Ragbatz

Loose end amended!

Hardly matters now, but..

Under-30s are allowed to satisfy the mandate by purchasing bare-bones catastophic plans, obtaining “tin” level coverage, as opposed to the “bronze or better” mandate faced by their elders. This is not what one would expect from a Congress bent on targeting these goldenest of geese.

Christian Scientists The Amish and others whose deep convictions bar them from seeking relying on commercial health insurance or public programs to pay for health care are exempt from the mandate. This is exactly generally consistent with what one would expect from a Congress whose primary target is free riding behavior. 

A loose end: a mandate exception and what it shows.

Hardly matters now, but..

Under-30s are allowed to satisfy the mandate by purchasing bare-bones catastophic plans, obtaining “tin” level coverage, as opposed to the “bronze or better” mandate faced by their elders. This is not what one would expect from a Congress bent on targeting these goldenest of geese.

Christian Scientists and others whose deep convictions bar them from seeking health care are exempt from the mandate. This is exactly what one would expect from a Congress whose primary target is free riding behavior. 

Bogus morality tale meets bogus abstract theory. Bogosity ensues. (Update/repost)

For the record, the paragraph below is the precise spot in the Chief Justice’s opinion where the fable about healthy young adults subsidizing the coverage of older adults met up with the inactivity theory. Note how the fable both sets the emotional tenor of the argument and “proves” that the mandate targets inactivity.

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The individual mandate’s regulation of the uninsured as a class is, in fact, particularly divorced from any link to existing commercial activity. The mandate primarily affects healthy, often young adults who are less likely to need significant health care and have other priorities for spending their money. It is precisely because these individuals, as an actuarial class, incur relatively low health care costs that the mandate helps counter the effect of forcing insurance companies to cover others who impose greater costs than their premiums are allowed to reflect. See 42 U.S.C. §18091(2)I (recognizing that the mandate would “broaden the insurance risk pool to include healthy individuals, which will lower health insurance premiums”). If the mandate is targeted at a class, it is a class whose commercial inactivity rather than activity is its defining feature.

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Roberts, C.J. Slip opinion at 25.  

Given that under-30s can satisfy their insurance obligation with the most bare-bones policies and lowest premiums allowed under the mandate, does it make a lot of sense to suggest that Congress targeted young people?  

Here’s what the statutory section partially quoted by the CJ actually said:

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Under [the guaranteed issue and community rating provisions], if there were no requirement, many individuals would wait to purchase health insurance until they needed care. By significantly increasing health insurance coverage, the [mandate], together with the other provisions of this Act, will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower insurance premiums. The requirement is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.  

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This language strongly suggests that Congress targeted the mandate at a different class — one comprising deliberate free riders who absent a mandate would plan to buy insurance when, only when, and only as long as needed. 

If Mr. Call-Balls-and-Strikes thought that class had inactivity as its defining feature, why not quote Congress’s language in full?

Recognition of the free rider/adverse selection behavior that Congress identified as its target should have sustained the mandate -  even under a novel Commerce Clause jurisprudence that immunizes “inactivity”.  Roberts cut away statutory language pointing squarely to free ridership to make what remained appear to be pointing toward golden geese.  This is more like the work of a One-L than like that of the next  John Marshall. 

Learning To Love Broccoli

Rumored:  SCOTUS will strike the ACA’s purchase mandate and is wrestling mightily with whether the mandate can be severed from guaranteed issue and community rating.

But wait: the argument on severing cuts both ways.  If guaranteed issue and community rating are within Congressional power, but lead to disaster without the mandate, does the mandate doom guaranteed issue and community rating?  Or do guaranteed issue and community rating make the mandate a necessary and proper means to avoid disaster?

Now imagine the ABA, the Affordable Broccoli Act: guaranteed issue broccoli; community pricing, each seller must sell at same price to all consumers; and a broccoli purchase mandate.

Now imagine the ABA, this time with no mandate.  Can we keep the other broccoli market reforms without creating broccoli market death spirals, free-rider issues, or other market breakdowns? Yes, we can! Broccoli has always been available to people who decide only at the point of purchase whether to buy broccoli or not. And virtually every broccoli retailer has historically sold broccoli to his customers at a single market price.

So, Justice Kennedy, you were wondering what’s unique about health insurance? 

A dose of Coase, a cameo by Cardozo, and the proper scope of mandates.

“A dose of Coase would go a long way towards clarifying the reality that the issue at stake is not individual liberty, but individual responsibility.” K. Caves and E. Elhauge, The Atlantic, (May 23, 2012).

“The risk reasonably to be perceived defines the duty to be obeyed ….”  Cardozo, Ch. J., Palsgraf v. Long Island R. Co., 248 N.Y. 339 (1928).

POST, LITE VERSION

As long as an insurance purchase mandate is of like scope to the free-ridership costs potentially externalized to voluntary purchasers of the same product, the competing interests - in freedom from forced purchases - are reciprocal. Individual liberty is not at stake; individual responsibility is. The ACA’s guaranteed issue requirement lets a free-rider fund comprehensive medical services with insurance paid for when, only when, and only for as long as the free-rider finds that being  insured is cheaper than paying out of pocket. “The free-load reasonably to be perceived defines the mandate to be obeyed.”  Accordingly, a purchase mandate for comprehensive coverage is not barred by a liberty interest argument, even if that coverage exceeds “catastrophic” coverage. 

POST, PRO VERSION

I. The argument of Caves and Elhauge supports a purchase mandate for Bronze plans, even if Bronze plans would provide more than meager, “catastrophic” coverage.

Disputants on both sides of ACA-related catastrophic insurance coverage issues sometimes focus on what happens in hospital emergency rooms. But there are a number of providers of all sizes - from large hospital systems down to neighborhood family practitioners - who contribute care when inadequately insured persons become overwhelmed by costs beyond their finite means. When the costs of care exceed what the patient can handle without insurance, those costs are worthy of attention wherever the care was rendered. 

ER care gets particular attention because it is subject to statutory “must treat” provisions, like the federal Emergency Medical Treatment and Active Labor Act (EMTALA), which

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