Their conclusion is powerful. The three academics review various studies that show that either doctors and hospitals have not raised their fees or have done so at a negligible amount. After reading their findings, I was all prepared to write about how the justification of the individual mandate may not be so strong.
I was going to do so until I finished reading the three academics' article. They continue, without missing a beat, writing that Congress ignored the findings of these studies when it passed the Affordable Care Act.
Specifically, Congress ignored the $40 billion to $50 billion that is spent annually by charitable organizations and federal, state and local governments to reimburse doctors and hospitals for the cost of caring for the uninsured. These payments, which amount to approximately three-fourths of the cost of such care, mitigate the extent of cost shifting and reduce the magnitude of the hidden tax on private insurance.Let's review the logic here.
1. Cost shifting is small (1.7 percent according to the evidence cited by Cogan, Hubbard and Kessler)
2. The reason why cost shifting is so small and therefore there is no hidden tax is because of private donations and tax-funded government spending.
3. Wait, was number 2 an oxymoron?
Ok, ok. I get it. Cogan, Hubbard and Kessler may have a legitimate argument that the Affordable Care Act is not constitutional. There really may not be a large "hidden tax," and therefore the federal government may not have the constitutional right to take corrective action. But the reason why there is not a hidden tax is because of private donations and, ur, taxes. It's just a little bit more hidden than the alleged hidden tax.
So what does this mean?
If the Supreme Court rules that the Affordable Care Act is unconstitutional, then conservatives will need to find some way to address the inefficiencies in the current health care industry. There is a great deal of cost shifting taking place. Just because it is being covered "annually by charitable organizations and federal, state and local governments to reimburse doctors and hospitals for the cost of caring for the uninsured," doesn't mean it isn't there.
Cross posted at The Cross Culturalist.