The Rule of Lawton

Government subsidies for health care invite arbitrary intervention.

The scariest thing I've read in a long time was an article that appeared on the front page of TheNew York Times under the bland headline, "FLORIDA PREPARES NEW BASIS TO SUE TOBACCO INDUSTRY." The story was about the state's recently approved Medicaid Third Party Recovery Act, which does not sound like a law capable of arousing much fear (or interest). But this piece of legislation should send a chill down the spine of anyone who cares about the rule of law.

The act is aimed at forcing tobacco companies to reimburse the state for the cost of treating smoking-related illnesses under Medicaid. Until now, product-liability suits against tobacco companies have had very little success. It's hard to prove in any given case that smoking caused a plaintiff's illness. Furthermore, juries have generally accepted the argument that smokers voluntarily assume the risks involved in smoking. The Florida law says the state does not have to worry about these barriers: It's enough to show that smoking is statistically associated with disease, and it doesn't matter that smoking is a free choice.

If the law is not repealed (many legislators who voted for it apparently did not understand its effect), it will eventually be challenged in court. It's hard to imagine a clearer violation of the Due Process and Equal Protection clauses, which represent safeguards that are essential to the rule of law.

Whatever their statist sympathies or ambitions, American judges and legislators still claim to believe that government actions should be constrained by procedural rules, that laws should be generally applicable and announced in advance, that like cases should be treated alike, according to neutral principles. Government officials may not capriciously single people out for punishment. They may not do whatever they like, however they like, to whomever they like.

Yet with the stroke of a pen, Florida Gov. Lawton Chiles has chucked this venerable tradition, the bedrock of the common law and the Constitution. He has announced that tobacco companies, unlike other firms faced with a product-liability suit, may not dispute the claim that their product caused the harm in question and may not argue that consumers should be responsible for their own decisions. He has in effect declared the tobacco companies guilty before they reach the courthouse. Harold D. Lewis, general counsel to Florida's Agency for Health Care Administration, justified the preemptive strike this way: "The state can change the legal criteria for a suit, and that is what we have done."

Business people in Florida are worried that the law's broad language could apply to any industry that makes products associated with disease or injury, such as candy, beef, cars, bicycles, swimming pools, chain saws, or pharmaceuticals. Chiles has tried to reassure them by insisting that his target is the tobacco companies, and he has offered to narrow the wording of the statute accordingly. Thus he has admitted that his support for the measure is completely unprincipled, based on nothing but his animosity toward a particular industry. "We're going to take the Marlboro Man to court," he gloated after signing the bill.

Chiles has discovered in Medicaid a license to use the law as a vehicle for his personal tastes and preferences. "The state does not buy that package of tobacco, so we don't read the warning on the side," he said. "We just pay for the carnage." Politicians already use this rationale to tax smokers. Indeed, you might wonder why the state of Florida needs to make tobacco companies pay for the health-care costs associated with smoking when that's what cigarette taxes are supposed to do.

But logic is not the point. In this connection, Medicaid is simply an excuse to raise revenue and harass an unpopular industry. And experience shows that government subsidies for health care can be used to justify a wide range of measures aimed at punishing, discouraging, or controlling a risky activity: drug prohibition, seat-belt and helmet laws, alcohol taxes, a reduced speed limit, restrictions on bungee jumping-you name it. Since all activities involve some measure of risk, legislators and bureaucrats get to decide which ones should be taxed, regulated, or banned. This is a recipe for the arbitrary exercise of power, the antithesis of the rule of law.

The problem can only get worse if the Clinton administration succeeds in putting most or all of the health-care industry under government control. A person who engages in risky activity and is privately insured or pays for his medical care out of his pocket can at least argue that he bears all the costs involved. A smoker, for example, can plausibly say, "I'm not imposing a burden on anyone. My insurance company has agreed to cover me in exchange for my premium, and that's the end of it. Mind your own business." But once we're all covered by a government-sponsored system, especially one that eliminates risk-based pricing, the smoker's politically incorrect habit-and yours-will be everyone's business.

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