Does Justice Ginsburg Understand Insurance?

James Taranto quotes Justice Ruth Bader Ginsburg, in her consent to the ObamaCare ruling:

The Chief Justice’s crabbed reading of the Commerce Clause harks back to the era in which the Court routinely thwarted Congress’ efforts to regulate the national economy in the interest of those who labor to sustain it. . . . The Chief Justice’s novel constraint on Congress’ commerce power gains no force from our precedent and for that reason alone warrants disapprobation. . . . The Chief Justice also calls the minimum coverage provision an illegitimate effort to make young, healthy individuals subsidize insurance premiums paid by the less hale and hardy. This complaint, too, is spurious.

Ginsburg follows with a long discussion of why universal healthcare and an individual mandate are proper, in the nature of a Brandies Brief. This question should however be irrelevant, as Roberts stated, as the court should neither be encouraging nor hindering Congress’s regulation of the economy. The court should simply be deciding if the regulations are constitutional.

One interesting point in Ginsburg’s arguments was her recurring conflation of health care and health insurance.

THE CHIEF JUSTICE’s novel constraint on Congress’ commerce power gains no force from our precedent and for that reason alone warrants disapprobation. See infra, at 23­27. But even assuming, for the moment, that Congress lacks authority under the Commerce Clause to “compel individuals not engaged in commerce to purchase an unwanted product,” ante, at 18, such a limitation would be inapplicable here. Everyone will, at some point, consume health-care products and services. See supra, at 3. Thus, if THE CHIEF JUSTICE is correct that an insurance purchase requirement can be applied only to those who “actively” consume health care, the minimum coverage provision fits the bill.

She argues that the individual mandate is justified since it is a product that (almost) everyone consumes, since at some point they will seek healthcare. However, the mandate does not require people to buy healthcare. They are required to buy health insurance, which is a different product.

Justice Ginsburg seems to think that insurance is just a common way to pay for healthcare. Think of it as a paid-in-advance payment plan, as opposed to the pay-on-demand payment plan that is the alternative. The individual mandate, in her opinion, is not requiring the purchase of services, but is only regulating the method by which people pay for a service they would (presumably) buy anyway.

Let us grant her for a minute that this is a legitimate way to view insurance. There is still a problem with forcing people to buy insurance since, as Chief Justice Roberts points out, it is forcing the young and healthy to subsidize the cost of insurance for the old and sick. Ginsburg responds to this problem by pointing out that the young and healthy can assume a fair return, in aggregate, on their investment, and even if they end up overpaying, that is the nature of insurance:

THE CHIEF JUSTICE also calls the minimum coverage provision an illegitimate effort to make young, healthy individuals subsidize insurance premiums paid by the less able and hardy. See ante, at 17, 25­26. This complaint, to, is spurious. Under the current health-care system, healthy persons who lack insurance receive a benefit for which they do not pay: They are assured that, if they need emergency medical care will be available, although they cannot afford it. See supra, at 5­6. Those who have insurance bear the cost of this guarantee. See ibid. By requiring the healthy uninsured to obtain insurance or pay a penalty structured as a tax, the minimum coverage provision ends the free ride these individuals currently joy.

In the fullness of time, moreover, today’s young and healthy will become society’s old and infirm. Viewed over a lifespan, the costs and benefits even out: The young who pay more than their fair share currently will pay less than their fair share when they become senior citizens. And even if, as undoubtedly will be the case, some individuals, over their lifespans, will pay more for health insurance than they receive in health services, they have little to complain about, for that is how insurance works. Every insured person receives protection against a catastrophic loss, even though only a subset of the covered class will ultimately need that protection.

So she does understand what insurance is, and that it is not just another way to pay for healthcare. So getting back to the beginning of her opinion, how can she argue that the law can require everyone to buy insurance, since anyway they will end up buying it? What they will buy in the end is healthcare, not health insurance, and she is forced to recognize this difference in order to justify subsidizing effect of the individual mandate.

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