The Obama administration argued to the U.S. Supreme Court this week that people must be compelled to buy medical insurance (designed by the government) or the national medical insurance market will fail. Thus, Obamacare advocates say, the insurance mandate is consistent with the powers delegated under the Commerce Clause of the U.S. Constitution.
The argument, however, contains a fatal flaw. If the medical-insurance market would indeed fail without a mandate, it's only because of other mandates the government has already imposed. Thus the government has created the rationale for an extension of its own power.
The administration foresees two problems in the absence of the mandate. First, uninsured people will avoid routine and preventive medical care and go to hospital emergency rooms when they can't delay care any longer, raising costs to others. Second, some people will apply for insurance only after they are seriously ill. As a result, the insurance market will be dominated by sick people, making it unviable.
Both problems are government creations: emergency rooms by law must treat everyone regardless of ability to pay, and new laws are increasingly restricting insurance companies' right to refuse to cover "preexisting conditions" or to charge already sick people more.
Thus it is the regulatory regime that makes the insurance market fragile.
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Sheldon Richman (photo)