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The Courtroom of the Supreme Court Building, where the Court has sat since 1935.
Dr Peter Morici:: The US Supreme Court is hearing arguments whether the Affordable
Care Act requirement that all Americans purchase health insurance is an
unconstitutional intrusion on personal liberty, or a reasonable discretion of
federal powers to promote the general welfare.
Conservatives, by persuading a majority of Justices to overturn the individual
mandate, could reverse Washington's relentless push to over regulate individual
and business behavior, but they could ultimately instigate their worst nightmare
— a single payer system akin to the British system.
The vast majority of Americans believe that all citizens are entitled to some
reasonable access to health care. However, folks with chronic conditions or a
medical history indicating high risk often cannot purchase health insurance and
face financial ruin from medical bills.
Also, many people — especially young folks — tend to forgo health insurance
until they develop a chronic condition or otherwise expect to encounter large
medical bills. Consequently, individual policies, even for the healthy, are
often prohibitively expensive or their benefits severely limited.
Both groups often end up in emergency rooms and hospitals when conditions become
acute and can't pay their bills. The rest of us pick up the tab through
significantly higher health insurance premiums and government subsidies.
The Affordable Health Care Act would prohibit insurance companies from denying
anyone coverage or charging folks with preexisting conditions higher premiums.
To make this palatable to insurance companies, the act will require all citizens
to obtain health care coverage — or pay a financial penalty — and subsidize
coverage for low-income individuals.
Never before has the Congress required individuals to purchase a product, and
this has caused conservatives to cry, what's next, we must all eat broccoli?
Obamacare advocates argue that the Constitution empowers the Congress to
regulate interstate commerce, and the medical industry surely is an interstate
market; however, throughout our history, this power has only been applied to
businesses and individuals who choose to participate in markets — to how they
make, sell or buy a product. It has never been invoked to compel citizens to
participate in a market.
On a more practical level, advocates of Obamacare argue the individual mandate
is necessary, because we all purchase health care and the only way to ensure
that everyone — including those with chronic conditions or without
employer-provided plans — have reasonably priced access to health care is to
require everyone to buy insurance.
Maryland already compels insurance companies to take all comers and not
discriminate in the rates they charge, but the state does not impose an
individual mandate. Hence, such a requirement is not necessary to spread the
extra cost of insuring individuals with preexisting conditions or without
employer coverage across the entire insured population. Rather, it was just a
political deal between the Obama administration and insurance companies — the
latter will get millions of new healthy policyholders and attendant profits.
Obamacare could be implemented without the individual mandate but for the fact
that insurance costs are rising too rapidly, and each year more Americans — now
totaling 50 million — become uninsured. Requiring health insurance companies to
cover all comers without price discrimination would accelerate health insurance
inflation and the exit of millions more Americans from the health insurance
system — simply more small businesses and individuals would find coverage
Eventually, the ratio of uninsured to insured would become too high to
accommodate the acute needs of the uninsured, when they can't pay in emergency
rooms and hospitals, by passing costs on to the insured population. That would
cause the insurance system to collapse.
By the end of the decade, Americans would have a choice — either watch folks
without health insurance suffer and die when their financial resources run out —
or finance health insurance for them by extending government run programs, such
as Medicaid, to the entire uninsured population. It is likely the democratic
process would result in the latter with some individual co-pay on an ability to
No matter how poorly government programs were run, millions of insured Americans
and their employers would find opting out of private insurance in favor of the
public option too attractive, and America would back into a single payer system
— one much like Medicaid.
Professor, Robert H. Smith School of Business, University of Maryland,