By: Brennan Carley, Taylor Cavallo, & Dan Siering
The health insurance market in America is a national one in nature, and therefore under the purview of the federal government via the Commerce Clause in the Constitution. Mandating that all people be insured or else suffer a penalty is constitutional in that it fits into the power of Congress to regulate commerce between the states. The mandate discourages risky playing of the new insurance system and works toward making premiums low for all members of insurance pools.
The federal government absolutely can mandate that everyone have health insurance. The government stakes its claim to mandate on the power that it believes is given in the Commerce Clause of the U.S. Constitution, Article I, Sec. 8, Clause 3, which states that Congress shall have the power, “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Since the 1930s, the U.S. Supreme Court has recognized the importance of uniformity in law when it comes to regulating commerce. In an age when significant commercial activity is interconnected within the nation without great heed to state boundaries, the federal government’s role in regulating commerce has grown as a matter of practicality.
In one of the major lawsuits against the health care reform bill passed in March 2010, several attorneys general of the states joining the suit have not gone so far as to say that health insurance is not a form of interstate commerce. Rather, the lawsuits are grounded in a legal argument that distinguishes between interstate commerce of an economic nature and commerce that is non-economic in affect. The lawsuit, filed by 13 state attorneys general, with Florida leading, claimed, “Regulation of non-economic activity under the Commerce Clause is possible only through the Necessary and Proper Clause.” The suit claims that the health insurance market is “non-economic” in nature.
If there was a type of data that the American citizens were inundated with during the health care debate, it was the economic impact of the price tag of health care. One out of every $6, as a percentage of America’s GDP, goes toward health care. America’s health care system’s costs, compared to the average of most countries, are double.
Warren Buffet’s own remarks reflect the common sense conclusion that hefty costs of health insurance absolutely affect the economics of our nation. In maintaining that America’s spending on health care is unsustainable, Buffet added, “that kind of cost, compared with the rest of the world, is like a tape worm eating at our economic body.” The italics are my own, so as to show that the Oracle of Omaha himself views reform of the health care system as a national concern. This reform bill is projected to reduce future American deficits over the next 10 years by $138 billion. Let’s not prattle on with saying that the health insurance industry fits into a category of commercial activity not above regulation. It is in great part because of the gross expenses of health insurance that our entire country’s fiscal calamities are so great.
Given that regulation of the health insurance market is within the power of the federal government, the government has the power to penalize people for not buying into this system. To properly regulate the health care market, the government needs to be able to discourage people from staying off health insurance rolls, as the bill has done away with some of the significant practices of the current system. Insurers no longer have the ability to drop coverage to a person for having what is determined to be a preexisting health condition that led to a serious illness. Congress deemed the preexisting condition power of insurers as too often used unjustly against fair-paying policy holders who were denied coverage when illness made coverage necessary.
Since insurers now cannot turn away people from buying a policy on the basis that they have a preexisting health condition, it will become easier for people to wait to buy insurance until an illness develops or reveals itself. A cause of concern is that if too many people wait until they are seriously ill to buy insurance, premiums will be very high, as there will be a higher risk of illness among the many sick people buying insurance, counter to the need to lower insurance costs.
To discourage people from playing the system in this way, and to encourage stability in a market that is of obvious value to our economy, the government instituted a mandate for people to buy health insurance. This penalty for those who do not buy health care coverage encourages healthier people to purchase policies, thereby lowering overall risk of illness among policy holders, keeping premiums lower, and guaranteeing to all people a health care policy they can rely on in case of illness.
