In response to:
Why the Mandate Is Constitutional: The Real Argument from the May 10, 2012 issue
Why the Mandate Is Constitutional: The Real Argument from the May 10, 2012 issue
To the Editors:
I admire Ronald Dworkin greatly, and I certainly defer to him on most legal matters, so it is with some reluctance that I take issue with his essay “Why the Mandate Is Constitutional: The Real Argument” [NYR, May 10]. I have several objections, most of which concern not the legal matters, but his more general comments about the virtues of the Affordable Care Act (ACA).
Dworkin exaggerates the benefits of the ACA. For example, he writes that “the act provides, among other benefits, health care insurance for the 16 percent of citizens who now lack it….” It does not. Of the 50 million uninsured Americans at the time the ACA was enacted, the law was designed to cover just 32 million, leaving 18 million still uninsured. Half of the 32 million would gain coverage simply by virtue of expanding Medicaid eligibility—something that did not require the whole apparatus of the ACA. So the mandate that requires uninsured people to buy private insurance, which is at the heart of the Supreme Court challenge, would cover only 16 million people, a mere 5 percent of the population.
He also refers to the Massachusetts mandate as the core of “that state’s apparently successful health care program, on which the national act was partly based.” But the Massachusetts plan, which has been in effect for five years, is rapidly becoming unsustainable. Health care now consumes 43 percent of the state budget, a percentage that has been growing, while expenditures on every other budgetary category—including education, human services, infrastructure, law, and public safety—have been shrinking. Although Massachusetts began with advantages the rest of the country doesn’t have—an already high rate of insurance and a large “free care pool,” provided by hospital and insurance fees, that was tapped to subsidize the new plan—it is still unable to afford it.
The legislature is now trying to contain costs by devising new payment methods for providers, while insurers are raising premiums, deductibles, and copayments. The problem in Massachusetts is that there was no way to control the costs of an inherently inflationary reform, just as there isn’t in the ACA. Massachusetts should be seen not as an inspiration, but as a warning.
Dworkin argues that there are national precedents for the ACA mandate to purchase health insurance. But is that true? The mandate is not like the requirement to pay for Medicare and Social Security through payroll taxes. Instead, it requires people to buy a commercial product from investor-owned companies at whatever price the companies choose to charge. In short, people are required to contribute to the profits and corporate salaries and marketing costs of companies like WellPoint and UnitedHealthCare. I don’t believe there is any precedent for that.
My objection to the mandate is not that it requires people to purchase insurance, but that it specifies they buy it from investor-owned companies, whose practices have done much to make our health care system the “unjust and expensive shambles” Dworkin accurately describes it as being. No one should be required to enter this treacherous market; it is not the same as paying for publicly administered services, like Medicare or police and fire protection.
Dworkin dismisses concerns that if Congress can make us buy private health insurance, then it can make us buy any other commercial product, arguing that public opinion would prevent Congress from unreasonably extending its power in that way (“politics supplies the appropriate check”). That’s a mighty thin reed to hold on to, given the recent record of Congress and its capture by corporate interests. I would feel better if we didn’t provide the precedent.
He is also too sanguine about the ability of regulations to stop the worst abuses of the private insurance industry, such as denying coverage for people with pre-existing conditions. The fact remains that these companies will profit by avoiding high-risk patients if they possibly can, and they will probably find ways to do so. The ACA does some of that work for them, by allowing them to charge up to three times as much for older patients as for younger ones, age being a good proxy for a higher risk of chronic illness. A few years ago, in a private discussion with a senior executive of America’s Health Insurance Plans, the industry’s trade association, I was told that if the regulations did squeeze the profits of the insurers, they would simply raise the premiums. There is nothing in the ACA to prevent that.
In a press conference on July 22, 2009, while the ACA was being crafted, President Obama said, “Now, the truth is that unless you have what’s called a single-payer system in which everybody is automatically covered, then you’re probably not going to reach every single individual.” He was right. Moreover, a single-payer system is the only way to do so while containing costs. Polls have shown that most Americans favor it, and a Massachusetts survey showed that physicians there prefer it to the state’s current system. I’ve advocated extending Medicare to everyone by dropping the qualifying age one decade at a time, and delivering it in a nonprofit system, something I believe the public would enthusiastically accept.
Dworkin, like many others, dismisses a single-payer system as unrealistic, saying it would be “politically impossible in the United States now, or in the foreseeable future.” But the fact that Congress lags behind public opinion is surely partly due to liberals accepting the premise that a single-payer system is off the table, while what is truly unrealistic is imagining that we can provide universal and affordable health care in a market-based system.
Harvard Medical School Boston, Massachusetts
Marcia Angell is an important expert on American health care. She has contributed excellent articles on that subject to The New York Review and I have learned much from her. My article was about the constitutionality of the Affordable Care Act, not about its merits, but I made plain my opinion that the act would make a considerable improvement in American health care and she disagrees. She apparently hopes that the Supreme Court will strike the act down and save the country from a precedent that allows Congress to force people to buy products from private companies. She thinks it reasonable to suppose that a new Congress would then pass a much more radical and effective scheme: a “single-payer” national health service funded entirely by government out of federal taxes.
I agree that such a scheme would be better than what the act provides, but I also agree with the writer who said, in these pages, that “such a system does not have the remotest chance of being legislated by our national government anytime soon.”* Liberal congressmen tried and failed to secure a “public option” supplement to the act that would have allowed the government to offer insurance in competition with private insurers. A single-payer system would be much more radical than a public option: even Senator Edward Kennedy, who was among the most powerful advocates of a single-payer system, long ago abandoned all hope of achieving it, according to Jeff Madrick, a former economic adviser to the senator.
In any case, it seems a mistake to dismiss the act because something better might conceivably take its place in the future. Reducing the age of eligibility for Medicare to fifty-five, while requiring payment of a premium, was in fact considered and rejected. Perhaps a similar arrangement, or the extension of standard Medicare, remains possible. If so, such changes should be pursued. But I believe it wiser for influential experts like Angell to continue to work toward improvements of this kind, taking the act as a base, than to revert to a status quo in which so many millions of Americans couldn’t afford insurance or were denied it even though they could. Scorched earth is never good policy.
Angell offers more detailed criticism of my article. She says that I exaggerated the benefits of the act in saying that it provides health insurance for the 16 percent of Americans who are now uninsured. My statement was more simplification than exaggeration, however. The Congressional Budget Office reports that without the act, or something like it, the United States would have 54 million uninsured by 2019; with the act the CBO predicts 23 million. Of the latter, a third will be illegal aliens, who will nevertheless continue to be entitled to emergency care. Another third will be people eligible for Medicaid but who fail to enroll. The last third will be those, mostly younger and single, who choose to pay the penalty tax—a maximum rising to 2.5 percent of income or $695, whichever is greater, by 2016—instead of buying insurance, or those who for a variety of reasons are not required to pay a penalty at all if they remain uninsured. The number of Americans whom the act will leave involuntarily uninsured seems marginal.
The Massachusetts plan has indeed been successful in significantly expanding insurance coverage. I agree that it has not controlled health care costs, which continue to rise steeply and unsustainably, both in that state and nationally. However, Massachusetts legislators have now introduced a bill that would cap the rate of increase of overall health care costs in the state at the rate of increase in the state’s gross domestic product, or, after 2016, at half a percentage point below that rate, and it would grant regulators a variety of enforcement powers. That bill might serve as a model for other states as well.
Still, it remains unclear how far health care costs can be curtailed. Greed and bad politics are no doubt an important part of the problem, but by no means all of it. Populations are growing steadily older and medical technology steadily more sophisticated and expensive. Even single-payer systems have proved unable to reverse the trend. Costs in the most famous of these—the British NHS—rose from £38 billion a year in 1997 to £102 billion today, and are estimated to reach £230 billion in 2030. Cost-cutting reform of the NHS remains a perennial challenge in British politics.
Radical imagination—and a political will that is hard now to anticipate—may be required effectively to confront the problem. But it would be a mistake to see the obvious justice of the act’s expanded insurance coverage as a step in the wrong direction. The act does contain provisions aimed at cost reduction (these are summarized at www.kaiseredu.org/issue-modules/us-health-care-costs/background-brief.aspx) though it is not clear that these will be particularly effective. I believe that more hope lies in the prospect that once voters realize—as someday they must—how much most of them have benefited from the act’s greatly improved coverage, it will become politically possible to add a public option provision that would indeed significantly reduce overall insurance costs.
Angell writes that the act forces people to buy insurance from private insurance companies “at whatever price the companies choose to charge.” It does not. It imposes a 40 percent excise tax on expensive “Cadillac” policies. It requires insurers to spend 80 percent of the premiums they receive—85 percent for large employer plans—on medical care (the average now is 70 percent) and to refund premiums if they do not. It imposes only a relatively low tax penalty on people who choose not to insure, and in that way provides an incentive for lower premiums. True, the act permits different premiums for different age groups. But that is defensible, and is in any case better protection against gouging than allowing insurers to “cherry-pick” within each age group by demanding exorbitant premiums from those at greater risk.
She worries that if the Supreme Court does not strike down the act’s mandate, Congress will then force people to buy a raft of other commodities they do not want. I am naive, she says, in thinking that politics can prevent such corruption when government has proved so easily controlled by “corporate interests.” I wish she had provided an example of what she has in mind. As I said, a statute forcing people to buy a particular industry’s product might well be unconstitutional for other reasons even if mandates are sometimes permitted. In any case, however, I continue to believe that the American public would be outraged by such coercion unless it was convinced that some emergency clearly required it. Angell fears that private companies have gained even more control over state legislatures than over Congress, but none of them, to my knowledge, has been able to secure a law forcing people to buy what they sell. When constitutional law does not stop them, politics does.