Mary Brown - still a champion of individual liberty!

I read an editorial in the Los Angeles Times the other day about Mary Brown.  Brown is one of the plaintiffs whose case against Obamacare’s Individual Mandate is being appealed to the Supreme Court.  The suit maintains the government should not be able to force Brown (and the other plaintiffs in the suit) to purchase health insurance coverage, and that the Individual Mandate is a violation of her individual liberty.

Mary Brown, since filing the suit, has filed for bankruptcy protection as the auto repair business she ran with her husband has failed.  I am assuming the couple set this business up as a sole proprietorship, which does not afford their personal assets any protection against the business’s loss. 

I am not a lawyer, but as a business major I offer an explanation of a few basic concepts.  Bankruptcy is the legal tool used to help dissolve assets and release liabilities.  It is designed to be a “fresh start” for those who need a financial reset.  Bankruptcy petitions and records are public court records. 

The Brown’s had some medical bills they could not pay, and included approximately $4,500 in medical expenses in their bankruptcy.  The media found what the author of the editorial called “political gold for the Obama administration, transforming Brown from a champion of individual liberty into an exemplar of the problem the new law was designed to address.”

I think there are a few things to point out here.  In order to not be fraudulent, every debt must be disclosed during the bankruptcy process.  I don’t know the Brown’s personally, but I don’t think they wanted to not pay their bills.  They owned a business and were taking part of the great American dream and did not want their government forcing them to buy something they would not otherwise purchase.   They are suffering under the same economic conditions as the rest of us, and those conditions collapsed their business. 

Today the non-partisan Congressional Budget Office released an analysis of Obamacare and found it will cost more than double its original price tag (almost $750 Billion more), and will cover 4 million fewer people than originally projected.   If Mary Brown’s $4,500 in medical bills listed in bankruptcy is gold for the Obama administration…then what do they call the CBO report?  I couldn’t find a response from the White House on their website or in the news, so I’m not really sure what they call it!

But why is Mary Brown and her case important anyway?  Simple.  The Patient Protection and Affordable Care Act (Obamacare) was written without a severability clause.  Severability is the legal mechanism which allows for parts of laws to be separated from other parts of the law, in the event of something like the Supreme Court declaring it unconstitutional.  Congress generally writes legislation with severability clauses because we don’t want entire pieces of legislation taken down because a small part of it is deemed defective or unconstitutional. 

In the case of Obamacare, Congress specifically did not use a severability clause because if the Individual Mandate fell, then the whole point of the law would be lost.  The point of Obamacare is not to give insurance to uninsured Americans; It is the precursor to a single payer system of healthcare.  Before you say I’m reaching – consider this.

Insurance companies generally make money from good conservative investments of the premiums they collect.  In the perfect model, an insurance carrier will collect the cost of claims plus the cost of business expenses and invest that money.  Then, after claims and expenses are paid, it is expected that all of the money collected will be paid out.  The profits come from the investments, not from the premiums.  Of course we don’t live in a perfect world, and insurers make money from premiums too.  In order to pay out only what they take in, they have to be selective about the risks they take.  This practice is called underwriting, and is based upon trends found in claims experiences.

Obamacare all but neuters healthcare insurance underwriting, forcing insurers to take risks they would not have taken before the law was implemented.  They also are going to be forced to take those risks for less money than it takes to sustain them.  This means the health insurance company you purchase your policy from will eventually be unable to make money and need to stop operations. 

And just who does our president expect will be there to “rescue” the people from those evil insurance companies?  You got it – a government run social healthcare plan.  So – just how much “political gold” is in Mary Brown’s $4,500 loss?

I say Mary Brown still has a very solid case, regardless of what she had to declare in her bankruptcy.  The fact remains that Obamacare does take away an individual’s right to choose whether or not to purchase health insurance, thereby infringing individual liberty. 

Your thoughts and comments are welcomed!