derived from the reduction in risk at a lower cost than if everyone simply saved on their own. The concept is inherently tied up in the nature of the good being offered. Hence it's fundamentally different from all other markets where the absence of cross subsidy does not prevent the market from operating.

[Beet]

The mandate isn't that everyone must pay the exact same premium; it doesn't prevent insurers from doing what auto insurers do. The difference between this and auto insurance is, again, everyone is in the market whether they like it or not, only they do not participate in it properly, and this has a direct impact on those that do participate in it properly. If the purpose of regulation is to ensure the proper functioning of markets, then the mandate can be seen as a regulation necessary to the proper functioning of this market. Unless you think we should just let people die on the street.

[Beet]

The good in question isn't health care, per se. It's health insurance. Some form of cross subsidy is inevitable in insurance. That's the whole concept; some people will come out winners, others losers, but the value added is derived from the reduction in risk at a lower cost than if everyone simply saved on their own. The concept is inherently tied up in the nature of the good being offered. Hence it's fundamentally different from all other markets where the absence of cross subsidy does not prevent the market from operating.

There is no limiting principle there. That is true with any good. Just force folks into the market to get the price down and cross subsidize with price fixing.

Except that Congress requires hospitals to provide care for life threatening conditions regardless of ability to pay and without subsidy. In other markets, Congress does not force suppliers to provide the good. It does not say, "if people want to buy cars, then they will pay full price, but people who do not buy cars must nonetheless be given one if they need it to get to their job." Health insurance is the only type of insurance market where the good in its most valuable form must be provided regardless of whether the recipient has paid for it.

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I asked this question upthread, if not buying insurance actually criminalized you, or if it simply meant you make a choice to pay the penalty. I'd like some more clarification on this. Does it make you commit a misdemeanor, if you choose to pay the penalty?

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How deliberately? Age is only significant in that it is a factor that affects an individual's risk. But there are hundreds if not thousands of factors that affect individual risk. Everyone has a different level of risk. I don't see how age is unique here.

Also, what Nym is saying... yes, there is a Constitutional issue and Constitutional law is different from good policy, we get that. But the law also deals with reality, and terms such as 'liberty' also have a substance to them. They mean something in the real world. So if this mandate is substantively the same as a tax then the law should consider that.

[Beet]

Well, young people are also disproportionately uninsured, so they would benefit from having insurance, and they're disproportionately low income, so they would receive a large share of the subsidies going out under the law.

I'm just saying that dealing with the free rider problem and the cross subsidization effect cannot be separated out from one another. If one agrees that Congress is within its rights to deal with the free rider problem, then I argue that the cross subsidization effect is necessary proper for it to carry out that function. Because without it, then there is literally no way to deal with the free rider problem. And arguably, the emergency healthcare mandate to hospitals is a cross subsidy in the other direction, from those on insurance to those not on insurance, so all this is doing is righting the boat that was unbalanced by that earlier mandate.

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How is federalism dead? I really don't understand the federalism angle too well.

[Beet]

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Uhhh okay... I don't see the difference between this and what ACA actually does, but I'm just a stupid layman.

[Beet]

I mean, there may be an issue if Congress is saying that 'well, you cannot charge young people less than X' (of course, Congress already mandated that employes have to offer old workers the same terms as young workers on their health insurance; that's the biggest cross subsidy right there, and it's deemed constitutional). Will many young people be able to purchase insurance at cheaper rates than they could on the individual market today? Anybody have any interesting links that addresses this issue?

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Yeah. It's voluntarily and heavily incentivized. Just like buying health insurance would be under the other so-called 'mandate'.

[Beet]

http://www.dailykos.com/story/2012/06/16/1100591/-Justice-Ginsburg-sharp-disagreement-rate-will-go-up-next-week-and-the-week-after

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[Beet]

She noted that the severability of the law was "one question" the Court had to face, which was true from the beginning.  So, I don't think that tips a hand on anything.  She probably said it just so she could make the "broccoli" joke.

But I'm pretty sure the court will sever the law in any case.

Why?

There is no explicit severability clause and there are very reasonable reasons to not want the "must carry" and "must purchase" provisions severed.

No there isn't; the vast majority of this colossal bill has absolutely nothing to do with those provisions. No one with even a shadow of care for judicial constraint would ever strike down those portions.

[Beet]

She noted that the severability of the law was "one question" the Court had to face, which was true from the beginning.  So, I don't think that tips a hand on anything.  She probably said it just so she could make the "broccoli" joke.

But I'm pretty sure the court will sever the law in any case.

Why?

There is no explicit severability clause and there are very reasonable reasons to not want the "must carry" and "must purchase" provisions severed.

No there isn't; the vast majority of this colossal bill has absolutely nothing to do with those provisions. No one with even a shadow of care for judicial constraint would ever strike down those portions.

Judicial restraint does not mean that judges should get to pick and choose when they will apply severabilty.  Courts should not be expected to function as editors because legislatures are unable to write a law that says what they mean.  One aspect of this case is that it will likely establish clearer precedent concerning severability.  Considering that they spent the morning of the third day of arguments covering this very question, I don't see it as a slam dunk in either direction.  It's fairly clear from arguments that they will almost certainly consider some of the provisions to be inseverable from the individual mandate.  For them to come up with a means to leave other provisions intact if they strike the individual mandate would seem to require that they come up with a clearer standard of when severabilty does apply.  If they don't have a clear standard, then they will be acting like legislators instead of judges if they decide which parts can be severed.

Bullsh**t. Scalia basically said he's lazy and laughed it off. Forgetting that someone had to write the bill, and he's complaining about even reading it. They're not going to be editing anything. The standard is that the rule on what they're frickin' asked to rule on: the issue before the court. The parts of the law that haven't been constitutionally challenged shouldn't be constitutionally struck down. What's the justification for the court striking down a part of a law that hasn't even been contested as unconstitutional? The issue isn't even before the court, and they're going to strike it down just because they don't like it. There's no difference between that and dictatorship.

Heck, they might as well just rule that Romney is the winner of the election, like they did in 2000.

[Beet]

Great news. I have to give massive props to Chief Justice Roberts for his admirable adherence to judicial restraint in this case. It looks like Torie was right with respect to the Commerce Clause. Roberts will be one to watch. He knows how to move carefully and keep the Court out of searing political battles, which is right where it should be. And yes, I agree with his reasoning in this one, as well.

[Beet]

There's some subjectivity to the exact difference between something that is unlawful and something that is merely disincentivized by the law. To some degree, the difference is only that the former is categorized as a crime while the latter is not. But from a substantive functional standpoint, other factors must come into play-- for example, with unlawful behavior, the intent of the law is to eliminate all such behavior, whereas merely disincentivized behavior, the intent of the law is to reduce such behavior, but not necessarily eliminate all of it. Since Congress anticipated that millions of people would choose the pay the penalty and were fine with that, it can't be said that Congress intended to eliminate all uninsured in the U.S.

Another factor is simply how burdensome the incentive is. A tax on cigarettes that raises the cost by 100% from $3 a pack to $6 a pack disincentivizes smoking. A tax on cigarettes that raises the cost to $1,000 a pack effectively bans it. In this case, the tax penalty in ACA's case for not purchasing health insurance is relatively modest and based on the individual's ability to pay.

[Beet]

Never mind my own bs above.  Roberts was talking about the fact that not buying insurance is not a crime under the law; he wasn't talking about the lack of enforcement provisions on the tax.  My bad.  No points for me.  I'm going to desist from making observations about legal issues from now on, since I clearly don't understand them.  

I'm pretty sure you know more about this than 99% of the people opining about this on Facebook.

Also, no one is arguing that Obamacare is the last word here. The issue of rising costs still needs to be addressed, and a compromise may still be reached replacing the mandate, so long as it is replaced by something that provides for effective universal coverage.