Winning Over the Supremes on Healthcare
BusinessWeek’s Peter Coy makes a persuasive case that, in order to save its healthcare law, the Obama administration has to dig deeper than its standing commerce clause defense.
Administration lawyers won over a Clinton-appointed Western District appeals judge with that argument, but failed to impress a conservative Eastern District judge who reviewed the same facts and deemed the law unconstitutional.
The thought is that Anthony Kennedy, the U.S. Supreme Court’s swing vote, might not see it the government’s way unless administration lawyers convince him that Obamacare is not a massive government overreach. It must also sell Kennedy and at least four other justices on the idea that, without the insurance-purchase mandate that is at the heart of the law, the entire reform will crumble–and the nation will be worse off than before.
Coy:
“The best case against the slippery slope argument isn’t even a legal one. It’s in an amicus curiae brief filed in November in a broader Florida case by 41 top economists, including three Nobel laureates, Kenneth Arrow of Stanford, Eric Maskin of Princeton, and George Akerlof of Berkeley. They argue that health care has unique characteristics that justify the congressional mandate—and since other markets such as food and housing don’t have those characteristics, Congress will never have any justification to intervene in them to the same degree.
“The economists’ argument bears attention. Arrow, 90 years old, has been probing the peculiarities of the health sector since 1963, when he wrote a much-cited paper, “Uncertainty and the Welfare Economics of Medical Care,” that’s mentioned in the brief. Arrow and the other economists say—in agreement with the Obama Administration—that a health insurance system that must accept all comers but can’t require everyone to join will quickly enter a death spiral. Healthy people won’t opt in until they need coverage, so many or most of the insured will be sick and costly. As a result, insurers will have to raise rates, pushing the last few healthy customers out, forcing rates on the rest to go even higher, and so on until it leads to collapse. Amitabh Chandra, an economist at Harvard University’s John F. Kennedy School of Government who joined the amicus brief, writes in an e-mail: ‘We don’t let people buy car insurance after they’ve wrecked their cars, or after we find their house is on fire. For the same reason, the individual mandate is absolutely key.'”
The health-care act has split the nation, Coy asserts. “Nineteen states have signed on to Florida’s challenge of the act. Yet the mandate is necessary if Obama’s health-care plan is to succeed. The onus is on the Administration to show why the mandate is both constitutional and beneficial, and why it won’t send the nation down a slippery slope to autocracy. If the Administration succeeds in doing so, the healing of the health-care rupture can begin.”
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