Tuesday, December 14, 2010

U.S. District Judge Rules Against Health Insurance Mandate

After all the spin and misdirection of the health care reform debate, the legal process is going to renew debate on the critical, constitutional American issues. Most importantly, can the federal government force its citizens to buy health insurance? Can the federal government force Americans' involvement in any private market? A lot of complex, convoluted arguments about the the good the legislation will achieve have been used, but they all require the lynchpin of forced involvement. None of this intricate social experiment is going to work without mandated participation.

But judges are already calling a foul. Yesterday a Virginia U.S. District Judge ruled the mandate requiring Americans to maintain health insurance unconstitutional.  As U.S. District Judge Henry Hudson stated in his 42 page opinion, “At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage -- it’s about an individual’s right to choose to participate."

 As stated in a Bloomberg piece on the ruling: Hudson said the “unchecked expansion” of congressional power represented by the insurance requirement “would invite unbridled exercise of federal police powers.” No Supreme Court decision has authorized Congress to “compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” he wrote.

Judge Hudson's ruling will certainly be appealed and the insurance mandate may soon visit the Supreme Court. With the current composition of the Court, is is likely that the court will agree with Judge Hudson's opinion. What will happen to the legislation if the mandate is removed? 

As stated above, the insurance mandate is really the lynchpin in the reform bill. Without it, the reform bill just doesn't work. The legislation forces the insurance industry to open its doors to all comers without regard to pre-existing conditions. It sets price controls on the how much the industry can charge for its policies and also removes the industry's ability to limit their payout on each patient. The bill will bankrupt the industry, especially if the insurance mandate is not present.

The insurance mandate was implemented to moderate this strangle hold on the insurance industry. With the insurance mandate, the government forced some 40  million Americans into the insurance industry. The majority of these new clients were young and healthy, rarely utitlized health care, and did not have need for comprehensive insurance plans. Congress sold these Americans to the insurance industry to balance the huge financial losses the reform legislation would inflict on the industry.

Without these Americans being forced to participate, the whole house of cards will tumble. Health insurance companies, already doomed to eventual bankruptcy by the legislation, will immediately begin to fall. Health care reform will be shredded with a new set of legislators left to put together the pieces.

Legislators will be forced to revisit health care reform. They will decide if America should continue down this path of socialization, with a blatant takeover of the insurance industry. Or they can recognize the inherent, God-given rights of American people and the constitutional checks on American government. If so, perhaps true reform can take place with the restoration of freedom and resulting access and affordability in the medical market.

Rusty Scalpel