by Richard Reece, MD
Obamacare faces a shaky future because of its call for an individual mandate. This mandate requires people to buy insurance or face income tax penalties, which the IRS would presumably enforce.
As I write, attorney generals in 35 states are in the process of challenging the individual mandate as unconstitutional.
The individual mandate issue is important. Kill it, and you kill Obamacare.
Why? Because the individual mandate is the political mechanism for controlling costs by spreading risk and dropping cost. The mandate allows the government to bring enough people into the insurance pool to make it affordable. It is a form of universal taxation.
The only other way to spread the risk is by changing the tax code to bring about universal coverage through a single-payer system, which is politically unpalatable to most Americans.
Feelings run high on the individual mandate issue. In a previous entry, “Health Reform Mandates – A Sleeper Issue,” I led off with a yell from a New Hampshire café customer, who shouted, “I won’t pay it! And I’ll shoot the first person who tries to make me go to jail because I will not buy health insurance.”
Then, I added, “Every legislative act has a sleeper issue. With health reform, the individual mandate is that issue. The very term, ‘mandate’ runs against the grain of individualism, a strong trait in American culture.”
Why is the individual mandate a sleeper issue?
One, conservatives and independents strongly oppose the mandate because it will be unpopular with their constituents, whose main issues are an overreaching government depriving us of our individualism and driving us into deeper and deeper national debts.
Two, the legal issues are murky and muddled with lawyers deeply divided about whether the mandate is or is not constitutional. There’s a mare’s nest of legal opinions out there, meaning the issue is untidy and confusing and political. As Timothy Jost, a lawyer explained in the March 11th NEJM of the resistance of states to the individual mandate, “These resistance efforts are not about law – they are about politics.”
Three, it will difficult and expensive for the IRS to enforce a tax penalty on individuals who do not comply with the mandate, which starts in 2014 and is fully phased in on 2016. There are a number of exceptions, including those who cannot afford it and those who oppose it on religious grounds. Also the Senate bill waives criminal penalties and prohibits the IRS from imposing liens on taxpayer’s incomes or property for failing to pay. In other words, it invites individuals to flaunt the law and may well be unenforceable.
Richard Reece is the author of Obama, Doctors, and Health Reform and blogs at medinnovationblog.
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{ 21 comments }
this is a catch-22. the less an individual mandate is enforced/enforcable, the faster the private insurance industry will collapse, hurtling us that much faster towards single-payor. which individual americans opposed to the mandate definitely don’t want.
5 to 4 at SCOTUS – one way or another. Hard to predict which.
Oh, and as for claiming it’s a tax, didn’t Obama promise no new taxes for the middle class?
Finally, from a retired Con Law Professor: “The Constitution stops at the IRS’ front door.”
The IRS has had opportunities to “police” healthcare in the past (simple stuff really) and could not be bothered:
http://drjshousecalls.blogspot.com/2006/10/lovely-october-morning-with-irs.html
Their position at the time was that YOU cannot lie to the government (you will be hunted down and go to jail), but “non-profits”/other institutions that exist on the public’s largesse CAN lie to you . . . no matter what the law says about that.
And the liars (who do not see a single patient) can keep collecting their phat paychecks.
US Attorneys General do not think morality or ethics are worth enforcing – within their own Federal programs. I’m supposed to believe now that the IRS can or will effectively enforce Obama’s “morally imperative” private insurance mandate?
It’s all very comforting as this new bill hands the policing of healthcare over to the IRS isn’t it?
I wouldn’t mind that health insurance not be mandatory if those people who refuse to get it promise to pay out of pocket or not show up at the ED if they ever get sick. Or if they do show up, that the ED is not required to treat them.
I would welcome a single-payer system, and I know many other people who feel the same way. In a few years I will be part of the single-payer system of Medicare, I would love to see that system extended for my young adult children.
One way to have everyone pay in is to have a value added tax on goods +/- services and provide a rebate applied to your income taxes if you have proof of insurance.
Grammar police say: “attorneys general,” not attorney generals. Just sayin’.
Chuckle. Yeah. My bad.
You got it right. Reece got it wrong.
4) None of these arguments make sense if the initial premise is correct, i.e., that by forcing (let’s generously say) 40 million people into a system with 260 million already insured that their pay-ins will exceed their costs, thereby bringing down the cost of healthcare.
But if that’s correct, a) the uninsured actually don’t need health insurance since they’re going to give a lot more than they take (in the premise), and b) if that’s true then what’s the point of all of this?
As a healthcare professional, I totally agree with Obamacare. Something has to be done. The abuse that I see daily is atrocious.
Why wouldn’t everyone want to have health care anyway?
I agree with the earlier poster that just make sure that you don’t show up at the ER needing care.
I remember reading somewhere that when the risk pool size reaches a certain threshold that adding more members (even if they are all young and healthy) doesn’t actually decrease the costs that much if any…and that threshold was around 10,000! That’s why larger companies can insure themselves. So… adding 15-40 million more to the existing pool won’t change the risk cost at all!
Does anybody else remember reading something like this?
The main reason for the individual mandate is not to increase the size of the pool; it is to avoid the adverse selection problem if you just prohibit pre-existing condition restrictions by itself. If you just prohibit pre-existing condition restrictions, then some people will go without insurance while healthy, then buy as soon as they are diagnosed with something that will require expensive treatment in the future (of course, they will still be taking the risk of a large medical bill due to accidental injury or some such “instant” event). That would result in the insurance pool being composed only of sick people, which would make the insurance not really insurance at all, but prepaid medical care (and just as expensive as self-paying; of course, it can be argued that medical insurance today is mostly prepaid medical care, with only a little bit of insurance thrown in).
Although employer-based insurance is due to history, it remains because employer-based groups include healthy people as well as sick people.
The individual mandate can work if enforcement is increased just to the point where it makes not paying more of a hassle than paying. Then it becomes like speeding tickets where some people will try to fight the ticket while the majority will just pay. Unfortunately, this is really is the Achilles heel of the plan at this stage.
The IRS has already come out several times and let people know that they will not be going after people because of the insurance only.
They don’t have the time or money to do that anyway. They already are behind on just tax issues alone.
Everyone deserves dental care as well. Think of the poor children who go without and the adults as well and the pain and shame and embarassment of poor dental hygiene. Why isn’t dental care mandated as well? It should be universal also.
Mark, while nothing would make me happier than the Congress using and abusing the dental profession in the way it has the medical profession (it might wake even more people up), you’re missing an important point: Good dental hygiene in childhood – which one could very effecitvely argue is brought about by good preventative medical care and simple parental responsibility (I know, it’s an alien concept these days) – would prevent a great deal of the “pain, shame and embarassment” so many of these “poor children” endure.
Such care (or at least the insurance for it) has been mandated now. And, in this utopia the Congress has imagined, access (a separate matter from payment) – is not going to be a problem as Obama does everything he can to drive doctors away from primary care.
So. It’s already “covered”.
Here’s a thought for the parents of all those poor children: Buy a toothbrush. Use it. Floss. And cut out the sugar & milk bottles at bedtime.
It’s much cheaper and less shameful/painful than the alternative.
http://www.boston.com/news/local/massachusetts/articles/2010/04/04/short_term_customers_boosting_health_costs/
Seems Massachusetts is already seeing the “moral hazard” effect of prohibiting pre-existing condition denials, while allowing a relatively low fine for failure to insure.
Sure as night follows day, the rational response is to pay the relatively cheap fine, get insured when you need healthcare, then drop it when the treatment episode is done.
Read the article. Looks like Massachusetts is looking seriously at re-instituting “pre-existing condition” denial or delay in insuring someone with a pre-existing medical condition.
This issue is not one of approval or disapproval with the healthcare reform bill. Do you think the Federal Government has the right to compel it’s citizens to purchase something for the greater good? That is the question and it has far reaching implications. This question should not split along the same lines as the healthcare reform debate did. I cannot imagine people from the left, the right or the middle wanting the government to have that kind of power. Remember, one day another party will control congress. What will they compel you to buy?
DrLemmon,
Amen, that’s what I say. People had better wake up, because the goverment has only just begun. The kind of power that is being grabbed in this whole healthcare issue is frightening. I have been thinking exactly what you stated, what will the left leaning citizens feel when all this control is put in the hands of the evil right. Wow, I can hear them screaming now. This power and control in dangerous no matter what side of the political spectrum you fall, and everyone should be very concerned.
DrLemmon “…..What will they compel you to buy?…..”
Guns come to mind. Seems to me, that’s been tried before.
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