Et tu, John Roberts?

That’s not the first time I disagreed with a Supreme Court decision. Probably won’t be the last.

It is a good reminder me that you can’t count on a small group of folks — no matter who they are — to agree with you. Just ask those who felt the Supreme Court put Bush in power in 2000.

And, after all, they don’t even agree with each other. It was a 5-4 decision. That means 4 Supreme Court justices disagreed with 5 other Supreme Court justices.

I found something a bit humorous while listening to the radio on the way home from work. Several news outlets were featuring folks who were elated by the Supreme Court decision. Several said that they now would be able to afford health insurance.

There’s an old saying in poker, if you don’t know who the patsy is, you’re the patsy.

These folks are the patsies. They currently choose not to buy health insurance. They will soon face a $2,000 fine for making that same choice. Congratulations to them.

It’s as if while cheering a decision upholding someone’s right to slap you, they proceed to slap you. You get a stunned look on your face, then realize, that’s exactly what you were cheering for a second ago, so you raise your hands and cheer again. Hooray! Then they slap you again.

As far as John Roberts goes, perhaps he took the Intrade odds, got rich and figured if the American people really don’t want it, they’ll vote in November.

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Parallel

Government action -> Unintended consequence -> More government action

In this 2010 EconTalk podcast, I learned that Stalin set a ceiling on the price of agricultural products. He thought this would generate a surplus of agricultural products. But, his price was so low that farmers could not cover their cost of production, so they stopped selling their produce.

Then, Stalin sent the militia to take the grain by force.

I find this to be a striking parallel to the individual health insurance mandate.

First, government (federal and states) contribute to making the price of health insurance high over several decades through employer tax preferences, state mandates, guaranteed emergency room care, pre-existing condition requirements and so forth.

That is similar to Stalin’s price control, but it’s a supply control. That is, rather than setting a maximum price, government is setting supply requirements.

Both of the government interventions distort incentives. Stalin’s price ceiling reduces incentives for farmers to sell their produce. The government health insurance supply requirements reduce incentives for people to buy insurance by increasing the price of it and making it easier to get medical treatment without insurance.

Next, people predictably respond to those distorted incentives. The farmers in Russia sell less produce. People in the U.S. purchase less health insurance.

Finally, government uses more force to try to fix the problem they caused. Stalin, rather than address the source of the problem by eliminating his price control, sends the army to force farmers to give up their produce. In the U.S., rather than eliminating the source of the problem driven by the supply requirements that cause fewer people to buy insurance, government plans to force people to buy an approved plan or face a penalty.

This is how government grows. It does something to solve some problem, but causes more problems. Few people recognize that government caused those new problems and looks to government to solve them. So government does more things to solve those problems, causing even more problems.

A question I’m surprised I haven’t been asked

“But, I thought you’d support the individual insurance mandate. Don’t you want everyone to buy insurance so they will be prepared for their medical costs? Isn’t that just good planning?”

From the airwaves

Last night, during a segment about health care and the Obamacare individual mandate, a caller to a local radio station talk show asked:

Let’s say the Supreme Court strikes down the mandate as unconstitutional. Don’t we still have the cost of all those uninsured who get health care? What are we going to do about that?

Here’s how I wish the radio hosts would have responded:

Do you think we would have as many uninsured if we stopped paying for their health care? I don’t. I think most would figure something out really quick.

Is that harsher than a $2,000 fine for not buying insurance?

At the very least, if you think we need some form of government health care assistance for folks who can’t afford insurance, why not use a model like food stamps?

Congress didn’t pass a law fining folks who don’t buy food. I imagine most folks would laugh if they tried. Rather, we provide resources for qualified individuals to buy food from the private food market. Pretty simple.

Singapore uses a similar model for health care and it seems to work.

My Individual Mandate

It’s simpler and more effective than the Obamacare individual mandate. And, it is Constitutional.

Rather than forcing people to buy insurance or pay a penalty to the government, here’s my mandate:

If you choose not to purchase insurance and you need medical care, we will expect you to pay for your medical care.

Some will say, “But what about the people who can’t afford insurance?”

I have three responses to those people.

First, check out the insurance rates in Missouri. A $5,000 deductible plan for a family of four runs around $300 a month. That’s not dirt cheap, but it’s affordable for many people. It’s about like a car payment.  If insurance is more expensive where you live, I suggest that you give serious thought as to why (psst…It’s because of your state insurance mandates — maybe you should elect a legislature that will enact affordable mandates).

If someone has new cars, premium channels and a smart phone data package, don’t expect me to feel sorry for them if they say they couldn’t afford insurance.

Second, if we got government out of medical care and insurance, we’d have even cheaper solutions that would make it even more affordable. Government involvement distorts the incentives (e.g. emergency room care mandate) that makes it more expensive.  Without government involvement and restrictions, we’d see more solutions along the lines of $4 Walmart prescriptions.

Third, after that, if you still have some people who can’t afford insurance I’d offer two solutions:

1. Donate money to a charity that provides affordable insurance those folks.

2. If we still must do a government solution, target low-income folks with a medical care credit that they will use to buy health insurance and pay deductibles. Why break the system for everyone else? Just fix it for them.

Update: As I was writing this, it came to my attention that the administration is trying to rebrand its mandate as an “individual responsibility” clause.  I think my mandate better fits that description.

Update 2: I like MikeM’s response in the comments to those who ask, “What about the people who can’t afford insurance?”

If they were expected to pay for their medical care, then they “could not afford not to have insurance.”  They would figure something out.

Commerce Clause for Dum-Dums

The Supreme Court hearing this week is about this one sentence from our Constitution:

From Article I, Section 8: The Powers of Congress:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes

Most people know this as “the Commerce clause.”  We usually hear the Commerce Clause as “Congress has the power to regulate Commerce”.  I wonder how many people know there’s more to it?

In my view, the debate breaks down as follows.

On one side we have people who incorrectly believe this statement empowers our Congress to force citizens of foreign nations and Indian tribes to buy something.

On the other side are people who correctly understand that this statement empowers our Congress to settle trade disputes between states and with foreign nations and Indian Tribes, on behalf of the U.S.

Some folks may claim to believe that this statement empowers Congress to force only U.S. citizens to buy things.

Such people would need to believe two things that I find far-fetched coming from a group of authors who were concerned about limiting the power of government to protect liberty from government:

  1. There is a significant difference between the meanings of the words “with” and “among” as used here.
  2. “States” or “among the several States” actually means “citizens of the United States”.

I find it far more likely that a group trying to preserve individual liberty from government after the learning the lessons of central and arbitrary power firsthand (granted, I admit, not all founding fathers was pure in this regard), actually meant this to be a rather dry power of Congress to settle trade disputes that arose due to laws passed by state legislatures.

For example, this power would be used to settle a dispute if two state legislatures disagreed on how they were to share a common waterway.

No matter the Supreme Court outcome, I’m not convinced that the authors of the Constitution meant this to be an absolute grant of power for Congress to do anything that sounds good that can remotely be tied to a trade between parties.

If that were the case, there wouldn’t be much need for the rest of the Constitution — including Article III, which vests the judicial power of the U.S. in the Supreme Court.