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Posted at 5:11 PM ET, 03/ 8/2011

Give me liberty or give me health care -- the end

By Charles Lane
For those following my ruminations about the constitutionality of the individual mandate in President Obama's health-care reform legislation -- a group substantially smaller than, say, Sara Bareilles'sfan base, I admit -- it may come as a surprise that I actually think an individual mandate can be good policy.


Well, let's put it this way: I strongly agree with those who argue that the lack of universal health coverage in the United States is a big problem, morally and economically. In fact, every other day I wake up believing that we should just enact a single-payer plan and have done with it. Medicare for all would be a heck of a lot more straightforward than today's system -- forget S-CHIP, Medicaid, veterans' benefits, Tri-Care, gold-plated plans for union members, and the rest. Single payer would clearly be constitutional, too, under Congress's power to tax and spend for the general welfare.

Given the political impossibility and -- as I worry on alternate mornings - unsustainable cost of such a plan, an individual mandate to buy private insurance is a plausible alternative. It all depends how you do it, because one thing I believe in even more strongly than universal health coverage is constitutional government. I would much rather safeguard the latter than guarantee the former. Possibly, this is where I differ with other commentators.

Fortunately, there is no shortage of ways to devise a perfectly constitutional individual mandate, as opposed to the constitutionally questionable version in the Obama package.

Republicans have been mocked for supposedly supporting an individual mandate back in the 1990s, and then opportunistically discovering its constitutional defects today. But, as best I can tell, none of the proposed Republican mandates worked the way Obama's does: i.e., by means of a mandate to buy private insurance, subsidized in some cases, enforced by a cash "penalty" -- not an openly declared tax -- for all but religious objectors.

Like Obama's bill, moderate Republican Sen. John Chafee's 1993 bill declared that all citizens and resident aliens "shall be covered" and offered subsidies to help. But, quite unlike Obama's plan, it forthrightly added: "There is hereby imposed a tax on the failure of any individual to comply." No ambiguity as to what constitutional authority they're invoking.

Chafee's more conservative GOP colleagues, Rick Santorum and Phil Gramm, offered a variant. The federal government would provide a minimal amount of subsidized coverage, but if you didn't take it, you wouldn't be eligible to join a subsidized insurance pool for folks with preexisting conditions. In other words, you'd be free -- but you'd have to live with the consequences. And those consequences, under the bill, would include lesser protections in case you went bankrupt due to medical debts.

Again, I see no constitutional issue. The choice is yours: Join the government plan and reap the rewards; refuse it and continue on with your life as before, taking risks, which, depending on circumstances, might be perfectly acceptable to you.

The Santorum-Gramm plan, in fact, bears a faint resemblance to the individual mandate devised by liberal health-care expert Paul Starr of Princeton University. Starr has been warning, accurately, about "a popular backlash" against Obama's individual mandate for a long time, arguing that it "communicate[s] the wrong message about a program that is supposed to help people without insurance, not penalize them." Starr proposed giving people a right to opt out of the individual mandate, if they agreed in writing to forgo all of the law's benefits for the following five years: no subsidies, no guaranteed issue, nada.

Seems fair to me: Those who really don't want to deal with "Obamacare" can preserve their freedom; without imposing a "free-rider" problem on everyone else. Indeed, given the magnitude of the penalties in Obama's bill -- too low to induce total compliance, too high not to be annoying -- Starr's method might even prove more effective at getting everyone into the risk pool.

As Starr notes, this is roughly the way universal health care works in Germany, except that there, once you opt out of the system, you can never come back. Those Germans are tough.

In short, there are a number of ways to skin this cat that do not involve the Obama plan's peculiarly objectionable, and possibly unconstitutional, combination of paternalism and deceptively labeled coercion. I confess that Starr's plan is my preferred solution; it's so obviously superior to the one Congress came up with that I can't really understand why they didn't do it his way in the first place.

Now, of course, it's too late for a legislative fix, and the fate of universal health coverage may be in the hands of the Supreme Court's swing voter, Justice Anthony M. Kennedy.

By Charles Lane  | March 8, 2011; 5:11 PM ET
Categories:  Lane  | Tags:  Charles Lane  
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Comments

How about simply requiring people to put aside money for their own health care? They can pay doctors and hospitals as needed, and the money will still be theirs until they decide to spend it.

Posted by: vinyl1 | March 8, 2011 7:40 PM | Report abuse

But what would Gabby Giffords say about this if she could speak normally?

Posted by: tjtucker | March 8, 2011 11:15 PM | Report abuse

Want to know more about this individual mandate everyone is talking about? Healthcare reform droids can help explain key concept. http://www.healthcaretownhall.com/?p=3618

Posted by: JEngdahlJ | March 8, 2011 11:25 PM | Report abuse

Vinyl1 and others who suggest individuals be required to put aside money for their own health care have not yet faced any major (or minor) medical condition.

I had an appendectomy in 2009 for which the bill was $39,000 for one night in a two-person room, before adding the surgeon, anesthesiologist, and other costs of the actual surgery. Thank goodness I had insurance.

The parents of a premature baby, unless they are wealthy, can't begin to cover the costs of intensive care and on-going expenses.

The purpose of insurance is to pay for unanticipated medical needs, which are almost always beyond the resources of an average family.

In short, the "simple" solution proposed is not a solution--unless you are Bill Gates or a few other billionaires.

Posted by: spbphil | March 9, 2011 2:25 AM | Report abuse

This is exactly the solution I have been suggesting. Health reform is a good idea that happens to be unconstitutional as written. An opt-out provision could achieve the goals of the legislation without violating the commerce clause by doing away with the individual mandate. Inevitably, critics will say that if we had an opt-out we would have to be willing to let people who opt-out to suffer and die in the event of an emergency or life-threatening disease. But that misses the point. People should have choices, and even if they make the unwise decision to refrain from purchasing affordable insurance, we shouldn't feel bad about letting them suffer the consequences. Children should be covered no matter what, but if a person is old enough to vote for our leaders, they should be old enough to be entrusted to make decisions about how much risk they want to live with. I think a five-year opt-out is probably an appropriate time frame, though that could certainly be tweaked to achieve maximum efficiency and sustainability and to provide adults with opportunities to make decisions for themselves.

Posted by: mobrien83 | March 9, 2011 6:38 AM | Report abuse

Individuals should also be able to opt-in to the protections that prevent denial of insurance for pre-existing conditions by paying an annual fee if they don't want insurance. The amount could be about the same as the penalty in the mandate, or a little higher as appropriate. People could pay the fee and forego receiving insurance. Presumably they would not seek treatment they couldn't afford for everyday illnesses, but when and if they obtained a serious illness they could purchase insurance without worrying about being rejected for pre-existing conditions, basically, it's an insurance policy against being rejected for insurance if you become chronically or life threateningly ill.

Those who opt-out could obtain insurance under the same constraints of pre-ACA, and after five years of having insurance, they would fall under the broad protections of ACA.

Posted by: mobrien83 | March 9, 2011 6:45 AM | Report abuse

Clarifying my last point, those who opt-out could purchase insurance under the old rules *if and when they want to re-enter the insurance market, and after five years of being insured, they would be protected by ACA the same as everyone else.

Posted by: mobrien83 | March 9, 2011 6:48 AM | Report abuse

The concept of an opt out is a joke. People are not going to be allowed to die in hospital parking lots (thankfully) because of a financial choice. Federal law presently requires hospitals to stabilize emergency patients regardless of ability to pay. This law reflects a moral absolute of our society. This absolute does not presently extend to a single payer system or something similar, such as those of most modern societies, but even we draw the line at letting people die to maintain some fictional right to choose.

Posted by: UncommonCommoner | March 9, 2011 6:49 AM | Report abuse

If the alternative is a bankrupt system or an unconstitutional mandate then it isn't a joke at all. Even if emergency medical care for the opt-outnfolks is a moral imperative, which I disagree with but recognize there is a lot of room for debate, the system with the individual mandate still puts those costs onto responsible consumers, so not much difference. People who opt-out would be under the current system, which already bears those costs. Letting people choose when they are healthy how they want to be treated when they become sick or injured is no different fromnallowing people to choose the conditions under which they'd like to discontinue treatment for a deadly illness. We already have mechanisms for that called living wills. What's the moral distinction?

Posted by: mobrien83 | March 9, 2011 8:03 AM | Report abuse

"Vinyl1 and others who suggest individuals be required to put aside money for their own health care have not yet faced any major (or minor) medical condition."

If you put aside 10% of your income, by the time you were 40 you would have hundreds of thousands of dollars saved. Most people are relative healthy in their earlier years.

And if each individual had to pay, doctors and hospitals would have to cut their fees, or they wouldn't get any customers. Before health insurance came along, prices were reasonable and doctors did not drive Porsches.

Posted by: vinyl1 | March 9, 2011 8:07 AM | Report abuse

Opting out would mean you could keep the insurance you have today.

Please note that Sabelius has NOT defined the benefits for a "qualified" plan. I know for a fact my current insurance would not qualify because I have co-pays for all doctor visits. Those will be "illegal" when those portions of the law take effect. If I kept what I had now, I would pay premiums AND and penalty.

Posted by: kitchendragon50 | March 9, 2011 8:55 AM | Report abuse

Interesting Constitutional solution. However, what will happen to the "Opt-outs" if they do get seriously ill? They will end up at Public Hospitals and if they cannot pay, their care will be paid for by - guess who - you and me, that is the TAXPAYERS!

Posted by: alanki35 | March 9, 2011 10:01 AM | Report abuse

Interesting Constitutional solution. However, what will happen to the "Opt-outs" if they do get seriously ill? They will end up at Public Hospitals and if they cannot pay, their care will be paid for by - guess who - you and me, that is the TAXPAYERS"

Which is exactly what is happening now. What the conservatives who tout "personal responsibility" do not seem to grasp is that the present system IS a hidden tax on all businesses and people who are paying for insurance because they are paying for the uninsured right now. In doing so we defend two groups of people: folks who are truly destitute (whom presumably we would not let die) and freeloaders who would rather buy a new pickup or ATV than health care coverage for their family. The present system is ALREADY a tax on every taxpaying, insurance buying American individual and business that has resulted in a care (non)"system" that costs twice as much and has poorer outcomes than all the other industrialized nations.

Posted by: peter71 | March 9, 2011 10:30 AM | Report abuse

from another comment:
"And if each individual had to pay, doctors and hospitals would have to cut their fees, or they wouldn't get any customers. Before health insurance came along, prices were reasonable and doctors did not drive Porsches."

to respond to that: before health insurance came along, medicine didn't even have sulfa (< 1940), and average lifespan was much shorter.

The gains made by medicine in the last 70 years are miraculous. One problem is we have so many tools the old attitude of throwing anything possible at a patient, even if it has little or no chance at success, can't be maintained financially.

I agree that ACA has gone too far in the regulation of what is in the benefit plan. However, as others have commented, i don't want to finance free-loaders on my premium.

I have had two cousins in car accidents (not their fault) that resulted in hugh medical bills. The idea that the young are invunerable to health problems is a fantasy that us older people should help them recognize.

Posted by: dekittredge | March 9, 2011 1:02 PM | Report abuse

The issue of "healthcare availability" is really an issue of "healthcare costs" and no number of forced insurance can do anythgin about the cost. First we need to address costs. We need tort reform to reduce the doctors', hospitals', and other medical services cost for malpractice insurance. Second we need the increased investment in medical technology to lower that cost (cost of MRI, cat scan, etd.). We need the government to fund qualified students medical degrees with the agreement that those graduates would spend 6 - 8 years are GPs in areas where there are shortages of doctors...no other options. Finally, increase investment in pharmacutical R&D to lower the terrible costs of drugs. Quit trying to lie to Americans about the ability of the US to have a government funded medical for all, it is impossible financially and would simply drive all the people who want or are doctors away from the profession. This entire discussion is the worse constructed and most distorted of all current major issues....lies abound.

Posted by: staterighter | March 9, 2011 1:16 PM | Report abuse

"One thing I believe in even more strongly than universal health coverage is constitutional government. I would much rather safeguard the latter than guarantee the former."

Yeah, well, constitutional government doesn't much matter to you if you're dead.

Posted by: EthelredtheUnready | March 9, 2011 3:17 PM | Report abuse

"If you put aside 10% of your income, by the time you were 40 you would have hundreds of thousands of dollars saved."

According to the Census Bureau, the 2009 median income (meaning 50% of the population made more and 50% made less) for U.S. households (NOT individuals) was $49,777. If you started making $50,000 per year at 18 (incredibly unlikely) and saved $5,000 per year (10%) with a post-inflation rate of return of 6% - roughly what the stock market returns - you would have ~$220,000 after 22 years according to the financial calculator I used.

HOWEVER, 50% of the population does not average $50,000 per year in income. Thus, they will have less money.

Furthermore, that end total assumes NO deductions over the intervening 22 years. No deductions for annual physicals. No deductions for childbirth. No deductions for emergency room visits, medications, etc.

According to the Bureau of Labor Statistics the average American household spent $3,126 on health care in 2009. As best I can determine, that is not the spending on health insurance but on actual out-of-pocket expenses. According to this article, http://economix.blogs.nytimes.com/2009/07/21/how-much-does-health-care-cost-you/, the median cost of health care for American households - including insurance premiums and all other expenses - is $15,000.

So, $5,000 - $3,126 is $1,874. Invested over 22 years that leaves less than $100,000 at age 40. I hope the half of America making less than $50K doesn't run into any major medical problems...


"Most people are relative healthy in their earlier years."

The problem with you statement is the word "most". What do we tell the others? If they're going to die, they had better do it and decrease the surplus population?


"Before health insurance came along, prices were reasonable and doctors did not drive Porsches."

We also didn't have anywhere close to the array of medical capability we do now. As for prices, there is only so much collective bargaining can do to bring down prices of medications. Do you know the average price to develop a new drug? According to a 2006 article in Health Affairs (http://content.healthaffairs.org/content/25/2/420.full) the average cost of bringing a new drug to market, in 2011 dollars, is $1.02 billion.

By the time the drug actually hits the market, a company may only have 8-10 years left on its patent. If they expect to sell 10,000,000 pills per year, and have 10 years left, they have to charge $10.20 PER PILL just to recoup their R&D cost. That's $306, plus tax, for a month's supply. Let's say it costs 30 cents per pill to make the drug, and throw in a 25% per pill profit. That's $317.25 per month, $3,807 per year. No amount of negotiating will change that price more than the $27 per year profit.

That's a relatively cheap medication. Somebody who needs betaseron to treat their multiple sclerosis, and doesn't have insurance, can expect to pay around $30,000 for ONE year's supply - just the drug.

Posted by: SeaTigr | March 9, 2011 6:10 PM | Report abuse

to all,

frankly, i believe that it makes NO difference what any poster (including the undersigned) here has said or will later say.

imVho, when it reaches the high court, the SCOTUS will quickly/firmly declare "obamacare" to be UNCONSTITUTIONAL & reveal it to be the STUPID/UNLAWFUL idea that it demonstrably is.

yours, TN46
coordinator, CCTPP

Posted by: texasnative46 | March 10, 2011 7:16 PM | Report abuse

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