Does Obamacare Secure the Blessings of Liberty?

March 6th, 2014

During oral arguments in NFIB v. Sebelius, the Solicitor General of the United States, charged with defending the Affordable Care Act, made the argument that the law actually promotes liberty. As I retell in Unprecedented,  Solicitor General Verrilli drew together a connection between freedom, and health care security.

Verilli continued, “There is an important connection.” He paused for emphasis. “A profound connection, between that problem and liberty. And I do think it’s important that we not lose sight of that.” These were comments likely aimed at Justice Kennedy, who has grounded his ve the opportunity to enjoy the blessings of liberty . . . “In a very fundamental way, this Medicaid expansion, as well jurisprudence in the protection of individual liberty and dignity interests.

Turning to the practical realities at hand, “in this population of Medicaid eligible people who will receive health care that they cannot now afford under this Medicaid expansion, there will be millions of people with chronic conditions like diabetes and heart disease, and as a result of the health care that they will get, they will be unshackled from the disabilities that those diseases put on them and has the provisions we discussed yesterday, secure the blessings of liberty.” Here, Verrilli was quoting from the Preamble to our Constitution, which states that the United States was formed to “secure the Blessings of Liberty to ourselves and our Posterity.”

To many, this is a bizarre notion of liberty. Mandating that millions of Americans purchase a product they may not want, and forcing sovereign states to expand a program against their wishes, so that others have access to more-affordable health insurance is a funny conception of liberty. In response, Paul Clement, who was arguing on behalf of the challengers in NFIB painted a very different vision of liberty.

Without skipping a beat, the Chief Justice said, “Thank you, General. Mr. Clement, you have 5 minutes.” Paul Clement rose to have the last word, and provided an impromptu rebuttal that offered a very different vision of what liberty means.

“Let me just finish by saying I certainly appreciate what the Solicitor General says, that when you support a policy, you think that the policy spreads the blessings of liberty.” After three long, hard-fought days of argument, Clement would have the last word on liberty–aimed directly at Justice Kennedy.

“But I would respectfully suggest that it’s a very funny conception of liberty that forces somebody to purchase an insurance policy whether they want it or not.” This was not the liberty of Justice Kennedy.

Clement echoed a point he had made in his brief: “The Constitution protects and promotes individual liberty, while the mandate’s threat to liberty is obvious. The power to compel a person to enter into an unwanted commercial relationship is not some modest step necessary and proper to perfect Congress’ authority to regulate existing commercial intercourse. It is a revolution in the relationship between the central government and the governed  . . .  However, by making clear that this uncabined authority is not among the limited and enumerated powers granted the federal government, this Court will preserve our basic constitutional structure and the individual liberty, state sovereignty, and government accountability it guarantees . . .  An individual can do very little to avoid the long arm of the federal government other than refrain from entering into the commerce that Congress may regulate. ”

Clement continued, “And it’s a very strange conception of federalism that says that we can simply give the States an offer that they can’t refuse, and through the spending power which is premised on the notion that Congress can do more because it’s voluntary, we can force the States to do whatever we tell them to. That is a direct threat to our federalism.” This was not the federalism of Justice Kennedy. Clement wrote, in his brief “If this is to remain a system of limited and enumerated federal powers that respects individual liberty, accountability, and the residual dignity and sovereignty of the States, the individual mandate cannot stand”

I call these dichotomous views the two conceptions of liberty in NFIB v. Sebelius.

Most strikingly, one of the key benefits that supporters of the ACA cite is that now people, no longer having to worry about buying healthcare, can pursue their own happiness as entrepreneurs. Free health care makes them more free.

This piece in CNN, titled “I’m quitting my job.Thanks, Obamacare!” illustrates this dynamic.

Now that Karen Willmus can get health insurance through Obamacare, she plans to quit teaching 9th grade English at the end of the school year.

The 51-year-old found policies on the Colorado state exchange for about $300 a month. That’s less than what she’s paying now for employer-sponsored coverage and less than half what she paid on the individual market in 2007.

Like Willmus, millions of people could quit their jobs or cut back on their hours in coming years because of Obamacare, according to a recent report from the Congressional Budget Office.

Though, stated differently, the Affordable Care Act will eliminate over 2.5 million jobs during the next decade.

The report found that Obamacare could reduce the labor force by the equivalent of 2.5 million workers by 2024, as many Americans may opt to work less to retain eligibility for Medicaid or subsidies. That sparked a fresh round of criticism that health reform is hurting the economy.

As an economic argument, this position is difficult to digest. Not all of these people leaving their jobs are doing so entirely volitionally. First, the ACA makes employment much more expensive–especially for those at the bottom of the pay-scale. Second, many jobs that were eliminated during the last downturn, will not be recreated, because the marginal cost of the employee is not worth it.

Though, some are spinning this news as a good thing–that people should be able to leave their jobs, retire earlier, and seek out entrepreneurial activities. This is Verrilli’s notion of freedom–that the ACA secures this blessing of liberty.

But for some, Obamacare is allowing them to become entrepreneurs or retire a few years early since they’ll be able to find affordable individual coverage for the first time.

Instead of eating bonbons on her couch, Willmus plans to start her own business with her teen daughter publishing materials for non-native English speakers and others looking to improve their literacy. She expects to work even more than she does now and hire two or three people.

“I can’t afford to go out and buy insurance while trying to start a business,” said Willmus, of Colorado Springs, Colo. “Obamacare will allow me to be more comfortable at risking what I own.”

As a child of two entrepreneurs, I have great respect of those willing to risk their wealth on going it alone. But the unavoidable fact is that nearly all of these businesses will fail. Tyler Cowen addresses this point in his new book, Average is Over.

As we should expect from these developments, many American workers are turning to self-employment. For instance, in 2010 an average of 565,000 Americans a month started businesses, the highest rate of the last decade. We’re not suddenly more energetic; rather, a lot of these people had a hard time finding remunerative work elsewhere. Starting your own business may seem like praiseworthy creative entrepreneurship, but often it is a sign that labor markets are not absorbing everyone at a reasonable wage.

These two differing conceptions of liberty–positive and negative–will frame any debate over how the ACA impacts Americans.