U. of Chicago Law Prof. Epstein on Health Bill's inner scheme to eliminate private Insurance

From the Wall Street Journal, December 22, 2009:

Harry Reid Turns Insurance Into a Public Utility

The health bill creates a massive cash crunch and then bankruptcies for many insurers.

As Harry Reid's 2,000 page health-care bill is being rammed through the Senate, most of the public debate has been focused on its expanded coverage, its now defunct public option, and its high taxes. Lost in the shuffle has been its intensely coercive requirements on health insurance issuers, especially in the individual and small group markets. Taken together, these restrictions are likely to drive them out of business and run afoul of the constitutional guarantee that all regulated industries have to a reasonable, risk-adjusted, rate of return on their invested capital.

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At this point, the Reid bill is on a collision course with the Constitution. I take it for granted that, constitutionally, the federal government could not just require all private health insurers to liquidate tomorrow, without compensation.

What's done here is a close second. The inexorable squeeze between the constricted revenue sources allowable that insurers get under the Reid bill and the extensive and uncertain new legal obligations it imposes is likely to result in a massive cash-flow crunch that will drive the firms in the individual and small-group health insurance markets into speedy bankruptcy. The Supreme Court should apply the constitutional brakes to this foolhardy scheme if Congress doesn't come to its senses first.

Click on over and read the whole thing.