A limiting principle: there is no broccoli market failure

I am very far from an expert in law, so far, in fact, that I’m not making a serious legal argument in this post. But I do want to make one point based on Jon Cohn’s reporting of today’s Supreme Court hearing.

Both Roberts and Kennedy questioned Verrilli more aggressively, invoking arguments that came from the right – including, yes, references to broccoli. Over and over again, they and the other conservatives asked for a limiting principle – a reason to think approving the mandate woudn’t lead to unlimited federal power. Verrilli struggled to answer the question and, at times, seemed unsure of whether to call upon the Commerce Clause or Necessary and Proper Clause as justification.

There is a very clear difference between mandating broccoli purchase and mandating health insurance. I doubt it could be turned into a limiting principle suitable for court, but I’ll offer it anyway. First, if the government mandated purchase of broccoli, average broccoli price would rise. That follows from supply and demand, and I hope it is intuitive.

However, if the government mandates purchase of health insurance, average price of health insurance falls. That’s because non-purchase of health insurance has negative externalities (due to adverse selection) that non-purchase of broccoli does not have. Those externalities are a type of market failure. That’s the point of my JAMA Forum post. There is no such failure in the broccoli market.

Like I said, I don’t understand law enough to know if this difference (market failure vs. not) would be an appropriate limiting principle. Probably not. On the other hand, as Cohn writes, the participants in today’s hearing don’t seem to understand health care all that well.

As somebody who knows the policy issues, the hearing was incredibly frustrating to watch. Both judges and lawyers, on both sides, seemed not to understand the specifics of the health care market.

So, it’s even. That I don’t get the law has little consequence. That judges and lawyers at the hearing don’t understand health care markets is a big deal.


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