Its ‘Regulation’ if You’re Already There

By Mark Wilson

Reading the brief for the states opposing the Affordable Care Act, one is properly acquainted with the definition of a Jeremiad: “a prolonged lamentation or complaint; also, a cautionary or angry harangue.” The states’ brief is lean on legal arguments and long on exhortations that, if the Supreme Court upholds the mandatory coverage provision of the Affordable Care Act, we’re that much closer to a totalitarian dystopian society.

The states’ focus — and, it turns out, the focus of various Justices — is what “regulation” means. The Commerce Clause authorizes Congress only to regulate interstate commerce. Does this include creating interstate commerce? That’s the states’ framing of the issue, but it’s centered on a premise that may or may not be true: that people who choose not to purchase health insurance are not engaged in interstate commerce.

During the Nixon Administration, the United States made a conscious, voluntary decision that health care would be paid for by private insurance. Medicare would pay for the very old, and Medicaid would pay for the very poor, but everyone else was left to fend for themselves. Insurance works by calculating, and then pooling, risk. Poolingis key, here: an individual can’t insure himself unless he has a lot of money. For everyone who does not have a lot of money, insurance makes vicissitudes affordable. This is how insurance works.

But whether or not Congress has acted, a market exists. The problem with insurance, though, is that the people explicitly inside the insurance market (people who have purchased insurance) are affected by the people explicitly outside the insurance market; that is, people who have not purchased insurance. Putting aside the fact that health care is overpriced these days (because that’s the Faustian bargain we made!), your $10 co-pay not only goes towards your expenses, but the expenses incurred in treating someone who has no way to pay the sticker price of an emergency room visit. On a national scale, then, everyone who uses any kind of commercial health care service is in the market, and this is the interstate commerce that Congress is regulating.

In order for health insurance (as a subset of health care commerce, remember) to be affordable, health insurance must work like insurance. If the only people in the insurance pool are high-risk, then the price of health care, even for the insured, would be too high to afford. Low-risk people who choose not to purchase insurance (because they’re low-risk, after all) thus affect those who are insured by choosing not to purchase that insurance.

And health care is not like a car: all of us — every one of us, man, woman, and child — will consume health care at some point in our lives. Congress’ remedy to this problem may strike some state governments as far-reaching, but Congress didn’t get there first. Health care consumption already affected everyone to an “unprecedented” degree. Congress merely matched scope of the remedy to the scope of the problem.


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