Insurance Mandates - Weak Link?

I see the mandates in the health care bill as the weak link for two reasons. First, most immediately, I believe that compelling an individual, through the use of fines, and potentially jail time, to purchase health insurance should be found unconstitutional. A 9th amendment argument could be made, and that seems most fruitful to me. Regardless of the success of such a lawsuit, it would also provide a vehicle to ridicule the administration's position and continue to erode public support for this bill. We might reasonably ask what limit does the constitution place on the Congress if the mandate is allowed to stand. This might hopefully change the terms of debate about the commerce clause. Also from the Volokh Conspiracy on the merits of this approach:

We should also remember that litigation is likely to center on the bill’s mandate requiring individuals to purchase health insurance even if they prefer not to. This is one of the least popular elements of the bill, a fact that would give the courts further political cover. Eliminating the individual mandate might eventually destabilize other parts of the bill. Without the mandate, insurance companies might start lobbying for repeal of other elements of the plan (since the bill would no longer be a huge bonanza that gives them many additional customers). If the ban on excluding coverage of preexisting conditions is maintained, the elimination of the mandate would incentivize citizens to wait until they get sick to purchase insurance. It’s unlikely that such a system could persist for long.

As a symbolic matter, I think someone is going to end up in jail for not paying the fines involved with the insurance mandates. This will also rally support for repeal, as the true Stalinist nature of this bill is clearly brought home by images of someone behind bars.

Dang, now I need a loan for bail AND the money to buy health insurance.

Professor Perry and others have pointed out the other weakness of the mandates; the fines are too small to prevent the bad behavior of individuals opting out of health insurance until they are sick. Then their pre-existing condition won't prevent them from opting back in just in time to be covered.

Consider: 27 million people are covered by health insurance purchased directly, i.e. outside employer-based plans. The average cost of an insurance policy with family coverage in 2009 is $13,375. A married couple with a median family income of $75,000 who choose not to insure would be subject to a fine of 2.5 percent of that $75,000, or $1,875. So the family would save a net $11,500 by not insuring. If a serious illness occurs--a chronic condition or a condition that requires surgery--they could then buy insurance. Since fewer than one family in four has annual health-care costs that exceed $10,000, the decision to drop coverage looks like a good bet. For a lower-income family, the fine is smaller, and the incentive to be uninsured is even greater.

Interestingly enough, this might have the opposite effect than intended. Specifically, if millions of Americans drop their health care insurance as well as employers, who only face a $2000 per year fine, then a new market place for cash only medical services might develop. This could conceivably start a process to wean the public from third party payer, once they began to see how convenient and inexpensive it could actually be. See Carpe Diem for a post on Retail Health Clinics.

I note that the subsidies don't kick in until 2014, so we should keep brainstorming the strategy for roll back. Incremental roll back is probably more feasible, but I am no expert.