Saturday, April 26, 2014

Obamacare's Constitutionality and Employer Provided Health Insurance

     I will support legislation that will repeal the Patient Protection and Affordable Care Act of 2009 (ObamaCare), including the End the Mandate Act (H.R. 1101) and legislation similar to it.
     There are many reasons why the individual mandate to purchase insurance is not constitutional. It is not a tax on an activity; it is a penalty for failing to purchase health insurance. If the individual mandate were a tax, it would be an infinite percent tax on a zero-dollar item or transaction (i.e., the “act” of refraining from purchasing health insurance). Additionally, the exemptions that have been granted render this “mandate” not a mandate but rather a bundle of special favors; that they have been granted conflicts with the legal principle of equal protection under the law.
     Not only is the act of issuing a health insurance policy not commerce (as the Supreme Court ruled in 1869), refraining from purchasing health insurance does not even constitute trade. Without a constitutional amendment authorizing the federal government to be involved in the health care industry (except within the District of Columbia and the overseas territories), the federal government should have no role in regulating it.
     However, in 1944 the Supreme Court ruled that the federal government has the authority to regulate insurance (i.e., keep it regular and uninhibited) in pursuance of the Sherman Antitrust Act, in order to prevent unnatural monopolies in insurance sales.
     Given this authority, and the Obama Administration's admitted desire to work with Republicans to pass legislation that effectively drives down costs but doesn't resort to mandating purchases, I believe that there are many good reasons why the federal government should end the mandate and legalize the interstate purchase of health insurance (thus allowing insurers based in states with low average insurance costs to compete in states with high average costs).
     States might also wish to further cut insurance costs for patients by passing legislation providing for their health departments and bureaus – and health insurance cooperatives within them – to evolve into worker-consumer wholesale purchasing cooperatives (providing for a closer and more direct negotiation on prices and other issues between health workers and patients). Organizing bulk purchasing can, should, and must be done in order to cut costs and to create economies of scale powerful enough to balance the power of sellers, but when the State is more trusted and empowered to do so than the people and their enterprises through the markets, the results tend to be the exact opposite of what was intended.
     In order to improve the delivery of health insurance to people who need it (whether they are citizens or not), I will urge states to allow people to purchase real health insurance in the open marketplace, including affordable basic catastrophic accident and illness policies, and change of health status insurance.
     I will additionally urge states to refrain from implementing single-payer systems. Although it is not the federal government's business to order states to enact this or that policy on health insurance (besides requiring them to allow trade and competition across state lines), the monopsony which government single-payer systems wield derives from a special privilege to monopolistically compete in purchasing. Such states' purchase mandates act as regulatory barriers to interstate insurance purchase and sales, thereby driving costs up. I will support the augmentation of antitrust laws in order to apply to single-payer systems requiring universal coverage.
     Single-payer is also undesirable because it would require public taxpayer funds to subsidize the insurance of each and every health customer, including individuals who want expensive, dangerous, and/or medically unnecessary procedures. This would undoubtedly create nothing but more protracted budget battles and ideological in-fighting.
     I do not support any level of government taking steps towards prohibiting purchase of health insurance by agencies other than governmental entities; non-governmental alternatives must always exist, and government must not show preferences for any alternative through differential taxation.
     The federal government can and should close a tax loophole, by ceasing to exempt employees from paying taxes on employer-provided health insurance. This special favor has created financial incentives for leaving people without health insurance once they lose their jobs and become unemployed, because it is a benefit for people who stay employed, and a way to encourage them to refrain from purchasing outside plans. Although the federal government should eventually stop taxing earnings altogether, for the time being it should tax all compensation equally.




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