Score One for the Individual Mandate

This is the money quote from last Thursday’s federal court decision upholding healthcare reform and rejecting the charge that the individual mandate to buy health insurance amounts to an impermissible regulation of “inactivity” as opposed to interstate commerce:

Far from “inactivity,” by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants.

Ilya Somin says that the problem with this reasoning is that people who don’t buy insurance aren’t necessarily going to consume the same medical services they would have if they had it, so it is not really a case of regulating when and how as opposed to whether people will buy healthcare:

Of course, many people will buy the same service later, and for some the probability of doing so is quite high. But the individual mandate makes no distinctions on any such basis. It sweeps in nearly everyone. If the mere possibility that you might purchase a similar service somewhere else is enough to count as “activity” and therefore regulable under the Commerce Clause, then almost any regulatory mandate would be permissible.

On the first point, so what?  The fact that there are people at the margins who might make substantially different healthcare consumption decisions but for the individual mandate does not make a regulation directed at the mass of people who would not meaningfully less germane to interstate commerce.  Perfection of fit is not the Constitutional standard for exercise of the commerce power.

On the second point, the slope is hardly as slippery as all that.  That most people, regardless of their insurance status, will seek, and at least to some extent receive, whatever services are necessary to preserve their lives and health in our society is hardly a “mere possibility” — it is a given.  There may be extreme exercises of the commerce power that should give rise to concern about the creeping insinuation of government into personal decisions that are only tangentially related to economic activity, but this is not one of them.  And today’s Supreme Court has shown little hesitation in striking down regulations that are only pretextually related to commerce.

The bottom line: Score one for sanity.  But there will be plenty of opportunities yet for hysteria to prevail.

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