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is Bad for your Health
-- The Supreme Court has long had the role of
declaring what the law is. That's becoming a harder and harder task thanks
to the White House and Congress concocting laws so complex that no one knows
their meaning before, during or after they're passed.
In an era when people expect
transparency and abhor complexity, three days of skeptical Supreme Court
hearings on the president's health law showcased a complex law collapsing
under its own weight. Information is supposed to flow freely, but consumers
of health care operate in the dark, including without any understanding of
how the law is supposed to work. And they are not alone.
Consider how Justices
Antonin Scalia and Stephen Breyer—one Reagan appointee and one Clinton
appointee—tag-teamed to declare the law unreadable. "What happened to the
Eighth Amendment?" Justice Scalia asked during the oral argument, referring
to prohibition of cruel and unusual punishment. "You really want us to go
through these 2,700 pages? And do you really expect the court to do that? Or
do you expect us to give this function to our law clerks?"
Justice Breyer made a
similar point: "I haven't read every word of that, I promise. . . . There is
the mandate in the community, this is Titles I and II, the mandate, the
community, pre-existing condition, OK? . . . There is biosimilarity, there
is breast-feeding, there is promoting nurses and doctors to serve
underserved areas, there is the Class Act, etc. . . . So what do you propose
we do other than spend a year reading all this?"
The justices focused on the
complexity of the law to debate what happens if they find some parts
unconstitutional, such as the individual mandate that forces people to buy
insurance. Can the rest of it stay, or must it all fall, and the political
branches start on health-care reform from scratch? And how could the court
practically pick and choose, given the law's great length and complexity?
This shouldn't surprise even
supporters of the law. Before the bill was passed in 2010, then-House
Speaker Nancy Pelosi said, "We have to pass the bill so that you can find
out what's in it," and Rep. John Conyers complained, "What good is reading
the bill if it's a thousand pages and you don't have two days and two
lawyers to find out what it means?"
Having his legislation
treated as farce may help explain President Obama's attack on the courts at
a news conference last week. He claimed it would be an "unprecedented,
extraordinary step" for the Supreme Court to declare a law unconstitutional.
This was such a bizarre
statement that a federal appeals court, in a separate challenge to ObamaCare,
ordered the Justice Department to submit a letter ("at least three pages
single spaced, no less") on whether the Obama administration really thinks
it's unprecedented for courts to overturn legislation. Attorney General Eric
Holder wrote to assure that the administration was not challenging the 1803
decision in Marbury v. Madison. That was the case in which the
justices said "it is emphatically the province and duty of the judicial
department to say what the law is," thus establishing judicial review under
which hundreds of laws have been invalidated, often for overreaching by the
political branches of government.
Perhaps ObamaCare will be
remembered as the breaking point for top-down planning. There is not enough
information available for the government to micromanage a system as complex
as health care, which represents more than 15% of the economy. Austrian
economist Friedrich Hayek wrote some 50 years ago about the "pretence of
knowledge," meaning the conceit that planners could know enough about
complex markets to dictate how they operate. He warned against "the belief
that we possess the knowledge and the power which enable us to shape the
processes of society entirely to our liking, knowledge which in fact we do
True enough, ObamaCare was
built on an unworkable foundation. The original sin in health care goes back
to the wage and price controls in effect during World War II. The federal
government let employers avoid wage controls by adding health insurance as
an untaxed benefit for employees. Employer-provided insurance has since
insulated most Americans from the cost of care. The predictable result is
endless demand for increasingly inefficient services.
When was the last time you
saw prices posted in a doctor's office or hospital?
Yet price is the key
means through which information is transmitted, at least in functioning
markets. [Note by FM Duck: In
fact, this is the basis for Hayek's Nobel Prize: The Subjective Theory
of Prices in a Free Market in which he showed that the concept of "prices"
is (1) a subjective anticipation of a future service expected to be received
by each party in any exchange, (2) each trader's expectation is prioritized
and thus subjectively unequal, not equal as economists had previously
supposed, and (3) if the government supersedes this free market pricing
mechanism, no true market prices reflecting supply and demand can come about
for businessmen to calculate and forecast profits and losses, and thus the
very pricing mechanism that is necessary for a market to function is always
destroyed under governmental intervention, and this action -- not good or
bad intentions -- is what ultimately always leads to the failure of
government planned economies such as socialism, fascism, and communism.] There are many ways to make sure that the poor and seriously ill
get medical care, including direct subsidies that don't undermine the price
mechanism. But the complexity of accomplishing this goal in a hyperregulated
health-care industry overwhelmed the system.
If the justices do send
ObamaCare back to be rethought, politicians should address the problem with
more humility. We'll know health care is on the road to recovery when basic
information such as clear rules and transparent prices are again part of the
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