Why Broccoli Matters

Many supporters of ObamaCare fatuously dismiss what broccoli has done to raise doubt about the wisdom of the individual mandate to purchase health insurance and, more broadly, the limits of the law.  This might be due in part to Justice Antonin Scalia, who formally introduced broccoli to the public debate last week and, in doing so, misconstrued his point when he suggested that "everybody has to buy food sooner or later, so you define the market as food.  Therefore, everybody is in the market.  Therefore, you can make people buy broccoli."

The broccoli issue is not about regulating the food market.  It's about the uniqueness of the health care market, an observation frequently made by ObamaCare supporters in an attempt to establish a limiting principle.  The argument goes like this: because non-participants in the market (i.e., "free riders") present a risk that must be accounted for, it is appropriate to require these individuals to enroll for coverage or pay a penalty.

But the uniqueness of the health care market is precisely why the mandate should not stand.  Many of the decisions we make in our lives -- including what food to eat -- directly impact our health risk matrix.  In a cost-sharing environment such as the current health insurance market, these and other lifestyle decisions can have an enormous impact on health care costs.

It is true that free riders pose a risk to our health care system, but that risk has been overstated.  While certain hospitals are legally required to provide emergency care to the uninsured, they are not required to provide it for free (and they often don't) if the recipient is deemed able to pay.  And ability to pay, of course, is one of the defining characteristics of a "free rider."  Besides, data from the Department of  Health and Human Services show that Medicaid enrollees, largely because of limited access to primary care doctors, are twice as likely to seek care through the emergency room as are the uninsured.  The idea that the individual mandate was designed to account for free rider risk has been exposed as a red herring.

There are far greater risks the health care market must account for than that posed by free riders.  For example, a much larger risk is created by individuals with poor dietary and exercise habits who have, as a result, become obese.  According to CDC data from 2010, about 36% of U.S. adults and 17% of children and adolescents (aged 2-19) are obese.  Such higher-risk individuals are more likely to suffer from obesity-related diseases such as heart disease, Type 2 diabetes, hypertension, infertility, sexual dysfunction, and other conditions that require costly maintenance medications and long-term monitoring and care.

Other demographic and behavioral and lifestyle factors can infuse the health care market with added risk.  Individuals who drink or smoke excessively, who text while driving, or who lead high-stress lives without making an effort to manage them bring more risk to the calculus.  Likewise, individuals who choose to live in high-crime cities or engage in high-risk jobs pose more risk than those who are more safely situated and employed.

Such higher-risk individuals are poised to consume a disproportionate share of our health care resources, and this is true even when factoring in the premiums they pay.  Information asymmetry (which is endemic to any insurance market) and community-rating price controls (which are a special plague of ObamaCare) make it difficult for insurance companies to assess and price risk accurately and, as a result, distribute cost equitably.

To the extent these higher-risk individuals are covered through Medicare, Medicaid, or any federally sponsored fee-for-service program, the majority of costs is borne by taxpayers...and by participants in the private insurance market on whom the unreimbursed costs are shifted.  But even if these higher-risk individuals are covered by private insurance, the majority of the cost incurred is still paid for by the masses through cost-shifting and higher premiums.

Returning to broccoli: if the mandate that individuals enter private, third-party contracts in order to manage health care risks and costs is deemed constitutional, then it is no leap at all to suggest that the federal government can also require individuals to sign contracts with health clubs, substance abuse clinics, dietary consultants, etc., because these steps would, like the mandate, help manage risks and costs.  In fact, such arrangements would do so more effectively because they would target not a few million free riders who pose relatively little risk, but rather the vast number of individuals who engage in demonstrably higher-risk lifestyles.

Supporters of the law insist that all this broccoli talk is nonsense.  Steven Pearlstein, writing in The Washington Post, observes that "the power to regulate, or to tax, or to criminalize is the power to regulate, tax or criminalize stupidly."  Fair enough.  But he then goes on to suggest that there is little reason to believe that this Congress can't be trusted to find its own limits:

[T]here are already in the case law scores of judicial tests that have been successfully applied to a wide range of congressional actions and powers to assure that they are reasonable and rational, that they are not arbitrary, that they are necessary to achieve a legitimate or compelling state interest.

James B. Stewart, columnist for The New York Times, concurs (emphasis added):

[A] succinct answer to Justice Scalia's question is that the commerce clause would not limit Congress's ability to regulate broccoli -- if members of the House and Senate were crazy enough to pass legislation requiring all of us to eat green vegetables and if that were deemed a rational way to regulate commerce.

But would such legislation be considered crazy by Washington denizens?  Sin taxes on alcohol, cigarettes, and soda are in effect in several states and have been considered by President Obama himself.  Several countries levied "fat taxes" for the first time in 2011.  Can we trust that mandating the consumption of broccoli would be dismissed so readily, particularly when many supporters of the individual mandate attempt to justify it by calling it a tax, and particularly when a broccoli mandate might be said to encourage healthy eating habits among our youth, stimulate a cherished sector of our economy, and contribute to the management of spiraling health care costs?  To many in our nation's capital, that's what's known as a win-win-win.

R. E. Bowse is a former human resources and communications consultant.  He currently teaches in the Isenberg School of Management at the University of Massachusetts.

Many supporters of ObamaCare fatuously dismiss what broccoli has done to raise doubt about the wisdom of the individual mandate to purchase health insurance and, more broadly, the limits of the law.  This might be due in part to Justice Antonin Scalia, who formally introduced broccoli to the public debate last week and, in doing so, misconstrued his point when he suggested that "everybody has to buy food sooner or later, so you define the market as food.  Therefore, everybody is in the market.  Therefore, you can make people buy broccoli."

The broccoli issue is not about regulating the food market.  It's about the uniqueness of the health care market, an observation frequently made by ObamaCare supporters in an attempt to establish a limiting principle.  The argument goes like this: because non-participants in the market (i.e., "free riders") present a risk that must be accounted for, it is appropriate to require these individuals to enroll for coverage or pay a penalty.

But the uniqueness of the health care market is precisely why the mandate should not stand.  Many of the decisions we make in our lives -- including what food to eat -- directly impact our health risk matrix.  In a cost-sharing environment such as the current health insurance market, these and other lifestyle decisions can have an enormous impact on health care costs.

It is true that free riders pose a risk to our health care system, but that risk has been overstated.  While certain hospitals are legally required to provide emergency care to the uninsured, they are not required to provide it for free (and they often don't) if the recipient is deemed able to pay.  And ability to pay, of course, is one of the defining characteristics of a "free rider."  Besides, data from the Department of  Health and Human Services show that Medicaid enrollees, largely because of limited access to primary care doctors, are twice as likely to seek care through the emergency room as are the uninsured.  The idea that the individual mandate was designed to account for free rider risk has been exposed as a red herring.

There are far greater risks the health care market must account for than that posed by free riders.  For example, a much larger risk is created by individuals with poor dietary and exercise habits who have, as a result, become obese.  According to CDC data from 2010, about 36% of U.S. adults and 17% of children and adolescents (aged 2-19) are obese.  Such higher-risk individuals are more likely to suffer from obesity-related diseases such as heart disease, Type 2 diabetes, hypertension, infertility, sexual dysfunction, and other conditions that require costly maintenance medications and long-term monitoring and care.

Other demographic and behavioral and lifestyle factors can infuse the health care market with added risk.  Individuals who drink or smoke excessively, who text while driving, or who lead high-stress lives without making an effort to manage them bring more risk to the calculus.  Likewise, individuals who choose to live in high-crime cities or engage in high-risk jobs pose more risk than those who are more safely situated and employed.

Such higher-risk individuals are poised to consume a disproportionate share of our health care resources, and this is true even when factoring in the premiums they pay.  Information asymmetry (which is endemic to any insurance market) and community-rating price controls (which are a special plague of ObamaCare) make it difficult for insurance companies to assess and price risk accurately and, as a result, distribute cost equitably.

To the extent these higher-risk individuals are covered through Medicare, Medicaid, or any federally sponsored fee-for-service program, the majority of costs is borne by taxpayers...and by participants in the private insurance market on whom the unreimbursed costs are shifted.  But even if these higher-risk individuals are covered by private insurance, the majority of the cost incurred is still paid for by the masses through cost-shifting and higher premiums.

Returning to broccoli: if the mandate that individuals enter private, third-party contracts in order to manage health care risks and costs is deemed constitutional, then it is no leap at all to suggest that the federal government can also require individuals to sign contracts with health clubs, substance abuse clinics, dietary consultants, etc., because these steps would, like the mandate, help manage risks and costs.  In fact, such arrangements would do so more effectively because they would target not a few million free riders who pose relatively little risk, but rather the vast number of individuals who engage in demonstrably higher-risk lifestyles.

Supporters of the law insist that all this broccoli talk is nonsense.  Steven Pearlstein, writing in The Washington Post, observes that "the power to regulate, or to tax, or to criminalize is the power to regulate, tax or criminalize stupidly."  Fair enough.  But he then goes on to suggest that there is little reason to believe that this Congress can't be trusted to find its own limits:

[T]here are already in the case law scores of judicial tests that have been successfully applied to a wide range of congressional actions and powers to assure that they are reasonable and rational, that they are not arbitrary, that they are necessary to achieve a legitimate or compelling state interest.

James B. Stewart, columnist for The New York Times, concurs (emphasis added):

[A] succinct answer to Justice Scalia's question is that the commerce clause would not limit Congress's ability to regulate broccoli -- if members of the House and Senate were crazy enough to pass legislation requiring all of us to eat green vegetables and if that were deemed a rational way to regulate commerce.

But would such legislation be considered crazy by Washington denizens?  Sin taxes on alcohol, cigarettes, and soda are in effect in several states and have been considered by President Obama himself.  Several countries levied "fat taxes" for the first time in 2011.  Can we trust that mandating the consumption of broccoli would be dismissed so readily, particularly when many supporters of the individual mandate attempt to justify it by calling it a tax, and particularly when a broccoli mandate might be said to encourage healthy eating habits among our youth, stimulate a cherished sector of our economy, and contribute to the management of spiraling health care costs?  To many in our nation's capital, that's what's known as a win-win-win.

R. E. Bowse is a former human resources and communications consultant.  He currently teaches in the Isenberg School of Management at the University of Massachusetts.

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