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Within weeks, after signing the nation’s first comprehensive health insurance reform, twenty states filed lawsuits challenging the constitutionality of the Bill’s most politically charged feature—an individual purchase mandate. If anything, the tax penalty is too low compared with the cost of insurance, so it may not sufficiently incentivize healthy individuals. But it remains deeply controversial because it compels individuals to purchase coverage they choose not to have, raising the question whether Congress can lawfully and ethically require individuals to contract with, and transfer money to, a private party. To be sure, the individual mandate lacks a clear American precedent. (It has worked successfully in other countries, such as Australia). Compulsory automobile insurance, for example, is a state (not a federal) requirement, operates as a condition of exercising the privilege of driving, and requires coverage for injuries to others (not to the insured).

The absence of health insurance creates harmful consequences, including lower quality of life, increased morbidity and mortality, and higher financial burdens. Many individuals cannot afford insurance, but others choose not to insure; >9 million people earning >$75,000 had no coverage in 2007. Yet, many previously healthy people suffer illness or injury, requiring treatment in emergency departments, most of which is uncompensated. “Free riders” rely on society to pick up the costs ($43 billion in 2008) through: (1) higher insurance premiums (>$1,000 annually) and higher taxes (e.g., hospital subsidies, Medicaid, and Medicare). Individuals often delay purchasing health insurance until they become ill, creating an “adverse selection” problem for insurers. At its worst, free riding and adverse selection result in a downward spiral of increased premiums and a shrinking insurance pool, making healthcare less affordable for everyone.

The pivotal constitutional concern is that government will penalize individuals for failing to buy health insurance (“doing nothing. Here, I show why failing to buy health insurance is far from “doing nothing”, and I explore the alternative federal powers under the constitution: regulating interstate commerce and taxing to raise revenue and discouraging risk behavior.

Comprehensive healthcare reform envisages a social contract, which recognizes that all of us may become ill one day and where everyone shares the cost. The mandate is not an unjustified limit on freedom, but rather is vital to a decent society. If the social contract must be accomplished the “American way” through the private system, then the simple logic of insurance has to prevail, which is to spread the risk among everyone—rich and poor, healthy and sick, young and old alike. And for that to happen, the judiciary will have to uphold the individual purchase mandate.

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Hastings Center Rep., Sept./Oct. 2010, at 8-9