Healthcare Mandate Question: Should the U.S. Government Require Everyone To Buy Health Insurance?

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In a year of sweeping overhauls in healthcare, financial reform and tax policies, critics of U.S. President Barack Obama's proposals have called them ineffective, shortsighted and misinformed.

This week, in a case that will likely go all the way to the Supreme Court, a federal District Court judge in Virginia added the term "unconstitutional" to that pointed list.

The provision in question is part of the Patient Protection and Affordable Care Act of 2010, the U.S. healthcare reform initiative signed into law in March. It requires all Americans, unless exempted for religious or other reasons, to carry health insurance - or to pay a penalty for failing to do so. 

So far, opponents have filed two-dozen lawsuits challenging the health insurance mandate's constitutionality.

One of those cases - filed by Virginia Attorney General Kenneth T. Cuccinelli II - was decided this week. Plaintiffs argued that making people get health insurance coverage simply because they exist falls outside the limits of congressional power granted by the Commerce Clause, which defines how Congress can regulate commercial activity. 
Federal Judge Henry E. Hudson of the U.S. District Court for the Eastern District of Virginia agreed with the plaintiffs. In a 42-page opinion released Monday, Judge Hudson said the requirement went "beyond the historical reach" of Supreme Court cases that define Congress' role in interstate economic markets, and "would invite unbridled exercise of federal police powers." 

Judge Hudson, the third District Court judge to render a decision on the healthcare law, was the first to rule in the plaintiffs' favor. He said the law went beyond effective healthcare regulation and best business practices, and touched upon citizens' rights.

"At its core, this dispute is not simply about regulating the business of insurance - or crafting a scheme of universal health insurance coverage - it's about an individual's right to choose to participate," wrote Judge Hudson.

Or, as Judge Hudson said more informally at an October hearing, it's like giving Congress the ability to force Americans "to buy an automobile, to join a gym, [or] to eat asparagus."

For the defense, U.S. Justice Department lawyers argued that individuals who opt out of coverage are instead making a promise to pay for medical costs later, out of their own pocket. That promise makes them part of "commerce."

And since those without insurance can't guarantee they won't need medical care while uninsured, any unpaid healthcare costs they incur would be dumped on governments, medical facilities and insured Americans.

These two realities can't help but impact the healthcare industry - meaning the coverage decision should be regulated, the Justice Department lawyers said.

Advocates of the healthcare law also argue that changing the mandatory insurance requirement is playing with fire.  They fear if courts do not uphold the mandate, insurance companies will retain too much power - a problem that warranted a healthcare overhaul to begin with.

"We think [this decision] is wrong on the merits and bad for people's health," said Ethan Rome, executive director of Health Care for America NOW. "If his decision is upheld, it would give the green light for insurance companies to deny people care based on pre-existing conditions. Putting insurance companies back in charge of our healthcare is the wrong way to go."

This brings us to next week's Money Morning "Question of the Week:" Should the U.S. government require everyone to buy health insurance? Is it constitutional, or does it extend Congress' authority too far over Americans' decision-making? Would it truly help "fix" the U.S. healthcare system, or is it an abuse of government power? 

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