10/03/2011 05:01 pm ET Updated Dec 03, 2011

The Simple Answer to the "Individual Mandate" Question

Now that the Obama administration has decided to appeal directly to the Supreme Court, the question is front-and-center.

There are hundreds of blogs questioning how a person who is not consuming health care services at the time could be said to be "in commerce."

I distill here the simple explanation.

Those who brought the lawsuit against the Affordable Healthcare Act (AHCA) have made the following admissions in court filings:

  1. Congress has the power to regulate interstate commerce.
  2. Health care is interstate commerce.
  3. Congress has the power to compel a person to purchase insurance at the time he is using health care services.
  4. Those who use hospitals, ambulances and other health care services who are not insured raise prices for everyone else because of cost-shifting: the suppliers charge more to insurance companies so they can recover costs from those who do not pay.

The above four statements are not controversial, and not argued by the opponents of the AHCA.

They do argue that the health care insurance market is separate from the health care delivery market, and thus Congress does not have the power to compel a person to purchase health care insurance when he is not using health care services.

But, that argument falls flat on its face. The existence of a large uninsured pool causes the hospitals, to take one example, to assume a certain percentage of unpaid expenses, and thus raise their prices for the rest of us. Everyone acknowledges it. See #4 above.

The only way it could not is if the hospitals could reach back and increase your bill at the end of the year if they find, e.g., that 20 percent of their bills are uncollected.

Thus, whether one is using health care services or not, the existence of a large uninsured pool of potential patients impacts what all parties agree is interstate commerce.

For a non-results based, non-ideological Supreme Court, the power of Congress to impose the individual mandate would not be a difficult decision.

[Anyone is interested in a more detailed analysis should see "The Individual Mandate and the Constitution: Purely a Matter of Timing"].

[For those who do not like the AHCA, for whatever reason(s), not liking something and declaring it unconstitutional, are two very different propositions].