Must you buy health insurance?
Plans from Clinton and Obama may be unconstitutional.
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.
Taxation involves representation, as when Congress appropriates money and controls a government program for the general welfare. This describes Social Security and Medicare. But government cannot simply delegate its taxing powers to private business.
What representation do we have in the insurance firms whose products we would be required to buy, at prices and terms they set? Can we vote out an insurer's board of directors for denying claims or paying its CEO a multimillion-dollar salary? Here, too, the Supreme Court has drawn a distinction between taxes imposed by government and mandatory fees set by entities with private interests.
A health insurance mandate is essentially a forced contract, in which one party (the insurer) gets to set the terms. You must buy their policies, even if you prefer to self-insure, rely on alternative medicine, or obtain treatment outside the system. In constitutional terms, such mandates may constitute a violation of due process or a "taking of property."
Requiring Person A to give money to Person B is a "taking," whether or not something of value is given in return. Let's say the state required every resident to buy milk, on the rationale that milk consumption benefits public health. That's either a constitutionally forbidden taking (of money) or a violation of due process.
These constitutional rights aren't absolute. Given a compelling enough reason, government can interfere with your person and property. It can require, for instance, that your child be vaccinated before attending public school. But there is usually an opt-out, such as private or home schooling.
We are not aware of any opt-outs for most people in the mandatory health insurance plans being discussed.
There are far more sensible and constitutional ways to provide health coverage. Government-funded insurance (such as Medicare or single-payer insurance) or regulation and tax subsidies to encourage voluntary participation (as in Obama's plan) both contain costs more efficiently and avoid the slippery slope of unconstitutional mandates.
Before the candidates get too far in their health insurance proposals, it would be good to consider the constitutional and policy implications of requiring Americans to buy private goods from private companies.