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Justices don’t understand insurance, health care, economics …

Justices don’t understand insurance, health care, economics …

Last updated on: March 28, 2012 at 11:35 pm by Fred Clark

Justices don’t understand insurance, health care, economics … 2012-03-28T23:35:20-04:00 Fred Clark

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Non-cognitive elites

The depressing news from the U.S. Supreme Court isn’t just that several of the more conservative justices seem willing to upend a century of legal precedent if it would score a win for their party.

The depressing news is that these justices do not seem to understand the Affordable Care Act, the Emergency Medical Treatment and Active Labor Act of 1986, the purpose and function of health insurance, the American health care system, or even the most basic aspects of economics.

I knew they were this partisan. I did not realize they were this ignorant.

Here’s a roundup of the lowlights:

Steve Benen: “There is no ‘Cornhusker kickback’“

Scalia doesn’t seem to realize that the so-called “Cornhusker kickback” wasn’t included in the Affordable Care Act; it was taken out before passage. Scalia probably heard something about it on Fox News, assumed it was true, and internalized his party’s talking points. More than two years later, the conservative justice is still parroting a claim that has no basis in fact — indeed, he’s practically boasting about it during Supreme Court oral arguments.

Scalia is bringing to the discussion all the sophistication of a House freshman appearing at a Tea Party rally.

And while this was a glaring example of policy ignorance, the larger issue is that the Scalia and other justices have routinely struggled this week with the basics of health care economics and the details of the law itself.

Charlie Pierce: “Tony Scalia’s Retirement Has Started Early“

It is plain now that Scalia simply doesn’t like the Affordable Care Act on its face. It has nothing to do with “originalism,” or the Commerce Clause, or anything else. He doesn’t think that the people who would benefit from the law deserve to have a law that benefits them. On Tuesday, he pursued the absurd “broccoli” analogy to the point where he sounded like a micro-rated evening-drive talk-show host from a dust-clotted station in southern Oklahoma.

Jared Bernstein quotes from Henry Aaron:

Perhaps the most glaring instance of the failure to appreciate what an externality really is came from Justice Alito who at one point challenged the solicitor general by positing that the cost of all of the care currently used by those who are uninsured is less than would be the cost of the insurance they would be forced to carry. That being the case, Alito asked, how can one say that the uninsured are shifting costs to the insured? This query is painfully detached from an understanding of what an externality really is, how insurance works, or what the impact of insurance would be on service use.

Dahlia Lithwick: “The Supreme Court’s Dark Vision of Freedom“

It’s always a bit strange to hear people with government-funded single-payer health plans describe the need for other Americans to be free from health insurance. But after the aggressive battery of questions from the court’s conservatives this morning, it’s clear that we can only be truly free when the young are released from the obligation to subsidize the old and the ailing.

… Freedom also seems to mean freedom from the obligation to treat those who show up at hospitals without health insurance, even if it means letting them bleed out on the curb. When Solicitor General Donald Verrilli tries to explain to Justice Scalia that the health care market is unique because “getting health care service … [is] a result of the social norms to which we’ve obligated ourselves so that people get health care.” Scalia’s response is a curt: “Well, don’t obligate yourself to that.”

John Cassidy: “Obamacare Supreme Court case is a bad joke“

Justice Anthony Kennedy, the swing vote on the court, said that the U.S. government had a “very heavy burden of justification” to show that an individual mandate to purchase health-care insurance was constitutional. Really? Only if Kennedy and his Republican-appointed colleagues are willing to throw out economic logic as well as seventy years of legal precedent, which, judging by their harsh questioning of Solicitor General Donald Verrilli, Jr., they may well be.

The economics isn’t very complicated. The health-care industry, which makes up about a sixth of the economy, is rife with inefficiency, waste, and coverage gaps. In seeking to remedy some of these problems, the Obama Administration made a deal with the private-insurance industry — the same deal Mitt Romney made when he was governor of Massachusetts. On the one hand, the federal government barred the insurers from discriminating against the sick and the elderly, thereby raising the industry’s costs. On the other hand, the feds obliged uninsured individuals to purchase coverage, thereby expanding the insurers’ revenues. … It was a straightforward instance of the central government seeking to redress the failures of the private market—something akin to imposing fuel standards on auto manufacturers, providing state pensions, and forcing banks to hold adequate capital reserves.

Charles Fried: “Health care is interstate commerce. Is this a regulation of it? Yes. End of story.“

There is a market for health care. It’s a coordinated market. A heavily regulated market. Is Congress creating the market in order to regulate it? It’s not creating it! The market is there! Is it forcing people into it in order to regulate them? In every five-year period, 95 percent of the population is in the health-care market. Now, it’s not 100 percent, but I’d say that’s close enough for government work. And in any one year, it’s close to 85 percent. Congress isn’t forcing people into that market to regulate them. The whole thing is just a canard that’s been invented by the tea party and Randy Barnetts of the world, and I was astonished to hear it coming out of the mouths of the people on that bench.

Mark Thoma: “Why We Need an Individual Mandate for Health Insurance“

Just read the whole thing. It’s short. It’s clear. And if you read it now, then in five minutes you will know and understand more about the individual mandate than either Antonin Scalia or Samuel Alito will ever bother to know or understand.

Scott Lemieux: “The Individual Mandate: Not a Slippery Slope“

The contention that upholding the ACA would allow the federal government to regulate **everything** hinges on the supposed distinction between regulating economic “activity” and “inactivity”; with the ACA, some conservatives claim, it is **not** having health insurance that’s being regulated — and the commerce clause only authorizes regulating economic activity. Of course this distinction proves essentially meaningless once you realize that not buying health insurance now means paying out of pocket later. Combined with the fact that states generally require hospitals to treat the uninsured in the case of emergency, to say that the uninsured are making a “free choice” is highly misleading. It’s government regulation that makes these choices possible in the first place.

But the distinction is irrelevant anyway. Whether “activity” or “inactivity” is involved, the Court has well-established standards on what the commerce clause authorizes. Generally, the problem being addressed plausibly requires a federal solution, and the proposed regulation — even if it does not itself regulate interstate commerce — is part of a larger regulatory scheme.

As Yale law professor Jack Balkin explains in a recent article, the individual mandate — whether it regulates “activity” or not — clearly meets this existing standard. Widespread problems with access to health care and skyrocketing costs are certainly big enough to plausibly require a federal solution. Furthermore, the individual mandate is an essential component of the ACA’s broad regulatory framework. Americans are generally okay with barring insurance providers from discriminating against people with “pre-existing conditions,” but this creates a “free rider” problem. Without the individual mandate, people could game the system by buying insurance only once they are sick, which of course would affect the whole country, not to mention bring down the entire insurance industry in the process.

The Rude Pundit: “Five Ways Broccoli Is Not Like Health Insurance“

Broccoli is a nutritious vegetable. Health insurance is a guarantee that medical care will be paid for by the individuals receiving it through their insurance companies and not by you and all of us.

Kevin Drum: “Explaining the Mandate in Language Conservatives Can Understand“

“For the 8 percent of people who didn’t have insurance, we said to them, if you can afford insurance, buy it yourself, any one of the plans out there, you can choose any plan. There’s no government plan.

“And if you don’t want to buy insurance, then you have to help pay for the cost of the state picking up your bill, because under federal law if someone doesn’t have insurance, then we have to care for them in the hospitals, give them free care. So we said, no more, no more free riders. We are insisting on personal responsibility. Either get the insurance or help pay for your care. And that was the conclusion that we reached.

“Everyone has a requirement to either buy it or pay the state for the cost of providing them free care. Because the idea of people getting something for free when they could afford to care for themselves is something that we decided in our state was not a good idea.”

— Mitt Romney, January 2012

Ed Kilgore: “An Unexpected Attack on Medicaid“

The Court wouldn’t strike down the Medicaid expansion unless it were willing to question the constitutionality of Medicaid itself, and it sure wouldn’t do that, right?

That’s not quite so clear after today’s concluding oral arguments.

Jon Green: “The Founding Fathers loved health care mandates“

Green points us back to a New England Journal of Medicine article from January, quoting this bit:

[In] 1790, the first Congress, which was packed with framers, required all ship owners to provide medical insurance for seamen; in 1798, Congress also required seamen to buy hospital insurance for themselves. In 1792, Congress enacted a law mandating that all able-bodied citizens obtain a firearm. This history negates any claim that forcing the purchase of insurance or other products is unprecedented or contrary to any possible intention of the framers.

and Green adds:

Not only did mandates pass muster with the Framers in Congress, they were signed into law by George Washington and John Adams. Those who say that the Founding Fathers would object to any governmental regulation of the free market should double-check their history. They won’t like what they find.

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