The Limiting Principle
March 30, 2012 Leave a comment
Conservative Justices this week kept insisting that unless there was a “Limiting principle” by which we could distinguish how the government could force you to buy health insurance, but no force you to broccoli, than clearly the individual mandate is unconstitutional. Jon Chait has a really nice piece summarizing many people on the nuttiness of this. You should read it. What I’m going to post here, though, is legal scholar par excellence Jack Balkin’s first of three options on the matter:
Hey kids? Are you down in the dumps after Tuesday’s oral argument? Do you want a limiting principle that justifies the individual mandate but doesn’t give Congress unlimited power under the Commerce Clause? Fine. Here are three of them. Pick your favorite.
1. The Moral Hazard/Adverse Selection Principle. Congress can regulate activities that substantially affect commerce. Under the necesary and proper clause, Congress can require people to engage in commerce when necessary to prevent problems of moral hazard or adverse selection created by its regulation of commerce. But if there is no problem of moral hazard or adverse selection, Congress cannot compel commerce. Courts can choose different standards of review to decide how much they want to defer to Congress’s conclusion. Even under the strictest standard of review the individual mandate passes muster.
Explanation: The guaranteed issue and community rating rules prevent insurers from discriminating against uninsured people because of preexisting conditions. These rules create a moral hazard: people will wait until they get sick to buy insurance. (this might be better described as an adverse selection problem) Congress can require them to buy insurance early to prevent gaming the system. (Actually, it exacerbates an already existing problem in all health insurance, because insureds know more about their health condition than insurers).
Why not broccoli? There is no moral hazard or adverse selection problem created when people refuse to buy broccoli. It’s true that buying and eating broccoli might make you healthier, but people don’t wait until they are sick to buy broccoli. That’s because broccoli is not going to do them much good at that point. In this sense, broccoli doesn’t work like health insurance.
Why not cars? Under this principle, Congress can’t make everyone buy a car in order to help the auto industry. There is no moral hazard or adverse selection problem that Congress is responding to that is caused by people strategically waiting to buy cars. Note, by the way, that if fewer people buy cars, the price of cars might go down, not up, as Justice Scalia thought.
The others two are entirely sensible and logical as well. If the conservative justices want a limiting principle, it is really not hard. Being forced to buy health insurance is dramatically different in so many ways from being forced to buy broccoli. Seems to me, that Kennedy aside (that’s unclear) they very much don’t want a limiting principle so they can simply get rid of a law that they don’t like. That’s most certainly not what the Court is there for.