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March 25, 2008

Must you buy health insurance?

An important element is being overlooked in the healthcare debate between the Democratic presidential candidates: namely, whether the plans they propose are constitutional.

The largest difference between their healthcare plans is that Sen. Hillary Rodham Clinton would "mandate" that everyone (with limited exceptions) purchase private health insurance. Although Sen. Barack Obama's plan also contains a mandate, it is much narrower – it is required only for children. Mr. Obama relies principally on subsidies, economies of scale, and regulation to achieve his version of universal coverage.

Are health insurance mandates constitutional? They are certainly unprecedented. The federal government does not ordinarily require Americans to purchase particular goods or services from private parties.

The closest we come is when government imposes a condition on the grant of discretionary benefit or permit. For instance, in most states, you must have auto insurance to drive a car, or you are required to install fire sprinklers when building a new house. But in such cases, the "mandate" is discretionary – you don't have to drive a car or build a house. Nor do you have a constitutional right to do so.

But Americans do have a constitutional right to live in the United States. Accordingly, neither federal nor state governments can require you to purchase health insurance as a "condition" for residency. The Supreme Court has drawn a distinction between requirements that are flat-out imposed by government and those imposed as a condition for discretionary benefits.

The health insurance mandate proposed by Clinton is similar to the one enacted in Massachusetts under former Gov. Mitt Romney and the plan proposed by Gov. Arnold Schwarzenegger for California. These "unfunded mandates" are unlike any form of government regulation we've seen.

In making the case for her plan to mandate private health insurance, Clinton said in a recent Democratic debate that not doing so "would be as though Franklin Roosevelt said, 'Let's make Social Security voluntary,' or if President [Lyndon] Johnson said, 'Let's make Medicare voluntary.' "

In fact, under the law, there's a big difference between participation in a government health program funded by taxes and privatizing such a program, with individuals forced to purchase private health insurance.

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Posted by healthinsurance at March 25, 2008 01:45 PM

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