Another Perspective

Twisting the Truth About Healthcare

It's simply a huge lie to claim that all Americans engage in healthcare commerce.

By 4.9.12

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If the Supreme Court upholds the health law's mandatory insurance, the ruling will likely turn on a lie rather than constitutional principle.

The Obama administration's legal case doesn't just stretch the meaning of the Commerce Clause. It also stretches the truth about healthcare consumption. Sadly, the oral arguments suggest that four, possibly five of the Justices, actually believe the administration's hocus pocus claims about who consumes healthcare. .

During the oral argument on March 27th, Solicitor General Donald B. Verrilli told the packed courtroom that all Americans are engaged in healthcare commerce, so Congress can use its Commerce Power to compel them to pay with insurance. Verrilli boldly declared that "this is not a purchase mandate." He argued that the law merely requires people to use insurance to pay for the healthcare they are already consuming or inevitably will consume.

The premise that all Americans inevitably consume health care is almost true for seniors, but they are not subject to the mandate.

For Americans younger than 65, the premise is false. According to yearly reports from the federal Agency for Healthcare Research and Quality, 50% of Americans are non-consumers or near non-consumers.

They account for 2.9% of the nation's health expenditures. Their mean annual expenditure is a tiny $238 a year, indicating that many spend $0 on healthcare. Yet the individual mandate would compel them to sign up for an estimated $5,000 annual health plan.

Are these non-consumers and near non-consumers foregoing healthcare they need ? Generally no, because 95.3% consider themselves to be in excellent, very good or good health. Less than half a percent reported being in poor health. The same people who are non-consumers one year tend to be non-consumers the next, because they're healthy.

It's one thing to regulate commerce. But how can the Obama administration stretch the Commerce power so far that it reaches even people who don't consume healthcare? Where is the connection with commerce? Justice Kennedy's opening question to Verrilli pointed to the problem. "Can you create commerce in order to regulate it? "

Verrilli answered, "That's not what's going on here, Justice Kennedy, and we're not seeking to defend the law on that basis.… what is being regulated is the method of financing health -- the purchase of health care."

Verrilli insisted that the individual mandate is nothing more than "regulation of existing commerce." He told the Court the mandate "regulates the method of paying for a service that a class of people to whom it applies are either consuming -- or inevitably will consume."

"Inevitably"? The data show otherwise. Yet, astoundingly, at least four, maybe five justices seemed to go along with the argument.

Last August, the bipartisan panel of judges on the 11th Circuit Court of Appeals were not bamboozled. The 11th Circuit was the only federal appeals court to challenge the fallacy that all Americans "inevitably" consume healthcare, and the only federal appeals court to strike down the mandate. The 11th Circuit judges warned that the mandate is "woefully overinclusive." It conflates "those who presently consume healthcare with those who will not consume healthcare for many years into the future." Compelling people to enter healthcare commerce is different from regulating them once they are consumers, ruled the 11th Circuit. Only the latter is constitutional.

During last month's Supreme Court showdown, that critical distinction was glossed over. Justice Sotomayor said "virtually everyone will use healthcare, " and Justices Kagan, and Breyer parroted the fallacy in so many words. Kagan called it key to the government's case.

In truth, the mandate forces healthy people to buy expensive plans they won't use. The money subsidizes insurance companies that in turn are forced to implement politically popular changes such as eliminating caps on benefits and waiting periods. A neat and tidy scheme, but hardly within Congress's enumerated Commerce power.

Oral arguments can be misleading, and it may be that the Justices ultimately will see that the Commerce Clause rationale hinges on the false claim that everyone is a healthcare consumer. Otherwise, this epic constitutional struggle could be decided not on principle but on a mistake.

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About the Author
Betsy McCaughey is a former Lt. Governor of New York and author of Beating Obamacare.