Distributism and Health Care Reform I

Economics, Politics — Posted by David W. Cooney on September 1, 2010 3:51 AM

Election season is once again upon us here in the USA. Republicans are hoping for sweeping wins across the country due to the dissatisfaction people have with the failure of the efforts to stimulate the economy, combined with the fact that it is clear that those in the government seem intent on spending us into oblivion, combined with the fact that the current ruling Party completely railroaded the new “health care” laws through the legislature – breaking every campaign promise they made about openness in the process. While public opposition increased, Pelosi assured us that we would welcome the Patient Protection and Affordable Care Act with open arms once we knew what is in it (even though, for some reason, she said it had to be passed before we could know what’s in it).

After its passage, several large companies reported – as the SEC requires – how badly the law would impact their ability to provide insurance coverage for their employees. Initially, congressional leaders threatened to make these companies explain these claims, but then they realized they would be much better off to try and let the issue quietly go away. Claims that the law would make companies consider dropping insurance coverage were dismissed by the administration and many in the media. Insurance companies were immediately bombarded with calls asking for the free health care promised by the administration, only to explain that the benefits have not yet begun. No, at present, we are just paying the taxes that will supposedly build up the initial fund to cover it when it starts. So much for it being free, but then this deception has worked before, and it will undoubtedly work again. People, eager to get something for nothing, fail to examine the details. After all, “the rich” would be taxed to cover the costs. Some doctors, already all too familiar with dealing with the government’s Medicare coverage, are considering retiring rather than face Obamacare.

Another thing that happened immediately after the bill was passed was that several states challenged the legality of the bill because it requires everyone to purchase health insurance. This requirement has been defended, both as a tax and not a tax, by the administration and has been compared to the requirements to have auto insurance. However there is an important difference between the two. Driving is considered to be a privilege and requires the obtaining of a state issued license. Because the state can define requirements such as age and knowledge to obtain the privilege of driving, it has the right to impose other requirements like insurance as well. (Note, I am not stating my own opinion here. This represents the reasoning used by the states in imposing the requirement.) However, health care is a right; a position emphatically stressed by the proponents of Obamacare. This difference represents the real danger of this legislation.

If this legislation is allowed to stand, there will be no aspect of our lives the government cannot regulate. The government says that, whenever you access health care services, you are engaging in interstate commerce. Additionally, your decision not to have insurance impacts medical costs, so the government has the authority to fine you if you don’t have insurance. This gives the government the authority to impose whatever laws it wants in the process of “regulating” interstate commerce. This applies even if your participation in actual interstate commerce is secondary, tertiary, or beyond. So, even though your transaction with the hospital or doctor’s office is taking place completely locally, the fact that the extended costs may extend beyond the state line means you are engaging in interstate commerce. The fact that the hospital or doctor may purchase some medical supplies across state lines means that you’re now engaging in interstate commerce. Note the subtle difference here. It isn’t just the initial and actual interstate purchase that is interstate commerce, but any subsequent purchase – even if it does not cross state lines – is, by inheritance, interstate commerce. If you purchase something built locally, but one single part was purchased by the builder in another state, the government not only has the power to regulate the interstate purchase made by the builder, but also your completely local purchase from the builder. If a local farmer, wanting to avoid recessive genes in his chicken flock, purchases chickens from out of state, the eggs you buy from that local farmer could be considered an act of interstate commerce! What’s more, your not having insurance can be considered interstate commerce because, if you impact the medical system – say, for emergency treatment – that cost can supposedly reverberate beyond the state line. Therefore, choosing not to buy eggs from an out-of-state farm has an economic impact that crosses state lines and puts your decision not to participate in a particular economic activity under the jurisdiction of the Interstate Commerce Clause!

If that is the case, what can’t the federal government regulate? I live on a private road. Delivery trucks can use that road to deliver goods from other states. According to the logic being employed by the current adminstration, this means the federal government has the right to regulate our private road and fine us because we don’t have sidewalks.

In the next section, I will discuss the conservative and libertarian opposition to Obamacare. After that, I will present options that I believe would be compatible with Distributism.

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Tags: Distributism, Health Care, Health Care Reform, Health Insurance, Obamacare