Conservatives go to Court to Stop Free-Market Healthcare

The conservative case against the healthcare law's individual mandate argues that the federal government cannot compel citizens to purchase insurance. If they are successful, a consequence of that ruling might be that it will become very hard for America to implement healthcare reform that is aligned with free-market principles.

In a blog post for The Atlantic, Avik Roy sings the praises of the healthcare systems of Singapore and Switzerland. Both are countries where consumers are empowered to pay for their healthcare and there is minimal government spending:

I've described Switzerland as having the world's best health-care system. In Switzerland, there are no government-run insurance plans, no "public options." Instead, the Swiss get subsidies, much like "premium support" proposals for Medicare reform or the PPACA exchanges, from which Swiss citizens buy health care from private insurers. The subsidies are scaled up or down based on income: poorer people get large subsidies; middle-income earners get small subsidies; upper-income earners get nothing.…The premium support system allows the Swiss to shop for their own insurance plans, which gives them the opportunity to shop for value--something that almost no Americans do. As a result, about half of the Swiss have consumer-driven health plans, combining high-deductible insurance with health savings accounts for routine expenditures....In a manner somewhat like our Social Security system, Singapore takes mandatory deductions from workers' paychecks--around 20 percent of wages--and deposits them into health savings accounts called Medisave. Medisave accounts are used mostly for inpatient expenses, but also some outpatient ones. Singaporeans are expected to pay most of their outpatient expenses with non-Medisave cash.

So why isn't the Heritage Foundation arguing for America to embrace Singaporean or Swiss style Healthcare? Because both models break current conservatives taboos. Switzerland has an individual mandate and Singapore uses mandatory health savings accounts. It seems that any healthcare system that uses market forces needs at least some level of government coercion or mandates to work.

Roy notes that there are compromises that might allow the healthcare law's insurance exchanges to work without a mandate by offering citizens an opt-out. (He is not alone in suggesting this, even former Bill Clinton adviser Paul Starr has thoughts about how this can be done.)

Putting aside the economics of whether an opt-out would work, it would be stunning if mandating everyone to purchase insurance was unconstitutional, but mandating it while providing an opt-out was constitutional. (Would Social Security need an opt-out system for it to still be constitutional?)

More importantly, arguing that the constitution only allows for a convoluted method of protecting private insurance is likely to only push liberals in the direction of healthcare reform with a stronger government presence. Why protect private insurance when it is easier to just declare that everyone is covered by Medicare?