Richard Epstein on the individual mandate and health care reform
December 16, 2010
Mark D. White
Thanks to The Wall Street Journal's "Notable and Quotable" column from Friday, I found Richard Epstein's piece on ricochet.com from Monday discussing Judge Hudson's decision in Virginia vs. Sebelius regarding the individual mandate in the Affordable Care Act. Predictably, it is brilliant, especially this part about cross-subsidization:
In making this position, the District Court rejected the view that the individual mandate was a necessary and proper offset to the Congressional decision to require all insurers to take customers without regard to their preexisting conditions. In the government’s view, the two issues are the opposite side of the same coin. If the system is going to give some individuals a subsidy, it must find a way to tax someone else to provide that subsidy. Hence the individual mandate.
Notwithstanding the unanimous support of the cross subsidy by the political classes, their use is not a sound idea. Cross subsidies are always unstable because they lead to overconsumption by the privileged class and massive resistance by the losers. In a real sense, a revitalized takings clause argument would condemn these as transfers of wealth from A to B, without just cause.
But here no one in the political elites of either party wants to challenge the correctness of the subsidy. So the argument now has to be that the only way to fund this is out of general revenues, not out of selective charges against those who do not wish to join in the system. As a matter of political theory, there is no clear rule that says if X group is entitled to the subsidy, we can somehow identify the Y group that is duty bound to pay it. So as a normative matter, it is hard to explain why the individual mandate has to be the flip side of the subsidy when general taxes are still available.
A larger point about state power is made near the end:
Virginia has drawn a clear line that accounts for all the existing cases, so that no precedent has to be overruled to strike down this legislation. On the other hand, to uphold it invites the government to force me to buy everything from exercise machines to bicycles, because there is always some good that the coercive use of state authority can advance.
Randy Barnett made a similar point (though more dramatically) in The New York Times' "Room for Debate: A Fatal Blow to Obama's Health Care Law" on Monday:
If economic mandates like this one are allowed, however, Americans will be demoted from citizens to subjects. They will have to obey any commands that Congress deems convenient to its regulation of interstate commerce. No more expensive tax credits and subsidies to raise taxes to pay for; Congress can just command you to buy its favored products. Forget cash for clunkers; just make Americans buy cars from G.M. Or make them undergo medical exams to save on health care costs. Gone will be a federal government of limited and enumerated powers established by the Constitution and repeatedly affirmed by the Supreme Court.
This is what happens when a government sets aside essential principles related to the freedom of its citizens in pursuit of a policy, no matter how well intended. Some things are simply not worth the cost (assuming they're worthwhile at all).
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