Appellate Court Declares Mandate Unconstitutional

The 11th circuit has ruled that the individual health insurance mandate is unconstitutional, but that the rest of the law can stand.  I'm not going to comment on the legality of this, because I am not a lawyer.  (As a matter of principal, I think that our constitution should not permit laws requiring people to buy services from private parties.  But the fact that I think something should be proscribed by the constitution, does not mean that it in fact has been.  The practice of using the word "unconstiutional" as a synonym for "things I do not like" is scurrilous, and should be abandoned.)


Instead, I'll comment on the policy aspect: what does it mean if the Supreme Court follows the appellate court's lead, and strikes down just the mandate?

Presumably, the insurance market across the United States ends up looking a lot like New York's market, where during the debate over health care reform it was reported that the cost of the average family policy in the individual market was over $4,000 a month.  That's because New York has the other features of ObamaCare--community rating and guaranteed issue--without the mandate.  The result was that all the healthy people dropped out of the pool, leaving a few very sick people to buy insurance.

There's a slight difference though: the government is going to subsidize individuals in the private market.  If the subsidies keep pace with the cost, Obamacare's nominal deficit reduction is going to turn into a gaping hole in the federal budget.

Under those conditions, the real question is political: will anyone have the guts to repeal community rating and guaranteed issue?  Or the subsidies?  And if not, how do we absorb the financial blow?



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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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