This week’s historic hearings at the US Supreme Court were political as much as they were constitutional. The justices borrowed the Republican framing of health care reform as one of individual freedom rather than the public’s health. However, high-quality, affordable health care is the “greater freedom,” as I explain in taking readers through the critical arguments at the Supreme Court.
The idea of individual freedom has dominated political discourse on the Affordable Care Act (ACA). However, the freedom asserted, namely, the right not to buy health insurance, is not particularly robust. It is purely an economic freedom for those who can well afford coverage. It does not intrude on personal autonomy, such as bodily integrity or privacy. Moreover, the right to liberty extends only so far as the individual’s actions do not harm others. By refusing to purchase health insurance, the individual does harm to others by raising insurance rates for everyone else.
Individuals who proclaim their right not to insure themselves are not merely imposing economic costs on others. They are making health care less affordable for the poor and working class, which is a much deeper violation of freedom. What kind of a freedom is it that allows individuals to shun their obligations to society and disregard the sick and injured? There is no greater freedom than to have a fair chance of a life with health and well-being.
Who Is the Free Rider?
Justice Alito argued that there were 2 kinds of cost shifting going on but focused almost exclusively on the smaller and less important cost shift. The smaller cost shift is the one whereby a young, healthy individual is forced to buy health insurance, thereby subsidizing the sicker or more disabled population. Complex cost shifting, of course, is in the very nature of health insurance.
The larger cost shift is the one that occurs when the uninsured individual suffers a catastrophic injury or disease and receives uncompensated care. Virtually everyone will become ill one day and need health care. By law, and by moral imperative, society will take measures not to allow uninsured individuals to suffer or die when they can be cared for. As Justice Sotomayor said, Americans would not stand for a system in which children in danger of dying were turned away from emergency departments. The major cost shift occurs when these free riders impose more than $60 billion every year through higher taxes and insurance premiums. Thus, all people who insure themselves, as well as all taxpayers, foot the bill for those who exercise their “freedom” not to buy insurance.
The Health Care Market
Chief Justice Roberts pressed on what he saw as the unfairness of the healthy subsidizing those in need. “The policies that you’re requiring people to purchase must include maternity, newborn care, pediatric services, and substance use treatment. [Not everyone will need these services,] and yet that is part of what you require them to purchase.”
Fair point, except that everyone who has insurance subsidizes a host of services they will never need. It is well within the discretion of Congress to make the policy choice that coverage should extend to all conditions reasonably needed. Everyone will not need mental health treatment, prostate surgery, or mammography. What kind of health insurance system leaves out services that are essential to a large part of the population—men and women, young and old?
The Act/Omission Argument
The Court’s conservative bloc focused intently on the act/omission distinction, suggesting that the government could not constitutionally regulate “doing nothing.” Justice Kennedy said the mandate was “concerning because it requires the individual to do an affirmative act. … You don’t have a duty to rescue someone if that person is in danger.” According to this argument, a person who chooses not to purchase health insurance is not engaged in commerce at all, and thus cannot be regulated.
But a decision not to purchase health insurance is far from doing nothing because it increases the insurance costs of others. Every time uninsured individuals get sick or injured—as almost all will, sooner or later—they “act” within the health care marketplace, thus affecting insurance premiums and coverage for many others. Thus, Congress is simply regulating the manner and timing of commercial activity.
The “Limiting Principle” Argument
Justice Kennedy argued that if Congress can force an individual to buy private health insurance, the government could force anyone to buy any product—the so-called broccoli argument. The Justice repeatedly asked for “a limiting principle”—in other words, are there any limits to the regulatory powers of Congress?
The easiest answer is that health insurance is a highly unusual and perhaps unique market in which virtually everyone will need the service and that the absence of that service can be literally a matter of life or death. Nor are there many markets in which an individual’s choice not to purchase the product has such direct and dire consequences on so many others. The limiting principle, therefore, is that health care is special, with few (if any) other markets that resemble it.
The Individual vs Collective Framing
The Solicitor General was placed on the defensive throughout the proceedings because he allowed the issues to be framed as a matter of individual choice. Certainly from any individual’s perspective, the ACA’s mandate on purchasing health insurance limits liberty—that is, if you isolate that single individual’s choice from hundreds of thousands of similar choices and if you fail to take into account the hardship imposed on many others.
The greater truth is that an insurance market is by definition about aggregate data and actuarial predictions, and it is a mistake to think of insurance from an individualistic perspective. This observation is doubly true for health. Public health is measured by the collective health and well-being of the population. By framing the arguments more from a population-based perspective, the Solicitor General could have shifted the tenor of the debate.
Does Health Care Reform Hang in the Balance?
Suppose the Supreme Court strikes down the individual purchase mandate but says that it can be removed while leaving the rest of the ACA’s provisions in place—a distinct possibility. If the Court invalidates the mandate, it has 3 options that, as Justice Ginsburg said, engage in “a wrecking operation” or a “salvage job.” First, a judicial activist would strike down the entire act (Justice Scalia: “If you take the heart out, the statute’s gone.”). Second, a judicial realist would leave all of the rest of the act in place (Justice Breyer: “I would stay out of politics, that’s for Congress not us.”). Third, the Court could invalidate only the provisions that require insurers to offer coverage to applicants without regard to preexisting conditions (guaranteed issue) and that prohibit insurers from charging sick people more than healthy ones (community rating). Justice Kennedy revealed a pro-business perspective, arguing that leaving these provisions would “impose a risk on insurance companies.” (Is it the Court’s job to make sure private companies do not suffer financial loss?)
Most ACA reforms could—and should—clearly remain intact because they are unrelated to the mandate, such as funding for public health and community health centers. The Court may well choose this position and leave the truly onerous choices to the political branch.
The Obama Administration doubled down, arguing that community rating and guaranteed issue cannot be separated from the individual mandate because they would result in a death spiral of rising premiums prompting healthy people to leave the insurance pool, pushing premiums even higher, and so on.
What would President Obama do if he had to make the hard political choices? In order to keep the heart of the reform and guarantee everyone affordable health care even if they are sick or disabled, the President would have to find a way to pay for it. The cost savings in the ACA are probably not enough to cover the full cost, and Congress is deeply resistant to increased general taxation. This would place the reforms in great jeopardy.
The only other option if the individual mandate is struck down is the one most likely to happen, but it would be deeply regrettable. That is, the popular reforms would stay in place, the young and healthy would delay buying health insurance, and everyone’s premiums for health insurance would rise. Is that what a decent society would want or accept?
About the author: Lawrence Gostin is University Professor and Faculty Director, O’Neill Institute for National and Global Health Law, Georgetown University Law Center, and Director of the World Health Organization Collaborating Center on Public Health Law and Human Rights.
About The JAMA Forum: To provide ongoing coverage throughout this election year, JAMA has assembled a team of leading scholars, including health economists, health policy experts, and legal scholars, to provide insight about the political aspects of health care. Each JAMA Forum entry expresses the opinions of the author but does not necessarily reflect the views or opinions of JAMA, the editorial staff, or the American Medical Association. More information is available here and here.