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Judge Napolitano on Obamacare, the Courts, and Economics

November 21, 2013

Tags Big GovernmentLegal SystemTaxes and Spending

Writing today at LRC, Mises Institute Distinguished Scholar Judge Napolitano notes:

The law was found constitutional by the Supreme Court only after the chief justice — who acknowledged in his opinion in the case that Congress lacks the authority to compel people to engage in interstate commerce by forcing them to purchase a good they don’t want — changed his mind on the ultimate outcome of the challenge. In order to save the law from imminent constitutional extinction, he created a novel legal theory, and he persuaded the four progressives on the court to join him.
They ruled that the punishment for the failure to obtain the level of health care coverage that the law requires is actually a tax. Then the court ruled that because Congress can constitutionally tax any event, it can tax nonevents (like the failure to purchase health insurance), and so the entire scheme is constitutional because it is really just a tax law.
The Supreme Court, lawyers sometimes say, is infallible because it is final; it is not final because it is infallible. I am a student of the court, and I revere it. It can change the laws of the land, but it can’t change the laws of economics. And so, when Obamacare ordered all insurance carriers in the land to cease offering health care plans that provide insurance coverage below the federally mandated minimum, they naturally began to cancel those plans. And when the new health care exchanges that Obamacare established failed to find coverage for those formerly insured by the substandard plans, those who had these plans and liked them suddenly were told that on Jan. 1, 2014, when Obamacare becomes effective, they will have no health insurance. The old insurance coverage will be illegal, and there is no new coverage for them.
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One of the reasons many Americans had their policies canceled this month is the failure of those policies to conform to the new federal minimum requirements. At the heart and soul of Obamacare is the power of bureaucrats to tell everyone what coverage to have. At the core of Obamacare is the removal of individual choice from the decision to purchase health care coverage. The goal of Obamacare is high-end coverage for everyone — brought about by Soviet-style central planning, not in response to free market forces.
From the perspective of the central planners who concocted Obamacare, minimum insurance coverage is the sine qua non of the statute. They want you to pay for coverage you will not need or ever use, so that the insurance carriers will have extra cash on hand to fund coverage for those who cannot afford high-end policies. This is where the laws of economics enter. By forcing all carriers to offer only high-end policies, the statute forced the carriers to raise their rates. By raising rates, the substandard policies — with their lower rates — could no longer be offered. If the government forced everyone to buy a Mercedes, when most are perfectly happy with an Acura, soon the Acuras would disappear from the market and most of us would be walking to work.

Read the whole thing.

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