Thirty-five economists have filed a friend-of-the-court brief in the Florida-led multi-sate lawsuit challenging the constitutionality of the Affordable Care Act. The Florida case alleges that the law’s minimum coverage requirement — also known as the individual mandate — represents an “unprecedented encroachment on the liberty of individuals living in the Plaintiffs’ respective states” and violates the Commerce Clause of the Constitution. “The Act is directed to a lack of or failure to engage in activity that is driven by the choices of individual Americans. Such inactivity by its nature cannot be deemed to be in commerce or to have any substantial effect on commerce, whether interstate or otherwise,” the suit contends. “As a result, the Act cannot be upheld under the Commerce Clause, Const. art. I, § 8.” In October, U.S. District Court Judge Roger Vinson dismissed three of the Plaintiff’s claims, but allowed their challenge to the law’s minimum coverage provision and a separate complaint about the law’s Medicaid expansion provision to move forward.
The group of 35 economists — which includes three Nobel Prize winners and two recipients of the John Bates Clark award for the Outstanding American economist aged 40 and under — contends that the Plaintiffs’ arguments against the minimum coverage requirement ignore the fact that health care is different from every other sector of the economy. As CAP Senior Fellow David Cutler, one of the signatories to the letter, argues in this memo, “the minimum coverage requirement is ‘necessary to achieving’ Congress’ goal of reforming the national health insurance market and making quality medical care available to millions of Americans.” The economists lay out their case in three points:
1. Once can’t leave the medical market: Because of unforeseen illness, accident, or simply the aging process, all people are at risk of needing medical care, and when they do, such care cannot be put off. Over half of the uninsured use medical care in a typical year.
2. Care must still be provided to those in need: The Emergency Medical Treatment and Labor Act, which requires hospitals to care for those in acute need, whether they can pay or not, is not present in any other market.
3. Costs of caring for uninsured shifted to the insured: Over $40 billion of medical spending annually is shifted from the uninsured to the insured in the form of ‘cost shifting.’ Billions more are paid for when the uninsured become insured and use more care for untreated conditions.
“In other words, the minimum coverage requirement is a ‘necessary and appropriate response to the unique economic features of the health care market,'” Cutler writes. “The ‘parade of horribles’ – the idea that allowing the minimum coverage requirement will open the door to every other form of regulation the government might want – that conservatives argue will result from sanctioning this action is simply incorrect.”