The Mandated Health Insurance Outrage
FEBRUARY 23, 2010 by SHELDON RICHMAN
Filed Under : Health Care
The most outrageous aspect of health care “reform” is the insurance mandate: Every individual will have to buy government-defined comprehensive medical coverage (if it isn’t provided by his employer)—or be fined.
You must buy it. Who do these politicians think they are?
For those who wonder by what authority the government can make us buy insurance against our will, the Senate bill alluded to the Constitution’s Commerce Clause: “The individual responsibility requirement provided for in this section . . . is commercial and economic in nature, and substantially affects interstate commerce.”
How would an insurance requirement affect interstate commerce? The bill said that “The requirement is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.”
Fallacies abound. To begin, medical insurance isn’t really interstate commerce. One of the few sensible things proposed during the public discussion on medical care is the repeal of the federal ban on interstate purchase of coverage. Residents of California are not free to buy less-fancy, less-expensive policies offered in Arizona, but are stuck with policies made more expensive by California’s overbearing regulatory regime. Interstate sales would increase competition and lower prices, but the ruling party showed no interest in that idea.
The argument has more problems. The Commerce Clause has typically been invoked against barriers to interstate commerce, but the insurance mandate would represent the first time that individuals were compelled to buy a product or service in the name of making interstate commerce more effective. Even under the most expansive reading of the Commerce Clause, how does compelling the purchase of insurance qualify as regulating interstate commerce? We really have crossed a threshold.
The nub of the argument is that unless healthy people are forced to buy coverage, the insurance market won’t work properly because the new law compels insurance companies to cover sick people for no more than they charge the healthy. Obviously, that would not be good for the insurance market.
The individual insurance mandate, then, is a solution to a problem the bill itself would create.
Guaranteed issue is the culprit, and freedom is taking a back seat to a political objective, which is to disguise a welfare program as insurance and put us on the road to government-administered rationing.
The “reformers” are quick to point out that people without insurance go to emergency rooms for medical care and sometimes don’t pay their bills, shifting the costs to the rest of us. But Shikha Dalmia, writing in Forbes, notes that uncompensated care accounts for less than 3 percent of the country’s total medical bill.
One reason for uncompensated care is that emergency rooms are forbidden to turn away patients (even in non-emergencies) who have no means of payment. Who imposed that prohibition? The government, of course. That may sound humane, but one unintended consequence is a likely contraction of charitable care. Why set up facilities for the indigent if they can turn up at any emergency room?
Again we see Mises’s Law at work: Intervention begets intervention. Government action creates problems that politicians then use to justify more government action. Undoing the first intervention would help solve the problem, but politicians have little incentive to move in that direction.
Government has suppressed the free market in medical care on both the supply and demand sides. As a result, medical services and insurance are artificially expensive, pricing many people out of the market. Instead of removing the interventions and letting the free market—including mutual-aid associations and philanthropy—lower prices and create more widespread coverage, the politicians are piling on more market-suppressing measures. Freedom is the first casualty. But we can also anticipate an aggravation of the current system’s worst features.
Forcing individuals to buy insurance is an intolerable assault on our liberty—not to mention a massive subsidy to the insurance companies. (They’re mad the penalty is not greater.) How many more usurpations can we be expected to tolerate?
* * *
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