Healthcare Act – Unintended Consequences

So far I’ve largely stayed away from commenting on the lawsuits and Republican/Tea Party attempts to repeal the Affordable Care Act of 2010 that everyone refers to as Obamacare (odd choice of name since it doesn’t set up any government-operated healthcare facilities – it’s mostly about insurance, not care delivery). It seems that there are three sources of opposition to the healthcare reform act. There are those who are opposed to the “mandate”, the requirement that individuals buy healthcare insurance or suffer financial penalties for failing to do so. This is basis it appears of the opposition that has become several lawsuits trying to stop the act. Then second, there are those, primarily many Congressional and Senate Republicans who are simply opposed because Obama proposed it, despite the fact that the program as passed is essentially the same thing that Republican Mitt Romney created in Massachusetts. Finally there are those who opposed to any attempts to find affordable ways in which less privileged Americans can obtain healthcare – they prefer an everyman-for-himself world.  Best as I can tell, these are the folks calling it “socialism” despite the fact the program is best thing to ever happen to privately-owned insurance companies.

This post is relevant to the first opposers, the ones who claim to want affordable insurance to be available for all but oppose the “mandate” on some sort of liberty and constitutional grounds. Now a caveat first.  I am no great fan of the bill as passed. It is far, far from what I would have preferred.  My preference would have been for Medicare eligibility for all,not just seniors – a single payor system with private delivery of care. But, I think those who oppose the mandate, may find, should they win their lawsuits, that they run into that bane of economic policy proposals in the real world: unintended consequences. It seems to me there’s two likely types of unintended consequences that these people will find unpleasant.  First is that should the mandate fail, then the only way to achieve affordable health insurance for even just a majority of Americans is to go to a public-option or single-payor system. The reason is because the healthcare insurance market does not and cannot work successfully without the broad-based coverage that only a mandate, public option, or single-payor can provide. Healthcare insurance, with private insurance companies leading the way, is prone to serious adverse selection problems. Insurance companies only want to insure people who have no claims and only people who need healthcare want to buy coverage until the unexpected happens. It’s the dynamic that caused the nation to have this debate and why every developed nation has some sort of public-option, mandate, or single-payor. The Incidental Economist explains more here and  gives examples of the Massachusetts experience here. So if opponents succeed and get the mandate repealed, they may very well find  that healthcare affordability is more popular than they perceive and the nation may be forced to their even-less liked options: single-payor or public option.  Oops, unintended consequence.

Another possible unintended consequence has to do with a variety of other  laws that most of the mandate-opponent conservatives favor.  Constitutional law scholar Laurence Tribe observes that should the Supreme Court strike down the mandate as unconstitutional, the logic they would have to use would reverse and/or jeopardize a wide range of other federal laws that the court and conservatives have upheld. Such as the ability of the Federal government to “regulate” or prohibit the growing and use of marijuana in one’s own backyard for your own consumption. Through some tortured logic, the same Supreme Court justices that would have rule against the mandate held that growing something for your own use that your state doesn’t prohibit still constitutes “interstate commerce”.  Hmm.  So it the mandate goes, it might create a whole meaning for “medical marijuana”.