The Goal Is Freedom: The Mandated Health Insurance Outrage
How can they make us buy coverage?
Filed Under: Headline • TGIF
Tags: health insurance • healthcare reform
With the introduction of Senate Majority Leader Harry Reid’s 2,074-page health insurance nationalization bill, we can be thankful for one thing at least. It will most likely be the last bill of its kind introduced this year. Who’d have time to wade through another?
This doesn’t mean there is anything in the bill to be thankful for. Like its Senate predecessors and House counterpart, it should offend any advocate of liberty and good economic sense.
First and foremost among its defects is the individual health insurance mandate: Every individual would be forced to buy government-defined comprehensive medical coverage (or to have it bought by one’s employer). A fine up to $750 awaits anyone who defies the mandate.
As Shikha Dalmia points out in Forbes this week, the individual insurance mandate is the major outrage in the whole “health care reform” scam. I would say it’s the keystone. Remove it and most of the rest crumbles to the ground.
Who do these politicians think they are? Our lives are not theirs to dispose of.
Politicians love to sugarcoat their threats of force. So the Reid bill calls the mandate “shared responsibility.” To those who wonder by what authority the government can make us buy insurance against our will, the bill alludes to the Constitution’s Commerce Clause, which gives Congress the power to “regulate … commerce among the several states.” (For a fuller story on the clause, see this.) The bill says, “The individual responsibility requirement provided for in his section . . . is commercial and economic in nature, and substantially affects interstate commerce.”
How would an insurance requirement affect interstate commerce? The bill says that since without the requirement people wouldn’t buy insurance until they are sick, it therefore “will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums. 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.”
In other words, for the sake of making the insurance market work better, we must be forced to buy coverage. How’s that for a justification?
It’s amazing how many fallacies can be stuffed into one argument. To begin, medical insurance isn’t really interstate commerce. One of the few sensible things proposed during the public discussion on medical care is that the federal ban on interstate purchase of coverage be repealed. Residents of California are not free to buy less-fancy, less-expensive policies offered in Arizona. They 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 shows no interest in that idea. So how can this be about interstate commerce?
There’s more that is wrong with the argument. Typically, the Commerce Clause has been invoked against barriers to the free flow of interstate commerce. The Supreme Court has occasionally upheld the prohibition of activities (such as growing wheat for one’s own use in violation of an acreage-allotment program or dispensing medical marijuana) that were said to adversely affect interstate commerce. But the insurance mandate would represent the first time that individuals were compelled to buy product or service in the name of making interstate commerce more effective. The Congressional Budget Office calls it “unprecedented”: “The government has never required people to buy any good or service as a condition of lawful residence in the United States.”
Even under the most expansive reading of the Commerce Clause, how does compelling the purchase of insurance qualify as regulating interstate commerce?
The nub of the bill’s argument is that if healthy people are not forced to buy coverage, the insurance market won’t work properly. Why not? Because the same bill would compel insurance companies to accept all applicants for coverage, sick or healthy, without price discrimination. That is, the bill creates the incentive for people to opt out of insurance until they are sick. Obviously, that would not be good for the insurance market.
Self-Caused Problem
The individual insurance mandate, then, is a solution to a problem the bill itself would create. The authors invoke the Commerce Clause to protect interstate commerce from a threat they themselves pose to it. They could avert the threat simply by not imposing guaranteed-issue on insurers.
But of course the advocates of nationalized medicine wouldn’t do that. Guaranteed issue is at the center of their scheme. They want to proclaim that they brought universal coverage to America. Freedom must take a back seat to their 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 notes that uncompensated care accounts for less than 3 percent of the country’s total medical bill. To save $40 billion a year, we should spend more than $100 billion a year and lose more liberty? No thanks.
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 both on 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 propose to pile 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?
Pingback by TGIF: The Mandated Health Insurance Outrage | Anything Peaceful on 20 November 2009:
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Comment by Dr. Steve on 20 November 2009:
Sheldon, one of your best with great links. I will be passing this one on to several others.
Comment by Capt. A. on 20 November 2009:
Dear Mr. Sheldon Richman,
Standing by itself, the paragraph in which you pose the question/statement: “Who do these politicians think they are? Our lives are not theirs to dispose of.”
Yes, I’m afraid they are! (Your life belongs to the thugs!) Have you forgotten? These congressional thugatarians are the ones with the “guns!” Au contraire, the individual isn’t “free” in America and never has been! Freedom in America is feeling free and easy in your harness, as long as the government always maintains absolute control of the reins … and don’t you forget it, least it be proven to you. So…
You will do as you are told. Otherwise, in the end the jackbooted thugatarians will smash your face into the ground if you resist. Resist enough … you’ll get to see the underside of grass … forever!
Want true freedom, liberty, privacy and private property rights: get the hell out of the U.S. government’s jurisdictions and territories – and STAY out! Until the empire crumbles in its entirety to dust, there will be nothing but the master’s lash and the burdensome “yoke” (taxes) that you will bare, from birth to death. History is on my side in this debate. So is truth.
America is a place to be FROM.
C’est la guerre,
Capt. A.
Principaute de Monaco
GMT +1:00 CET
Comment by Bill on 20 November 2009:
Why hasn’t the Commerce Clause been invoked to challenge the federal ban on interstate purchase of insurance coverage?
Comment by Sheldon Richman on 20 November 2009:
Bill, I don’t know. Maybe it has. The Supreme Court has been mighty deferential to congressional assertions of power.
Comment by Neverfox on 20 November 2009:
Great article.
“The government has never required people to buy any good or service as a condition of lawful residence in the United States.”
Technically, that’s not true. Taxes are a condition of lawful residence in the US and that amounts to a requirement to buy 0the objects of government spending plans.
Comment by Sheldon Richman on 20 November 2009:
Neverfox, thank you. But I have disagree with your point. Taxes are not portrayed as one side of a transaction. No connection is claimed between paying taxes and getting services, and the amount of taxes paid is not linked to services received. The Supreme Court has ruled that paying payrolls taxes does not amount to buying into a pension plan.
Buying insurance under duress, I believe, is sui generis.
Comment by Neverfox on 20 November 2009:
Fair enough. I suppose I was really thinking of the idea that forcing us to hand over money to someone for something (even if that something is “staying out of jail”) is not new. But your point is well taken.
Comment by Danny on 20 November 2009:
No need for Congress to resort to the commerce clause. The income tax power will suffice. Everyone gets taxed and extra $750, but get a $750 tax credit with proof of insurance. No proof of insurance, no tax credit. Tadaah!
Comment by Sheldon Richman on 20 November 2009:
Danny, I see a glowing future for you as a congressman!
Pingback by The Mandated Health Insurance Outrage « thak’s cool links on 20 November 2009:
[...] The Freeman » The Mandated Health Insurance Outrage. More on the whole health insurance debacle. [...]
Comment by Norwegian Shooter on 20 November 2009:
The how isn’t as important as the why. There will be an individual mandate and there is a federal ban on interstate insurance purchase because the insurance industry benefits.
Pingback by The Goal Is Freedom: The Mandated Health Insurance Outrage « Conservative Thoughts and Profundity on 21 November 2009:
[...] The Goal Is Freedom: The Mandated Health Insurance Outrage Filed under: thefreemanonline — nhiemstra @ 10:27 am via: thefreemanonline.org [...]
Comment by Give Me Liberty on 21 November 2009:
I wholeheartedly agree. I am curious that nobody in the MSM even mentions that the single payer system in the U.K. is not mandatory. The NHS is available (with long waits) to all, but private health care is also readily available to any and all who can afford either private insurance or paying their own way. I suspect that will NOT be the case here, where everything becomes a mandate. See my blog post Why not a “Private Option”? at http://givemeliberty.blogivists.com/.
Comment by P. Scott Williams on 21 November 2009:
If this requirement becomes law, I will take my own life rather than comply. It’s not bad enough that I have to be unemployed for 22 months because of Big O’s economically illiterate tampering; I will not live in such a world. (I am not on “unemployment.” I am living on savings. I have never applied for a government handout [employers are mandated to buy "unemployment insurance"] and I never will – not even social “security” if it’s even still solvent by the time I get old enough for it.)
Comment by steve on 21 November 2009:
I would suggest modifying your data a bit. First, it is probably old. The Kaiser study to which I link below uses $40 billion as a 2004 number. I would think it larger now. Next, if you look through the Kaiser study, public and private insurance are picking up some of that cost. As ER care is usually much more costly, that portion should decrease. I have seen estimates on that cost savings, but do not remember them off the top of my head.
Then, for a fair analysis, I believe though you may disagree, one should look at the lack of economic contribution to GDP lost by the uninsured unable to work due to preventable illness. There is also the entrepreneurial stifling effect.There is still the freedom issue. We should let people opt out. But then, we should not have to treat them when they do show up. http://www.kff.org/uninsured/upload/The-Cost-of-Care-for-the-Uninsured-What-Do-We-Spend-Who-Pays-and-What-Would-Full-Coverage-Add-to-Medical-Spending.pdf
Steve
Comment by Sheldon Richman on 22 November 2009:
Steve, but is uncompensated care a higher percentage of the total than 3 percent? This of course is not my primary argument. If uncompensated care is a problem, free individuals in cooperative association would address it. First, compel no one to provide uncompensated care. Then remove any barriers to charitable clinics and hospitals. In the nineteenth century there was much uncompensated and low-compensation care. Yes,costs were shifted to others, sometimes in higher prices. But that’s part of living in society. There was no coercion involved. It certainly can’t be built into a case for turning insurance companies into public utilities.
Comment by J.J Lane on 23 November 2009:
Great – another perversion of the Commerce Clause to fit the ends of scurrilous politicians.
Comment by Tug on 23 November 2009:
This is not a matter, fundamentally, of intervention causing intervention, nor is “intervention” an appropriate concept to describe this and much other proposed and enacted legislation—such a term is far too kind, too bloodlessly academic, as if the proposed actions did not express the determined will of uneducated and unprincipled would-be, tin-pot despots. This is not even, really, a “problem” in the sense that it stands as something, unheard of and mysterious and troubling in its welter of branches and its portents, to be somehow “solved” as a question of public policy. It is not “the freedom issue” as some here have styled it.
What exists, to use certain ones of Sheldon’s words, is “an intolerable assault on our liberty.” And, I would add, on our rights, which are the foundation and safeguard of liberty. Freedom and individual rights are not one of the issues, here; they are the issue. The issue, it must be understood, is at its core philosophical and ethical, having nothing essentially to do with this way or that way of trying to jigger the economy or the health care system; or with tracing the spiderweb of effects that could foretell which groups might win or might lose were the proposed so-called laws to come into being; or with pointing out who is more vilely corrupt than whom.
If there be an outrageous affront to each man’s rights, his dignity, and his liberty, which even contradicts his certain knowledge of what leads to what; of what is and is not just; of what is and is not true; if it is a thing that must further hamper his ability to conduct his life according to his own judgment, his own resources, his own developed skills—will it be opposed until it is decisively defeated?
There’s the heart of the matter.
Comment by Val on 23 November 2009:
Have you heard of the free and reduced-cost, federally-funded health clinics all over the United States? In and near my zip code, there are 54 of them. http://findahealthcenter.hrsa.gov/
Comment by Dr. Steve on 24 November 2009:
Val, nothing is free! Have you not learned that yet?
Pingback by The Power to Tax Is The Power to Destroy | The Aperio Movement on 30 November 2009:
[...] if in response to last week’s TGIF, Ruth Marcus, Washington Post op-ed writer, tried to make a constitutional case for the individual [...]
Comment by Fredric Williams on 4 December 2009:
I think this can be best summed up by a poster available from http://www.despair.org — “GOVERNMENT: If you think the problems we create are bad, just wait until you see the solutions.”
Giving our friends, if we have any, the benefit of the doubt, we might recognize that the underlying problem here is a confusion of what is appropriately done by use of force, and therefore consistent with the role of government (whether ethical or not), and what might be appropriate only if done with the consent of the members of a voluntary society. What would be perfectly appropriate as a requirement of belonging to a society in which membership was voluntary is perfectly inappropriate when membership is compulsory.
In our present confused state, government and society are one. The result is that our consent is assumed. We are members of a closed society, whether we wish to be or not. Our option is to depart from the governed territory (in order to live in some other governed territory) or to obey. We are unfree.
One might suspect that a very large majority of Americans, at least at first, might willingly join a voluntary US Government co-operative (and its subordinate government co-operatives) — gaining such benefits as social security, medicare, public schooling, highways, airports, unemployment compensation, and other services not necessarily a part of the role of government. Others might opt to use none of these, pay nothing for their support, and assume responsibility for none of their obligations.
Until we make clear the distinction between the benefits which might be shared by members of society joined voluntarily and those provided by compelling our participation, lovers of liberty will continue to battle a delaying action along the road predicted by Marx in “The Communist Manifesto” and advanced by democracy and universal suffrage.
We are so very near the end of Marx’s ten-point projection that perhaps we might best simply seek ways to achieve the communist consummation: the fading away of government itself.
Comment by Tom Stiles on 5 December 2009:
This is a good article that focuses on a single facet of American government extortion of its citizens through the tax system. The only way left for us to control the federal government is to simply cut off its money supply. I have termed this, ORGANIZED ANARCHY. There is no intention of using physical violence here.
While we are at it, we need to have a discussion about human ethics and the oxymoronic term, business ethics. The two systems are mostly incompatible as humans have individual rights but corporations do not have those rights.
It is not the business of the federal government to force “we the people” to take care of corporate survival. Note how health insurance costs escalated when the “industry” was de-regulated and allowed to profit on health care premiums and investment money.
Now, if you get sick, you are a cost “outlier” or an expense that needs to be eliminated. Ergo, don’t sell insurance to someone who might get sick and need to use it!
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