Pathologies of the health care system

Another good op-ed from John Cochrane in the Wall Street Journal about health care, What to Do on the Day After Obamacare.

Cochrane agrees that many of the problems in health care are caused by previous government meddling:

Most pathologies in the current system are creatures of previous laws and regulations.

And, he again writes eloquently on how these previous laws and regulations distort the medical care and health insurance markets to cause the very pathologies that Obamacare supporter think more regulation will fix.

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.

Government begets more government

I enjoyed this post from W.E. Heasley about government involvement in healthcare, on his blog, The Last Embassy.

Here’s a summary:

  • Obamacare is just the next in a long-line of government health care involvement dating back to World War II.
  • Obamacare is meant to solve the problems caused by that previous involvement.
  • Few people understand this. They believe the problems in the health care market are just somehow inherent problems of the health care market that need to be solved with government fixes.

The last bullet point is the kicker. That lack of understanding is what begets more government.  It causes us to vote for candidates who want to pile on more regulation rather than remove it.

The best solution is unwind the real causes of the problem, as Heasley dubs it, Obamacare 1.0, which is the government involvement in health care dating back to World War II.

Rather, we opt for Obamacare 2.0.  Here’s my prediction:  Obamare 2.0 will cause more problems, which may lead to Obamacare 3.0.

I’d rather reverse the trend.  Let’s go to Steve Jobs Care 1.0.

Much ado about rubbers?

In this post, I wrote why I think cost benefit analyses suck.  Here HHS bureaucrat Kathleen Sebelius gives a great example of a bad cost benefit analysis.

She explains:

The reduction in the number of pregnancies [from forced contraceptive coverage] compensates for the cost of contraception.

First, I think it’s silly that we are fighting over rubbers. Seems like we have more important things to concern ourselves with than whether Georgetown law students can afford their apparently rich tastes in contraception.

Rubbers are cheap and effective. If you can afford to buy a drink and McDonald’s you can afford a rubber.

But, that’s not why Sebelius’ CBA is bad.  It’s bad for a few other reasons.

First, she doesn’t appear to offer any evidence. Last I checked, a large majority of sex-having-folks in our country already have figured out arrangements for their birth control. If they don’t want pregnancies and want to have sex, they have strong incentives to figure this out.

It’s not clear that government-mandate-health-insurance-contraceptive coverage will increase the number of people who actually use contraception properly. I’d venture to guess that a big portion of unwanted pregnancies stem from contraceptive mistakes like forgetting to take the pill or improperly mounting the rubber, which government-mandated coverage will not solve.

Second, no alternatives are considered. A good CBA always consider alternatives so you can at least get some idea of opportunity costs.

For example, if there are some poor people who do not get contraception because they are poor, why not try a more targeted approach, like having an organization that addresses their needs? One is called Planned Parenthood. I heard a caller on a radio show this evening that works at a clinic that offers a range of contraceptive methods, free.

So, one alternative is a more targeted approach to address the folks, apparently like Georgetown law students, who can’t afford rubbers.

A third reason I don’t like this CBA is that it doesn’t consider potential unintended consequences. There are ways this could lead to more unwanted pregnancies and/or sexually transmitted disease.

I’ll mention one.

Perhaps, contraceptive coverage enables budget constrained folks to trade-up from condoms to the pill, which leads to more unprotected sex and spreads more VD’s.

Also, it’s probably a bit easier to forget to take a pill than it is to forget to put a condom on.

The fourth reason I don’t like it is because it presumes such low expectations of us to not be able to take care of basic functions. Folks, there are some things we should be expected to do on our own. Take out the trash. Pay our bills. And buy rubbers. They cost about as much as hand sanitizer.

Are we going to mandate that health insurance buy hand sanitizers and soaps too? How about tap water? Think about how much money insurance companies could save from reduced disease and sickness transmission if they did that.

How about toothpaste, floss and toothbrushes? These have the same CBA’s. And they’re silly because ultimately we should be smart enough to decide for ourselves that the personal benefits of these things are well worth the price, so we choose to buy them.

And those who don’t buy them probably won’t use them even its free.

Take note. Obamacare is not in full effect and we’re already fighting over rubbers as if not having to pay a buck for one directly is an inalienable right. I didn’t expect it would get this silly, this fast.

Steven Landsburg also has a good post on the subject.

Update:  Commenter Mike M asks (and was mentioned on W.H. Heasley’s blog, The Last Embassy):

 If the Obama administration sees “access” to (which they have defined as having in place a mandate that someone else has to pay for it) contraceptives as a “basic human right”, why do they prohibit me from using money from my Health Savings Account to purchase condoms?

Mike, I’m sure if you get Donna Fluke to argue for your case, the administration will grant you an exception soon.

Not what the Founding Fathers intended

I found this informative overview and editorial, The Constitutional Moment, of Judge Vinson’s ObamaCare decision in today’s Wall Street Journal.

I was especially pleased to see that Judge Vinson opened with this quotation from Federalist No. 51, written by James Madison:

‘If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”

And here are some key paragraphs from the editorial:

Congressional Democrats and the Obama Administration justified this coercion under the Commerce Clause, so it is fitting that Judge Vinson conducts a deep investigation into its history and intent, including Madison’s notes at the Constitutional Convention and the jurisprudence of the fourth Chief Justice, John Marshall. The original purpose of the Commerce Clause was to eliminate the interstate trade barriers that prevailed under the Articles of Confederation—among the major national problems that gave rise to the Constitution.

The courts affirmed this limited and narrow understanding until the New Deal, when Congress began to regulate harum-scarum and the Supreme Court inflated the clause into a general license for anything a majority happened to favor.

Yet even in its most elastic interpretations, the Commerce Clause applied only to “clear and inarguable activity,” Judge Vinson writes, the emphasis his. It never applied to inactivity like not buying health insurance, which has “no impact whatsoever” on interstate commerce. He argues that breaching this frontier converts the clause into a general police power of the kind that the Constitution reserves to the states. As the High Court put it in Lopez, obliterating this distinction would “create a completely centralized government.”

Regarding the argument that inactivity (not purchasing health insurance) is activity:

It is “not hyperbolizing to suggest that Congress could do almost anything it wanted,” he [Vinson] writes. “Surely this is not what the Founding Fathers could have intended.”

Regarding the argument that the Constitution’s necessary and proper clause justifies the mandate, even if the Commerce clause does not:

He writes that this clause “is not an independent source of federal power” and “would vitiate the enumerated powers principle.”

I have several thoughts about the decision.

First, all civics classes across the country should be studying this decision to demonstrate how our government was intended to work, with separation of powers and checks and balances.  This is a clear example of the judicial branch checking the power of the legislative and executive branches of government.

Second, it highlights how important the mindsets of judges are.   It’s not a stretch to believe that all judges will not agree with with Vinson’s decision.  We’ll see this when the case hits the Supreme Court.  It will be interesting to read the deciding and dissenting opinions — no matter how it turns out.

Third, I hope the Wall Street Journal is correct that this is a Constitutional moment.  For the past 80 years or so, government power has crept beyond its charter as a result of a groupthink shared by members of the legislative, executive and judicial branches.

With this mindset, the limit on government power wasn’t set by the Constitution, as it should be.

The question wasn’t what government was empowered to do.  The question was whether there appeared to be good intentions and a reasonable-sounding greater good rationale for doing it.

Those intentions usually sounded something like, “this will help the poor” or “this is for the children”.  And if you questioned whether the government was empowered to do such things or whether the program actually achieved its intended objectives, you were dismissed as being against good things (when in reality, you were for doing good things more effectively).

If the Supreme Court backs Vinson’s decision, I hope this will restore some balance in the powers of government and will encourage folks who would like to change the scope of government power to follow the process laid out by the Founding Fathers in Article V of the Constitution: Amendment.

Finally, I once had the good intention/greater good belief of government power.   Two insights caused me to change my mind.

1. This limit on government seems to work fine when the people you agree with are in charge and doesn’t work so well when the people you disagree with are in charge.  I can’t always count on the people I agree with being in charge.

2. I realized that much of the greater good arguments are false.

Unconstitutional Part II

Julian Sanchez agrees with me and explains why very nicely.  Here he is commenting on the surprising result of Federal judge on the Obamacare health insurance mandate:

It does seem like a surprising result, given the last century of Commerce Clause precedent, that anything plausibly describable as economic activity might be found beyond the power of Congress to micromanage. “Preposterous on its face,” even.

But isn’t it preposterous that it’s preposterous? Step back from that steady accretion of precedents and instead just ask how far a federal power to “regulate commerce…among the several states”—especially in the context of separate and parallel powers to regulate commerce with foreign nations and Indian tribes—can plausibly be stretched. Isn’t it the idea that “regulate commerce” could entail a power to require a private individual in a single state to buy health insurance that ought to seem kind of crazy? Shouldn’t we find it more intuitively preposterous that a provision designed for tariffs and shipping rules should be the thin end of the wedge for a national health care policy?

Years ago, my mom told me that two wrongs don’t make a right.  Turns out she was right.  Believing that two (or more) wrongs make a right is a logical fallacy. We’ll see if the Supreme Court agrees.

My guess is the Supreme Court decision will be split along ideological lines, unsurprisingly.  Here’s why.  Those on the left believe the Constitution is a living document that allows judges to interpret it however they see fit.   And often they will support a judges rulings that support this viewpoint with arguments that look very much like the ends justify the means.  We like the result of the ruling so let’s not worry about whether it is correct or not.

Those on the right also believe the Constitution is a living document.  However, the judges on the right generally do not believe the judicial branch is empowered to give the Constitution its breath.  They are not empowered to interpret the Constitution how they see fit.  They believe their job is to apply the law.

Granted, some interpretation will be involved in applying the law, especially on something like the Commerce clause.

But, those on the right tend to start with what was intended when the law was written and work their way from that when testing if something is lawful or not.

Those on the left tend to begin with the result they desire and work their way back from there to find the interpretation that enables that result.

Those on the right also believe the breath that makes the Constitution a living document does not reside with the Judicial branch.  Rather it resides in Article V of the Constitution: Amendment Process.    If you’d like to alter the scope and balance of government powers, great.  Use the amendment process to do so.


I agree.

From the Wall Street Journal:

A federal court ruled Monday that a central plank of the health law violates the Constitution, dealing the biggest setback yet to the Obama administration’s signature legislative accomplishment.

In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law’s requirement that most Americans carry insurance or pay a penalty “exceeds the constitutional boundaries of congressional power.”

It appears that Judge Hudson has a better understanding of the interstate commerce clause in the Constitution than most.

Addendum: It would have been so nice if the authors of the Constitution would have as clear as possible as to what they meant when they wrote it.  Perhaps they could have provide examples of what they meant.  Amazing that we still fight about what they meant over 200 years later.

For example, it’s pretty clear what this power does:

To borrow money on the credit of the United States

And this one:

To provide and maintain a Navy

This one too:

To establish Post Offices and Post Roads

But this one throws people for a loop:

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

Now, given that the “Interstate Commerce” clause is embedded between a clause empowering Congress to regulate trade with foreign nations (like setting tariffs) and Indian tribes, it seems clear to me that the this has to do with establishing a decision-making power to settle trade disputes when those arise between states.

For example, maybe one state’s legislature passes a law to inspect all people coming in from a neighboring state in order to impose  a tax on anything purchased elsewhere and the other state doesn’t like that.  The Constitution gives Congress the power to settle that dispute.

Or, maybe two states share a waterway on their border and dispute how that waterway should be used.  Again, within the power of Congress to decide.

I Voted Yes on Prop C

So did many others.    In fact, 71% of those voting agreed with me.  Enough to garner this major headline from the Drudge Report, linking to an article from

Blow to O: Mo Says No

This morning, Missouri-based conservative talk show host Chris Stigall has been criticizing media coverage of the Yes vote like this one, that editorializes Prop C “was seen as largely symbolic because federal law generally trumps state law.”

Apparently, the writers of this nonsense at one CBS affiliate didn’t have time to check with what was written by just yesterday:

On Monday, a federal judge ruled that Virginia Attorney General Ken Cuccinelli has legal authority to sue the federal government over the sweeping health care reform law. The Justice Department had earlier urged the judge to dismiss the lawsuit.

If you still believe the Missouri vote is mostly symbolic, Judge Hudson, the U.S. district court judge in Virginia disagrees with you (from the Wall Street Journal editorial on the Virginia decision):

Judge Hudson notes that ObamaCare “literally forges new ground and extends Commerce Clause powers beyond its current high watermark.” The core question is “whether or not Congress has the power to regulate—and tax—a citizen’s decision not to participate in interstate commerce…

This will be interesting.