Everyone Enters the Health Care Market

Next week, the Supreme Court will begin deliberation as to whether or not citizens of the United States can be required to purchase health insurance. If constitutional, health care will no longer be voluntary but a duty of citizenship.

With the “minimum essential coverage requirement” of the Affordable Care Act, Congress has applied a mandate by which most nonelderly Americans must acquire health insurance.  Several lower courts have rendered decisions on the constitutionality of this provision, hearing claims that Congress has over-reached its power by mandating individuals purchase health insurance.  The Department of Justice cites several Supreme Court decisions that give precedence to congressional regulation of individual conduct, including taxation and regulation of interstate commerce, the latter of which is the focus of this article.

The authors assert that before constitutionality can be determined it must be determined whether or not the decision to purchase health insurance materially affects commerce across state lines.  The Supreme Court has recognized that Congress can lawfully regulate those individual activities that substantially affect interstate commerce to avoid aggregated effects or to address national problems.  In one case, the Court ruled that a farmer forgoing the market was still subject to government regulation.

Congressional findings support that the intent of the provision was to address the mismatch between health care financing and health care consumption. This mismatch results from the decline of employer-based plans, a dysfunctional individual market, and lack of public insurance coverage for the poor. Without an individual mandate, some individuals will forgo insurance and attempt to “self-insure.” Uninsured individuals tend to have poorer health and still consume health services, which then shifts the economic burden onto persons who actually have health insurance.

Research demonstrates that uninsured individuals do not forgo participation in the health care system, thus creating enormous spillover effects. The Institute of Medicine (IOM) found that communities with high rates of uninsurance have fewer hospital beds, fewer specialty and trauma services, and lower financial margins. Meanwhile, rates of uninsurance among nonelderly adults have increased in the past decade by 25 percent.

The Medical Expenditure Panel Survey  approximated that 1.1 million (25 percent) pregnant women were uninsured at some or during all parts of pregnancy.  However, the nation’s vital statistics indicated that an overwhelming majority (99.7 percent) of pregnant women will deliver their babies within the health care system. MEPS data also reveal that impoverished women represent 60 percent of pregnant, uninsured women.

The Americans’ Changing Lives Study found that by age 50, a majority of Americans require medical care.  MEPS data revealed that in a 10-year span among nonelderly adults, virtually the entire population receive medical care.

As it relates to the interstate nature of health care, a Census Bureau survey showed that 6.5 million nonelderly individuals relocated to another state. Data indicated that those who cross state lines are one-third more likely to be uninsured and create uncompensated care problems for states.

The Courts of Appeals have varied in their rulings on the mandate.  The Sixth Circuit upheld constitutionality, deeming that the individual mandate addresses economic implications because, regardless of coverage, everyone eventually participates in the health care market.  The Eleventh Circuit rejected constitutionality, stating that the mandate is overly-inclusive; it argued that the premise of future health care consumption at some point is inconsistent with the Commerce Clause, which deals with already existing activity.

Commentary 

The Affordable Care Act has, from its inception, come under scrutiny with regards to its constitutionality.  Specifically as it relates to the “minimum essential coverage requirement” (the individual mandate), the question of whether Congress has over-reached its power by regulating individual conduct has reached the height of political and legal debate as the Supreme Court of the United States prepares to deliberate and render a decision in coming days.

Compelling evidence has demonstrated that the use of health care services is virtually inevitable for all individuals.  The Eleventh Circuit, which rejected the individual mandate, has not considered one major statistic – that almost all Americans actually enter the health care system at birth.   So, the notion that there are individuals who are excluded from the health care marketplace is invalid.  Consumption of services is not always planned; it is frequently urgent or emergent. The uninsured individual is often financially ill-prepared, thus, shifting the economic burden onto the insured.  Without a mandate, individuals will forgo health insurance, but they will not forgo participation in the health care system. The individual mandate will increase the number of individuals who can share the economic burden of paying for our nation’s health care bill.

Almost all Americans engage in the health care market from birth; those that do not will undoubtedly do so at some point in their life.  Intellectually, it is clear that one person’s decision to buy (or not buy) health insurance affects every other American. Whether the mandate is constitutional in the United States rests in the minds of the Supreme Court agreeing to this logic.

Rosenbaum, S. et al. Examining the Evidentiary Basis of Congress’s Commerce Clause Power To Address Individuals’ Health Insurance Status. Bloomberg BNA Health Care Policy Report; Feb 6, 2012.

 by
Renée Volny, DO, MBA