What Next for ObamaCare?

The ObamaCare saga continues in the courts, most recently with a 2-1 ruling by an 11th Circuit federal panel invalidating the Affordable Health Care Act's individual insurance mandate as unconstitutional. This legal battle is widely depicted as a clash between socialism and free markets, individual liberty and government coercion. But the reality is far more complicated -- and, while the legislation's conservative and libertarian opponents make many valid points, they have also advanced arguments that can backfire on their own cause.

Agreeing with the bill's critics, the 11th Circuit majority holds that for Congress to require Americans to buy a product from private companies (or pay a fine) is an unprecedented expansion of government power.

Yet there is a catch. Technically, the "product" is not medical insurance but medical care -- the issue is how to pay for it. What's more, it is a product that federal law currently requires private companies to provide, under some circumstances, free of charge to those who cannot afford it. Under the 1986 Emergency Medical Treatment and Active Labor Act (EMTALA), hospitals must provide for treatment for illnesses and injuries that pose the risk of death or severe physical impairment, regardless of ability to pay. It has been estimated that about half of all the care provided by emergency room physicians in the United States is uncompensated.

The 11th Circuit ruling states that the individual mandate is too sweeping because it is applied "without regard to whether the regulated individuals receive, or have ever received, uncompensated care -- or, indeed, seek any care at all, either now or in the future." But the peculiar nature of medical care is that no individual can predict or control whether, or when, he or she will seek it. One federal judge who have voted to uphold the mandate, the 6th Circuit's Jeffrey Sutton, noted that "few people escape the need to obtain health care at some point in their lives."

The basic principle of health insurance is that people who don't utilize medical care very much subsidize those who do; in exchange, they have the peace of mind of knowing that if they do need it, they will get it. But when the law mandates at least essential lifesaving treatment for people who have neither insurance nor the means to pay, people can opt out of paying into the system while retaining at least partial access to its benefits. Overburdened hospitals then shift the costs to other patients, resulting in higher insurance prices for everyone.

Does this smack of socialism? Certainly, at the "to each according to his needs" end. Throw in Medicaid and Medicare, and a high degree of "socialized medicine" is not the scary future but the status quo.

Yet there have been no calls, not even from the farthest right, for repealing EMTALA or curbing Medicaid. Medicare, from which most retirees today will receive benefits vastly in excess of their contributions, became a near-sacred cow for many Republicans during the health care debate, with Medicare cuts invoked as part of Obamacare's horrors.

It is telling, too, that challenges to the health reform legislation have focused almost entirely on the mandate which imposes an obligation on current and potential consumers of care, not the clauses that impose burdens on providers of health care and health insurance -- such as forbidding insurance companies to deny coverage for preexisting medical conditions. Indeed, the 11th circuit ruling has left those regulations intact, with the rather implausible reasoning that Congress's ability to enact them is not affected by nixing the individual mandate. (To be sure, there are other ways to discourage people from going uninsured; but penalties that kick in when uninsured people get sick would likely generate strong opposition, including charges of discouraging the sick from seeking help.)

Clearly, Americans today overwhelmingly agree that condemning people to death or disability because they cannot afford medical care violates common decency and humanity. That consensus is not going to change. Internet posters who scoff at the notion that people are entitled to free goodies at others' expense -- as if lifesaving surgery were equivalent to designer handbags and Hawaiian vacations -- achieve little except to play into the worst stereotypes of right-wing heartlessness.

Whichever way the courts ultimately rule on ObamaCare, we will continue to face the question of how to pay for health care while maximizing personal choice, minimizing bureaucratic interference in markets, and preserving incentives for innovation. The present legislation has many flaws on all these counts. For one, its standards for coverage reject catastrophic health insurance that would solve the problem of free-riding and cost-shifting. Instead, it mandates high-premium plans that cover routine medical services -- thus, many argue, helping drive up their costs.

All this should be part of libertarian and conservative critiques of Obama's health care reform. But critics should beware of counterproductive tactics. They should not appear to defend the one-sided socialism of freeloading, or treat as outrageous any attempt to curb wasteful and unnecessary medical services. Freedom comes with personal responsibility: isn't that the true conservative and libertarian principle?