Keep health care in the real world

When the sun hits the brilliant white marble of the Supreme Court on a clear spring day, the building is so bright you can't look at it. Thus illuminated, the court becomes the sun: the epicenter of the Washington world.

It is rare for the Supreme Court actually to be at the center of events in government. But this week, for a few days, it will be.

The signature accomplishment of President Obama's administration is on the line. To strike down the Affordable Care Act, the court would have to announce that mandatory insurance coverage is, quite literally, beyond the power of the government.

In economic terms, that would mean saying that universal health care in the United States can't be achieved except through a single-payer system administered entirely by the government, which in political terms seems essentially impossible. If the mandatory coverage provision goes, so does the whole program.

Obama's legal team has embraced this all-or-nothing approach, and for good reason. They have told the court that mandatory coverage is not "severable" from the rest of the law. If the court holds that the government cannot require you to be covered or pay a fine, guaranteed issue of coverage to all comers, the core of the law, will cease to operate.

It's about the common sense of economics. We each have better information about our own health than the insurance company does. If the price of insurance reflects the average health of the population, the healthiest people are most likely to turn down coverage.

As a result of this adverse selection, economists have shown, the system can unravel. This would leave a large section of the population without insurance, even though they would benefit from coverage by a greater amount than it would cost to provide it for them.

The Obama legal team, therefore, does not want the Supreme Court to hide behind the fig leaf of saying that it has only struck down part of the plan if it strikes down mandatory coverage. Mandatory coverage is the linchpin of the health care bill, plain and simple. Getting it past Congress was the most significant domestic policy accomplishment not only of this presidency, but of any presidency since the Great Society programs of Lyndon Johnson.

The economic nature of the mandatory-care provision goes to the heart of the arguments that the Supreme Court is hearing this week. The Constitution expressly gives Congress authority to regulate commerce between the states.

Everyone agrees that this power has expanded over the last two centuries. Its high point was reached during the era of the New Deal, when the court held that the government could regulate a farmer's production of wheat for personal use, because it substituted for wheat he might have purchased from others and thus affected the grain market.

Does the mandatory-coverage provision similarly affect economic outcomes? Clearly -- it fundamentally determines the economic structure of health insurance. The health care bill is a classic instance of government intervention to repair market failure and provide a public good through private means.

The use of regulated private enterprise to produce a public good is characteristic of the Obama administration's ideological vision. The social programs of the past largely provided goods directly -- think Social Security or welfare.

What, then, are the arguments to strike down the law? They turn on the claim that there is something new and troubling about requiring citizens to pay a fine for having failed to do something. Inaction, rather than action, results in the penalty.

To avoid this argument, Obama could have (and perhaps should have) called the mandatory coverage fee a tax rather than a fine. That would have made it much more difficult to claim that the law was penalizing inaction.

But for obvious political reasons, Congress and the president were unprepared to say that they were creating a new tax. Constitutional salvation might well have been political damnation.

Nevertheless, the court ought to skip the political semantics and treat the fee as the tax which, in essence, it really is. The court is capable of such common sense: Last week, Justice Anthony Kennedy wrote in a landmark opinion that our criminal-justice system is today a system of plea bargains, not of trials.

That significant decision only came about because he and four other justices described the world the way it really is.

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