Health Care After the Court

National Review Online | Published on June 27, 2012

By Yuval Levin

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We don’t know what decision the Supreme Court will announce tomorrow, and the peculiar overconfidence on both the left and the right that the justices will strike down some portion of Obamacare seems to me not well founded. They might, or they might not, and the case for either outcome is about as strong as ever. This week’s Arizona decision (and of course countless other cases over decades) should teach us that there is no necessary relationship between Justice Kennedy’s attitude in oral argument and his ultimate view, and the same surely holds for other justices in many cases. It certainly seems to me that if there is any limit at all on the Congress’s power under the Commerce Clause then the individual mandate as articulated in Obamacare lies beyond that limit, but then I have never been able to find a right to kill unborn children in the Constitution, so clearly I’m not a very careful reader. We’ll just have to see what the justices find.

However the court rules, though, the decision will be followed by a rekindling of the health-care debate. If the justices uphold the law, then of course the case against its many grave failings and its fundamentally misguided approach to health economics will need to be sustained so that a president and Congress intent on repealing and replacing it might be elected in November. But even if the Court overturns some or all of Obamacare, essentially the same case will need to be made in the buildup to the election. A decision finding the individual mandate to be beyond the pale would be a major turning point in American constitutional law—perhaps the most important move in decades to recover some of the meaning of the Commerce Clause and so to reinforce the capacity of our constitutional order to shape the bounds of state authority and therefore of our public life. But it would be a less significant turning point in the long-running dispute over American health economics.

The Court has not been asked (nor could or should it have been) to somehow take up the premises that informed the design of Obamacare—that economic efficiency (and therefore higher quality at lower cost) can be best achieved by centralized command and control and that the inefficiencies of our health-care system should therefore be addressed by making the federal government even more of a buyer, provider, regulator, and price controller in American health care and making the system even less responsive to consumer pressures and price signals. It has not been asked to reflect on the premises that inform the views and proposals of opponents of Obamacare—that economic efficiency (and therefore higher quality at lower cost) can be best achieved by intense and decentralized competition for consumer dollars among providers who are free to innovate and that the inefficiencies of our health-care system should therefore be addressed by using the government’s leverage and public resources to give consumers numerous options and the means to choose among them.

As a matter of policy substance, the individual mandate is peripheral, not central, to the Left’s approach to health-care reform. It is necessary to the system envisioned by Obamacare precisely because that larger system is at odds with basic economics. Left to itself, the system would quickly self-destruct, since it would create strong incentives for people to remain uninsured until they were sick. That should serve as a warning sign to its champions, but instead it served to invite the creation of a new legal requirement for living in America, enforced with a modest penalty. If they are denied recourse to that particular penalty, it would not be hard for people committed to a command-and-control approach to health-care financing to find another way. They could, for instance, create a new health-care tax (set at the same level as Obamacare’s mandate) and exempt from it anyone who has government-approved health insurance. This would have roughly the same effect, imposing a penalty on anyone not covered in an approved way, but would not raise the same constitutional questions.

Of course, the politics of such a tax, and indeed the politics of trying to reconstitute Obamacare if the Court strikes down some or all of it, would be very difficult for the Left. And that’s just the point. Whatever the Court announces tomorrow, it is the political fight over how to fix our health-care system that must be fought and won. That fight is really about the two visions of health care—and the two visions of economics, freedom, and American life—espoused in general terms by the Left and the Right. The Obamacare fiasco has severely damaged the Left’s ability to make its case: Liberals have had their chance to push through their version of health-care reform and they produced an incoherent and unpopular monstrosity. This gives conservatives a real opportunity, but seizing that opportunity will require more than just hoping that Obamacare is undone by the Court, and more even than repealing that odious law in the Congress. It will require a forthright case about what is wrong with our health-care system (and how a series of grossly misguided federal policies have been at the heart of the problem) and how it can be fixed through a series of discrete, targeted reforms aimed at actually addressing the problem rather than desperately struggling to vindicate the shallow vision of solidarity underlying a dying social-democratic dream.

The conservative alternative is not a secret. At its core, it involves turning today’s health-care entitlements (including the tax preference for employer-based coverage) into a system of premium-support subsidies to be used in a regulated but highly competitive private insurance market in which insurers and health-care providers have broad latitude to experiment with different avenues to efficiency and quality. Its key components, in various forms, have been laid out in recent years by the last Republican president, the last Republican presidential candidate, the leading policy thinkers among Congressional Republicans, assorted conservative health-care wonks, and the prospective Republican nominee. There is no excuse for pretending it doesn’t exist, as much of the Left has sought to do. But there is also no excuse for imagining that such an alternative is not necessary, or need not be argued for, as some Republican leaders and evidently some in the Romney campaign now seem inclined to think.

The Court’s decision tomorrow will surely clarify the parameters of the coming debate. If the Court upholds the mandate, the focus will shift from Constitutional questions back to the sheer unpopularity of many of Obamacare’s provisions (including the mandate), and the argument will find itself roughly where it was a year ago. If the Court overturns some part of Obamacare, then the case for health-care solutions that both address the problem and respect the integrity and character of our constitutional system will surely be strengthened. But either way, the basic argument about what is wrong with America’s health-care financing system and what a better system would look like will go on. It will be, as it always has been, a debate that conservatives must win the old-f
ashioned way: in the political arena, by persuasion and proof.

Yuval Levin is Hertog fellow at the Ethics and Public Policy Center and editor of National Affairs.