Curing a sick system

The costliest piece of the healthcare reform law Congress passed this year is the subsidy it creates to help working-class Americans buy insurance. This new entitlement is not the law’s most controversial piece, however. That dubious distinction belongs to the provision that makes the subsidies necessary: the mandate that all American adults buy health policies, starting in 2014. To critics, this “individual mandate” epitomizes the intrusiveness and regulatory overreach that have characterized the last two years of consolidated Democratic power in Washington. To supporters, it’s a vital piece of Congress’ effort to make health insurance available to everyone.

Twenty-one state attorneys general brought two separate lawsuits against the mandate, and more than a dozen advocacy groups, trade associations and individuals across the country have filed their own challenges. Although the plaintiffs make a variety of constitutional points, their core argument is that Congress doesn’t have the power to force people to buy a product. Because if it did, they ask, where would that power end? Could Congress order people to sign up for a gym membership or eat five daily servings of fruits and vegetables? Could it require them to buy cars from General Motors or Chrysler, at least until the government had recouped its investment in them?

Two federal judges have expressed doubts about the individual mandate, calling it an unprecedented attempt by Congress to regulate economic inactivity. Those cases are still in their preliminary stages, though, and a third judge has upheld the mandate. The legal battles aren’t likely to be resolved until one or more of the lawsuits reach the Supreme Court. When that day comes, the justices should say the same thing about Congress’ ability to regulate health insurance that they’ve said several times about interstate commerce in general: The limits on what Congress may do are set mainly in the voting booth, not in the courthouse.

It’s not that the Constitution gives Congress unlimited authority — clearly, it doesn’t. But where interstate commerce is concerned, the Supreme Court has given Congress considerable leeway to decide how to achieve its regulatory goals. That includes the leeway to do things with which most Americans disagree.

Article I, Section 8 of the Constitution lays out the powers of Congress, one of them being “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” Another is “to make all laws which shall be necessary and proper” for exercising those powers. There’s no debate over whether the trillion-dollar market for health insurance meets the Constitution’s definition of interstate commerce; the justices settled that issue in 1944, in a ruling on an antitrust case against insurance companies. Instead, opponents of the mandate contend that it’s improper for Congress to push unwilling Americans into the insurance market.

Focusing on whether Americans are being forced to obtain insurance, however, overlooks the larger purpose of the healthcare law. Its objective is to overhaul the entire healthcare system, including the way treatment is delivered and public health is promoted. Everyone participates in that system, except possibly for a tiny fraction of the population that relies on faith instead of doctors and medicine.

Congress’ effort to improve the efficiency and quality of the system relies in part on extending insurance to as many individuals as possible. Having insurance encourages people to treat medical problems sooner and at lower cost, rather than waiting for crises and relying on emergency rooms for care. Extending coverage also should reduce the number of unpaid medical bills, which amounted to more than $57 billion in 2008, according to one estimate. When bills go unpaid, the costs don’t evaporate; they are passed on to the general public through taxes, insurance premiums and higher medical bills for the self-insured.

To reduce the number of uninsured Americans, the law requires insurers to cover people they’ve traditionally tried to shun — those with preexisting conditions — and not charge them higher premiums based solely on their medical histories. If the law stopped there, however, many healthy people would respond by waiting to buy insurance until they needed treatment, and then drop it when they were healthy again. That gamesmanship would trigger a vicious cycle of premium increases, making insurance even less affordable and defeating a central purpose of the reform.

To address that problem, the law’s authors added the individual mandate. By requiring all adult Americans and legal residents to obtain a basic level of coverage or else pay an annual tax penalty of up to $2,085, the law seeks to deter people from signing up for insurance only after they need expensive care. It’s not the only approach Congress could have taken, and it isn’t perfect — the penalty seems too low to stop healthy people from going without coverage or employers from ceasing to offer health benefits to their employees. But the mandate is clearly an important component of the reforms Congress is trying to bring to the healthcare market, a means to the end of increasing coverage, improving care and slowing the growth in costs.

The Supreme Court has repeatedly held that Congress’ power over interstate commerce can give it authority over activities that are local and seemingly noneconomic. For example, in 1942 it upheld farm quotas that barred wheat farmers from producing surplus grain for their own families, and in 2005 it ruled that Congress could bar Californians from growing marijuana for their own medicinal use. An important limiting factor on Congress, Justice Antonin Scalia wrote in a concurring opinion in the marijuana case, is that “such rules must be an essential part of a larger regulatory scheme” that could be undercut if the local actions in question were not regulated.

The individual mandate fits that description. The same logic would be hard to apply to a law that required people to buy a particular brand of car or take a congressionally designated route to better health. The standard may still be too permissive for advocates of smaller and less intrusive government, but congressional elections give them a way every two years to repudiate lawmakers who go further than they want Congress to go.

In fact, this year’s campaign is proving that point. Anger about the healthcare reform law has made it a top issue in the campaigns for Congress and even some state offices. And with “tea party” help, Republican opponents of the mandate may very well take control of one or both chambers of Congress, setting up a battle with the White House over the implementation of healthcare reform. That’s the sort of control over Congress that the founders intended.