HEALTHCARE IN AMERICA (4)

The nine justices of the Supreme Court are this week hearing arguments in a case, which is without doubt the most important to be decided for a generation. At stake is the healthcare reform passed two years ago, which represents the biggest domestic achievement of Barack Obama's presidency. If it survives judicial scrutiny, then he will go into November's election in a strong position; conversely, if it does not, then he might well lose.

There are four legal questions to be decided, but by far the most important one is the constitutionality or not of the so-called "mandate". Under the reform, everybody in America will soon have to take out healthcare insurance, or pay a fine; those too poor to be able to afford it will be subsidised. This will do nothing to remedy America's colossally expensive healthcare system (indeed, it may even make things worse in the short term), but will address one of the biggest problems associated with that system, namely that millions of people currently have no healthcare insurance. According to the reform's supporters, the mandate merely extends existing arrangements to those who didn't have them beforehand; according to its opponents, forcing citizens to buy something they perhaps don't want is an unwarranted intrusion into personal freedom and so unconstitutional.

Since the U.S. constitution does not actually mention healthcare insurance, the arguments concern proxies. Much of the federal Government's expansion into social matters has been based on its constitutional power to regulate interstate commerce. Healthcare insurance is undoubtedly an interstate commerce matter; furthermore, the uninsured are already heavily involved in it, since although they can't pay, hospitals often treat them anyway. This in turn creates a "free rider" problem, since insurance premiums rise for everybody else in order to cover this extra unfunded cost. In economic terms, therefore, the mandate internalises an unfortunate externality (an action which is generally considered to be a good thing).

The antis look at the same set of facts, but interpret them differently. For them, it is right and proper for the Government to regulate interstate commerce. However, the uninsured are - by definition - not engaged in the healthcare insurance business, so there is nothing to regulate. What the Government is proposing will force people into commercial activity, an activity which it then regulates. Such coercion is not allowed by the constitution and has no legal precedent.

Judges faced with a tricky legal problem with massive political consequences often try to find a compromise. However, in this particular case, it is hard to see one. What is more important, the freedom of the individual, even if it means the freedom to choose not to purchase health insurance; or the right of the Government, acting on behalf of its citizens, to regulate a public service that every one of those citizens will need, even if only at the end of one's life? We'll discover the answer to that question in June, when the Supreme Court delivers its judgment.

Walter Blotscher