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American Journal of Law & Medicine


Obamacare, federalism, individual mandate, cost-benefit theory


This Article argues that most commentators have exaggerated all three of the relevant issues with Obamacare: its efficiency gains, its liberty costs, and its departure from the status quo ante's federalist balance. The collective action problem with state insurance regulation is not as bad as scholars of collective action federalism have argued; the liberty implications of the individual mandate are not as extreme as scholars of libertarian federalism have argued; and the shift from state to national power is not as significant as the litigants and courts have argued. Although I do not make the strong claim that Obamacare reaches the optimal balance between regulatory efficiency and individual liberty, I do make the weaker doctrinal claim that Obamacare strikes an eminently rational federalist balance, which deserves judicial deference.

This Article proceeds as follows. Part II makes the case that both collective action federalism and libertarian federalism rest on sound foundations but that either theory taken alone would argue against federalism-in favor of either full national or full state authority. That Part then argues that the first-best theory of federalism would seek the optimal balance between these competing visions. Part II fleshes out the two complicating factors in the simple version of cost-benefit federalism: the frequent hybrid state-national strategies that Congress pursues and the impossibility of discovering optimality with precision. Part III then makes the case for judicial deference to Congress's federalism. Part IV turns to Obamacare and argues that the literature and the litigation alike have exaggerated the statute's relevant federalism implications, including its efficiency gains, its liberty costs, and its departure from the status quo ante. Part IV also argues that Obamacare strikes a rational balance between state and national power that ought to be preserved.