Drs Gruber and Cutler contend that the ACA individual mandate is essential for the integrity of the medical payment system which they favor but this is hardly the constitutional point. These Harvard economists should instead attend to whether the ACA comports with basic economic principles (as outlined in the textbook of economics written by their own Harvard colleague (1)) and leave the legal reasoning to others.
Medical insurance is not insurance at all, but is a high priced pre- payment system. It is by far the worst way to pay for anything. It relieves the patient and physician from the trouble of making appropriate price motivated trade-offs and substitutions. The system requires large administrative cost for coding, billing and documentation, none of this with medical value. Inherent in all this is a large amount of wasted resources which could be directed toward useful alternatives. Price fixing produces waste, decrease in quality and loss of competitive forces that improve services and bring prices down.
It seems incongruous to contend that a citizenry who already pay for this system indirectly cannot pay for it more directly. Small items like lab tests and doctor visits and even small procedures are affordable out of pocket for the average individual and there would be less waste and lower cost if paid this way. Bona fide lower cost insurance that belongs to the individual could pay for high priced unexpected medical events.
Granted that persons with low income or serious chronic illness need society's help but total government command and control is surely not the best solution.
The ACA mandates an expansion of our present wasteful pre-payment price-fixed system to every individual. It forces free citizens to waste the fruits of their labor for the sake of a collectivist experiment. It will almost certainly raise the cost and reduce the availability of medical services for everyone.
1. Principles of Economics 2011 Edition. Chapter 1. N. Gregory Mankiw.
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