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Common Currency: Healthcare issue 'a conundrum of our times'

Alan Zemek

If you have been following the healthcare debate, you probably know that the U.S. Supreme Court recently heard oral arguments on one of the key provisions of the law, the individual health insurance mandate.

The constitutional bedrock of federal power to regulate economic activity is based largely upon a 1942 Supreme Court decision that became the basis for our modern understanding of the commerce clause, and the power of Congress to "regulate commerce among the several states."

This case became the gold standard to define the limit of constitutional authority to regulate economic activity, and in a nutshell, if it's "commerce" the federal government has the authority to regulate it.

In fact, the decision in Wickard v. Filburn provided such a broad foundation for the power of Congress to regulate economic activity that for the next 50 years in every challenge that came before it, the court upheld congressional authority under the power of the commerce clause every single time. So as a general proposition, there is not much to debate if the issue is government regulation of the national market for health insurance.

But what about the individual mandate? Does authority to regulate the health insurance market extend to an individual mandate to say that every person must buy health insurance? Can the government penalize my choice not to participate in the market?

How does the commerce clause apply when there is no "commerce?" If the power to regulate economic activity is based on the stream of interstate commerce, how can there be anything to regulate if there is no economic activity?

Basically, it comes down to this: In order to find that the individual health insurance mandate is constitutional the Supreme Court is going to have to decide that something that is not commerce actually is commerce. It may seem pretty far fetched, but there actually is a line of reasoning that could conclude that it does.

In a commonly held truism it is said that you can't prove a negative, but in the field of logic and mathematics there is a generally accepted theorem for doing just that. It is called proof by contradiction. Proof by contradiction establishes the truth or validity of a proposition by showing that the proposition's being false would imply a contradiction.

If you can prove a negative, the government just might win its case. But the reasoning would have to go something like this: An insurance market works by creating a risk pool. In order to create an affordable and well functioning insurance market you need a large number of low risk participants in the risk pool to make up for the cost of the high risk participants or else the market doesn't work.

Therefore, if I am young and healthy and choose not to purchase health insurance I have deprived the risk pool of the benefit of a low risk participant, and that increases the cost of the pool to everyone else. Therefore, my decision not to engage in an "economic activity" has an effect on the national market for health insurance, which makes it possible for Congress to effect legislation on my decision of non-participation.

The debate about the way our society finances healthcare is a reflection of our self contradictions. We want competition in the marketplace to deliver more services and lower prices, and we expect that economic self interest will produce a functioning market based on supply and demand.

But we also don't want hospitals and insurance companies dumping patients who are essentially just uneconomical customers. In fact, almost every aspect of the healthcare market operates on either cost shifting or uneconomical choices so why would we expect the market to produce rational behavior or rational results?

The Court's decision in this case could go either way, but I am not convinced yet there will be any victory in it for either side until we are able to understand more deeply that healthcare is economic activity that is not "commerce" and not participating in the healthcare market is not commerce that actually is. It is the conundrum of our times.

Alan J. Zemek is a Park Rapids area developer and author of "Generation Busted: How America Went Broke in the Age of Prosperity." You can follow his blog, or comment on this article on his website, www.genera