ObamaCare Vs The Constitution (2)

From the very beginning, the ObamaCare arguments before the Supreme Court were a lesson in the folly of ignoring the wisdom of our Constitution, a charter for a government with just a few, limited, enumerated powers.  Solicitor General Verrilli, whose unenviable assignment was to defend ObamaCare opened things up:

“The Affordable Care Act addresses a fundamental and enduring problem in our health care system and our economy. For most Americans, for more than 80 percent of Americans, the insurance system does provide effective access. But for more than 40 million Americans who do not have access to health insurance either through their employer or through government programs such as Medicare or Medicaid, the system does not work.”

Mr Verilli’s “insurance system” is mostly health plans provided by employers.  So how did these plans plus government become “our health care system?”  It’s not as if several competing ways to finance medical services have been offered.  It’s not as if a majority of customers chose employer-provided insurance plans over any alternative.  In fact, employer health plans came about almost by accident.

Employers began providing health plans during World War II as a work-around because  war-time regulations banned salary increases.  From the beginning, tax law permitted employers to treat the cost as a business expense, like wages.  But, unlike cash wages and other forms of non-cash compensation, tax law also allowed the employee to receive the health plan tax free.  To this day there is no payroll tax or income tax on the dollar value of health insurance, as long as it is provided by one’s employer.

Through the years federal and state governments imposed upon the health care market additional incentives to enshrine employer-provided plans as the politically preferred arrangement and to penalize other ideas by making them more expensive.  Today, most Americans are too young to remember a time when government didn’t heavily regulate and influence health care finance.

Mr Verrilli continued:

Those individuals [who do not receive employer-provided insurance] must resort to the individual market, and that market does not provide affordable health insurance. It does not do so because it — because the multi-billion dollar subsidies that are available for the employer market are not available in the individual market.

By “subsidies” he means the tax free treatment of employer-provided health plans.  People who purchase their own plans must pay with after tax income.

So why aren’t individuals who don’t receive insurance from an employer entitled to the same tax treatment as those who do?  It’s not as if there were some holy principle that can’t be breached.  Congress changes the tax code almost every year and could immediately empower individuals by deleting the tax punishment they suffer for the offense of buying health insurance.  Instead Congress enacted 2,700 pages of impenetrable legalese that will ramp up scores of new government agencies and bureaus, and compel every American to purchase a health plan that complies with new government commands.

According to a CBO analysis part of the new revenue ObamaCare will raise will be in the form of higher income tax payments from people whose employers elect to terminate health insurance benefits as a result of the high cost compelled by ObamaCare.  The CBO assumed those employers would increase the cash wages of those employees by an amount equal to the cost of the terminated health plans.  Thus, ObamaCare punishes even more people for the sin of buying insurance individually instead of through their employers.

While supporters don’t openly acknowledge it, ObamaCare’s underlying assumption is that the status quo, mostly employer-provided health plans, is the last, best idea best idea there will ever be.  Indeed, the effect of ObamaCare is to permanently entrench the most expensive type of health plan, mostly employer provided as the only means of financing outside of Medicaid, which is already on life support.

ObamaCare effectively blocks all future health care financing ideas or innovations by making them illegal.

If the government had obeyed the Constitution in the first place there would be no tax punishment imposed on those who purchase their own insurance.  If the government obeyed the Constitution the challenges of health care finance would be met by competing ideas offered to voluntary customers by private sector entities.  Each incremental step in expanding government’s role in controlling how medical services are delivered and financed has been sold as a problem solver.  But each has brought with it a new set of problems to be solved by yet more government intervention.  The process won’t end until every hospital belongs to the federal government and every health care professional is a government employee.  And when that finally happens the problems will be more intractable than ever.

4 Comments so far

  1. SenateStaff on March 31st, 2012

    This blog is becoming a caricature of Tea Party wingnut websites. The Constitution grants broad powers to Congress to regulate. Our society is a thousand times more complex than it was in 1776, with health care technologies and costs the framers couldn’t have imagined.

    What is the teaparty alternative, anyway? Just let Big Insurance run roughshod over all of us, capriciously dispensing lifesaving healthcare to some and not to others?

  2. AzTex on March 31st, 2012

    The individual responsibility feature of Health care reform was a Conservative Repubican idea – until Obama adopted it in the spirit of compromise. Since then the Repubicans have demonized Obama for including it, and now it looks like the Partisianship on the Supreme court will kill it. The GOP Justices would have supported it in a second if it came from a Republican President.

  3. […] ObamaCare Vs The Constitution (2) […]

  4. Drew on April 2nd, 2012

    You blew it, SenateStaff. Thats exactly why ObamaCare should be shot down. The health care industry is too complicated and too fast moving. It will quickly become dominated by special interests and have intransigent regulators. Regulating plodding monopolies like utilities is one thing. Health care is another. But Ive never known your comments to show any insight.