Political Hay

The Free Rider Problem

Why Mitt Romney's mandates could complicate the legal case against Obamacare too.

By 6.6.11

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Last week, Mitt Romney formally announced he was running for president. On Wednesday, a three-judge panel of the 11th Circuit U.S. Court of Appeals will hear arguments on whether to reverse a Florida judge's ruling that key portions of President Obama's federal health care overhaul are unconstitutional.

Romney agrees that the new federal law is unconstitutional, as argued by 26 states and the National Federation of Independent Business in their lawsuit. Whatever the courts decide, he also favors the law's repeal. But as long as Romney continues to defend the individual mandate, the main front in the constitutional battle over Obamacare, his candidacy could undermine both positions.

As governor of Massachusetts, one of Romney's biggest legislative accomplishments was a bill promoting universal medical insurance coverage. While the Democratic-controlled legislature pushed the proposal further to the left, from its inception it shared the basic design of Obamacare: a mandate requiring individuals to purchase health insurance, government-run insurance exchanges, and subsidies for those who cannot afford coverage.

State-level mandates do not raise the same constitutional questions as federal mandates. Romney has taken pains to say that what might fit in Massachusetts, which already had a relatively small uninsured population, would not work in other states. But he also continues to defend his health care law as something that did work for Massachusetts, including the individual mandate.

Politically, the problem is obvious. The similarities between the two plans make it impossible for Romney to argue against Obamacare as forcefully as he otherwise could. The plain fact is that the Massachusetts health care law has led to longer medical wait times, more crowded emergency rooms, and increased costs. Imposing the same policies under even less ideal circumstances elsewhere is likely to produce similar results. Romney cannot point any of this out. Instead he is reduced to arguing that Texas, with its larger number of uninsured, cannot afford Massachusetts' luxuries.

Romneycare also undermines the political argument against the individual mandate, which opponents regard as an infringement on both the Constitution and personal liberty. To support Romneycare but oppose Obamacare requires one to lop off the second half of that argument, rendering it more procedural than moral. In an era with unfortunately little respect for the Constitution and the rule of law, this weakens the anti-mandate position.

This problem extends to Romney's supporters as well. In an interview last week, radio commentator and law professor Hugh Hewitt defended the individual mandate in principle: "[M]andates at the state level have never been unacceptable and still aren't unacceptable except to a handful of libertarian purists." Hewitt proceeded to make all the pro-mandate comparisons favored by Obamacare partisans, hoping this distinction will prove good enough: "The Massachusetts plan was constitutional and Obamacare isn't."

But this individual mandate obstinance could undercut the constitutional argument as well. Romney claims the Massachusetts mandate was necessary to solve the free-rider problem, calling it a matter of "personal responsibility." When uninsured people wind up in the emergency room, he once explained, "someone has to pay for the health care that must, by law, be provided: Either the individual pays or the taxpayers pay."

As it happens, free riders figure prominently in the legal case for Obamacare: the cost of uncompensated care substantially affects interstate commerce. Judge Roger Vinson, whose anti-Obamacare decision is being reviewed this week, acknowledged this. Vinson summarized the Obama administration as arguing that these "unique elements of the health care market" with "economic implications for everyone" ultimately "belie the claim" and "defeat the argument" that "the uninsured are inactive."

Even if true, that shouldn't be the end of it. Slavery substantially affected interstate commerce, but at the time nearly everyone believed a constitutional amendment was necessary to abolish it. As late as the early 20th century, most people believed the prohibition of alcohol required an amendment. But most federal judges today are not such strict constitutionalists. Two of the judges on the panel this week were appointed by Bill Clinton, the third by George H.W. Bush.

Since uncompensated care and the inactivity of the uninsured have emerged as central points of contention, it helps to be able to point out that Obamacare-style policies in Massachusetts have actually made cost-shifting worse. So will the federal plan, as millions are pushed into government-funded health programs where they will consume more care without the feds picking up the entire tab. Medicaid, for example, underpays doctors and hospitals by 42 percent.

Thankfully, Romney isn't going to be in the courtroom in Atlanta on Wednesday. He's also been absent from the proceedings in Cincinnati, where a similar anti-Obamacare lawsuit is working its way through the Sixth U.S. Circuit Court of Appeals. But it would be nice if he were making the helpful arguments about mandates rather than the hurtful ones.

The political and legal challenges will collide inside the halls of the Supreme Court. Even some of the conservative justices will be reluctant to overturn a high-profile act of Congress based on the constitutionality of a provision that has arguably been within the bipartisan mainstream. Romney's position highlights the long list of Republicans, including some of his primary opponents, who have gone on record in support of a federal individual mandate before.

In fact, people who have supported some form of a federal mandate either advised or influenced Romney on the Massachusetts health care law. That includes scholars who have been employed by conservative think tanks likely to file anti-mandate amicus briefs. All will be Exhibit A when Team Obama seeks to prove that Congress's power to compel people to buy health insurance is a settled matter.

That's why it is important for the matter to remain manifestly unsettled. If Romney is the Republican nominee, Obamacare opponents will have little choice but to vote for him. Unlike Obama, he will support its repeal and nominate judges more likely to be sympathetic to its reversal. But Romney's history, in the context of a GOP that has mostly been AWOL on free-market health care reform, would make both fights considerably harder.

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About the Author

W. James Antle III, author of the new book Devouring Freedom: Can Big Government Ever Be Stopped?, is editor of the Daily Caller News Foundation and a senior editor of The American Spectator. You can follow him on Twitter @jimantle.