Friday, May 20, 2011

On Health Care, Romney's Critics Also Have Some Explaining to Do

Neil Siegel

If Mitt Romney has some explaining to do to fellow conservatives for supporting health care reform in Massachusetts, some of his fellow conservatives have some explaining to do to the federal courts.

In an effort to address a potentially serious impediment to his receiving the Republican nomination for president, Mr. Romney recently called health care reform in Massachusetts “a state solution to a state problem.” But he is having a very difficult time persuading members of his own party—including those who are bringing or supporting federalism challenges to the Affordable Care Act—that federalism distinguishes the individual mandate in the Massachusetts plan from the individual mandate in the ACA.

The reason why Mr. Romney is making little political headway with his invocation of states’ rights is obvious enough. As I observed in a letter to the editor in today’s New York Times, the core conservative objection to the individual mandate is not that it is offensive to constitutional federalism, but that it is offensive to individual liberty.

For example, the New York Times recently reported here that Mr. Romney’s “embrace of the mandate—a policy some Republicans once had favored but nearly all now reject as unwarranted incursion by the government into personal decisions and private markets—seemed to trump his larger states’ rights argument for some conservatives.” James Capretta, an associate director of health care policy at the Office of Management and Budget during President George W. Bush’s first term, was quoted in the Times article as saying that Mr. Romney “was for [the mandate] when he was governor and now it’s clearly something that the broad coalition of conservatives feels is not a good idea at the national level or at the state level.”

But if Mr. Romney fails to engage the principal source of conservative opposition to the federal mandate, he perfectly captures the basic rationale of the lawsuits challenging the ACA.

As I argue in a new paper, this rationale is unpersuasive; the individual mandate in the ACA is within the scope of the commere power. Individuals who have the financial means to obtain health insurance coverage but decline free ride on the benevolence of others. Moreover, the scope of this collective action problem disrespects state borders in light of the interstate mobility or presence of individuals and insurances companies. Free riders may be “inactive” in insurance markets for the time being, but their inactivity is a problem, not a reason why Congress is powerless to offer a solution. Congress can offer a solution using its commerce power when the states are “separately incompetent” (as the Framers put it) to address the problem effectively on their own because of spillover effects.

In short, the distinction between inactivity and activity has nothing to do with the limits of the commerce power. The distinction between individual and collective action by states has much to do with the limits of the commerce power.

Mr. Romney's present lonely position is borne of political necessity and misunderstands what qualifies as “a state problem.” But it at least has the virtue of being consistent with the grounds on offer from those who are asking the federal courts to invalidate the individual mandate in the ACA.

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