by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
Government lawyers arguing their case to Federal Judge Roger Vinson said health
insurance is not
shoes or broccoli. Insurance is a "financing mechanism." So the
government’s case is that we need to force everyone in the country to pay
someone else to pay for their health care–all of their health care–so that
more people can have someone else pay for their health care.
This argument is flawed in a number of ways. First, the government’s claim that
insurance is simply a financing mechanism, and so not like other products,
leaves open what the difference is. Every product is a mechanism to some end.
Should we be forced to pre-pay for funeral expenses? Should children who move
back in with their parents after college pay a penalty to the government for
not renting an apartment, or should this penalty only apply after they reach
age 26 and become adults?
On a more practical note, having someone besides the patient pay for care has
been tied to higher health care prices, as the graph below shows. If insurance
is a financing mechanism, it is an inefficient one. The government’s claim
suggests we should force people into inefficient financing of our purchases
instead of just encouraging them through large tax exemptions as we already do
with insurance and home mortgages.
Having someone else pay for care means they get to decide what makes for
effective care. This effects who provides care, how they provide, and what
counts as care. For all the talk of payment reform, the most effective form of
payment in most cases is directly from the patient to the provider. The
government’s argument is that instead of forcing us to eat broccoli, the law
could easily force us to enroll in food purchasing programs
that then pay for our broccoli and other approved foods.
Judge Vinson has experience with other financing mechanisms
for health care. As he said during the hearing last week, he and his family
went without insurance and even had
a child while uninsured. He clearly did not become a burden on society as
judges in two
previous cases claimed in summarily dismissing challenges to the health
None of this makes it certain that the health care law will
be struck down, just that believing it is constitutional might qualify as one
of the six
impossible things supporters, like the Queen of Hearts, believe before
A number of writers and commentators find it the height of irony that a
single-payer system would not face this challenge. Their problem is that, while
constitutional, a single-payer system is even more unpopular, which is why
Congress went with the individual mandate in the first place. Does anyone
really believe that if ObamaCare is repealed or overturned, the next logical
step will be for even more direct government control? Only four more impossible
things to go.
No update next week. Enjoy the holidays.