24 March 2010

On Health Care Reform

14 state attorneys general, all but one Republicans, have filed suit to block health care reform from going into effect. While I have only actually read Virginia A.G. Ken Cuccinelli’s complaint, both actions (the other A.G.s filed jointly) are premised on the notion that the United States Constitution’s Commerce Clause cannot be used to compel citizens to purchase health insurance. The Commerce Clause, situated in Article I, § 8, states that “The Congress shall have the power…[t]o regulate commerce…among the several states….” This Clause, which has been interpreted broadly by the Supreme Court since the New Deal Era, allows Congress to regulate channels of interstate commerce, persons or things in interstate commerce, or activities arising out of or connected to commercial transactions. As the Court held in Wickard v. Filburn, and recently affirmed in Gonzales v. Raich, an activity needn’t be expressly “interstate” in character to fall within Congress’s regulatory ambit; rather, it need only have a non-tenuous effect on interstate activity.

No one, of course, seriously contests the fact that health insurance is, itself, a thing in interstate commerce. What opponents of the health care bill argue is that persons who will be required to obtain health insurance, or face a tax penalty, are not, by merely existing, themselves participating in interstate commerce. As Cuccinelli’s complaint contends, the “status of being a resident or citizen of…Virginia…is not even a non-economic activity affecting interstate commerce. It is entirely passive.” The logical extension of the argument (not made by Cuccinelli in his filing) is that if Congress can, by operation of the Commerce Clause, compel you to buy health insurance, why can’t it compel you to buy, say, a car from GM or Chrysler? Where does the line suggested by cases like United States v. Lopez (invalidating the federal Gun Free School-Zones Act of 1990) and United States v. Morrison (invalidating, in part, the Violence Against Women Act) ultimately get drawn?

Unless the courts (and, ultimately, the Court) elect to virtually repeal the New Deal by returning to a pre-Wickard reading of the Commerce Clause, this argument is unlikely to find purchase. Whether the mere fact of residence or citizenship is an activity affecting interstate commerce is not the relevant inquiry. What the courts are likely to find relevant is that all people are consumers of medical services. Indeed, what distinguishes compulsory purchasing of health insurance from, say, compulsory purchase of an automobile is that people are fulling capable of declining to purchase a car. However, people do not choose to use medical services in the way that they choose, or choose not to, buy a car. If an uninsured person suffers a heart attack, chokes on a fishbone in a restaurant, or gets injured in car accident, he or she will likely receive medical treatment. The cost of treating this uninsured person is a) borne by people who do have insurance in the forms of higher premiums, and b) shouldered by the taxpayers, who subsidize hospital’s emergency treatment of persons unable to pay; these are negative externalities which undoubtedly affect interstate commerce, and ergo fall comfortably within Congress’s regulatory ambit. Granted, there are libertarian arguments that we either ought to leave uninsured persons in medical distress untreated, or that we shouldn’t require hospital emergency rooms to treat all comers, or that we should simply refuse to subsidize such treatment (and consequently let many hospitals slide into bankruptcy); however, these policy ships have sailed. As long as we permit uninsured people to seek emergency medical treatment, not having health insurance will be an activity touching upon interstate commerce.

A broader philosophical point - one that would doubtlessly be rejected by conservative opponents of broad government regulation - is that health care is precisely an area where we should want the government to act. Our present health care crisis is nothing less than an epic collective action problem, and the transaction costs of fixing it privately are far too high to be surmounted. Doctors, patients, hospitals, medical schools, insurers, medical device manufacturers, and pharmaceutical companies all have competing, yet interrelated agendas that serve to drive the cost of health care higher and higher; this matrix of interests (perhaps analogous to the tangled, invisible web of toxic assets that dragged the global financial industry to its knees) is far too complex for the players to effectively unravel themselves. In such a situation, government is precisely the mechanism that we should turn to; only it is sufficiently empowered and democratically legitimate to impose a workable solution.

I suspect that among actual Republican policymakers that this is not, in and of itself, a controversial view. After all, many of them vociferously defended Medicare, basically government-run single-payer care, in their opposition to the far more market-friendly Democratic health care reform bill. However, congressional Republicans have, of late, been channeling their supporters in the Tea Party movement, an ideology so inarticulate and incoherent that it is hardly worth of the descriptor. Tea Partiers and their congressional sycophants view government with poisonous levels of suspicion; any expansion is not only regarded negatively, put as a violation of the Tenth Amendment to the Constitution, which simply announces that the federal government’s powers are limited. The Tea Partiers chronic mistrust of government goes well beyond healthy skepticism; it is the Reagan view that government is incompetent per se taken to its logical extreme.

But government programs are not de facto inferior to private solutions; a superior view is that government programs ought only to exist when there is no adequate private solution. This explains, for instance, the necessity for a Defense Department, or public schools, or Social Security: private alternatives on their own are not merely inferior; they are not feasible altogether. But note that none of these systems is wholly exclusive of private industry or actors: private military contractors are integral to the national defense; private schools serve those who prefer an alternative to the public model; and private retirement vehicles supplement Social Security income, and vice versa. So it is with health care reform: the government has eliminated certain insurance industry practices, will create a regulated exchange, and will impose the individual insurance purchasing mandate. Yet, at the core of all of this reform remains the existing network of private insurance companies, as well as the rest of the nation’s preexisting health care infrastructure. Indeed it is telling that Republicans have spent much of their energy launching wholly fictive attacks on the bill, claiming that it constitutes a government takeover of one-sixth of the economy, or that it will empower government “death panels” to deny health care to the elderly or the disabled. When you actually examine the bill itself, what you see is basically glorified regulation, coupled with the mandate and some subsidies; as President Obama himself noted, this may be “major reform,” but it is hardly “radical reform.”

All of this is not to say that there are no credible bases upon which to attack the bill. Cost is obviously a major concern: health care is projected to be a trillion-dollar expense over the next decade; its much bruited-about deficit-reducing qualities are largely dependent on Congress sticking to its guns and actually enacting the broad-based taxes needed to achieve those savings targets. Another interrelated concern is that it will not adequately control costs; the price of health care will continue unabated and taxpayers will be on the hook for a larger portion of the bill.

However, it is not credible to attack this bill as an assault on freedom, liberty, capitalism, or whatever other content-neutral value-laden buzzword one wishes to use. Government should act when markets fail, as the American health insurance market inarguably has. This is the entire purpose of having a government in the first place: in exchange for surrendering a certain amount of personal autonomy, we gain an institution capable of solving problems that we alone cannot. To assert that by its mere action government imperils our liberty and welfare is unsquarable with government’s very purpose.