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Wednesday, October 23, 2013

Delay the individual mandate. Then what?

Julius Breyer was a Hungarian Grandmaster who often saw more with his one eye than his opponents saw with two. In a Hungarian tournament his opponent, Von Balla, announced mate in three moves. Breyer simply gave him a bored stare. Von Balla then examined the board and announced mate in four. Breyer said not a word. Von Balla again looked at the board and after several minutes resigned.
One can draw several morals from this story but the one I choose to draw is that in some cases wanting to win at any cost can blind one to impending defeat. We have always maintained that Obamacare was unworkable but we really never believed it. We saw it as the end game toward perpetual government control and the almost total diminution of individual freedom. It could be all of that but Obamacare as it is incomprehensibly written is not the law that can get that job done. The technical failures of have compressed the urgency to bring Obamacare forward and for the first time forced all concerned to look at its blatant flaws.
Let's look at the individual mandate. From a policy point of view, the penalty is way too low to force compliance. Ninety-five dollars for non compliance is almost like a dollar and cost, cost suspended fine for a DUI. Who gives a damn? Practically speaking the penalty (in this case a tax according to John Roberts) should be 5 or 6 times higher if one expects the young and the restless to sit down and do the mind numbing grunt work of buying a policy online. There is talk among Democrats following their exclusive briefing by HHS bureaucrat, Mike Hash, of delaying the individual mandate if all the king's men can't get the website up and running. That's grand and two writers at Bloomberg in a post entitled Saving Obamacare Without Congress plot out how Kate Sebilius can finagle the law to delay the mandate through hardship exemptions. Aside from the fact that there are plenty of districts courts that would do that for her should she attempt to impose the penalty with the website still down it does not solve the problem. The problem is people who really need health insurance will find a way to buy it and those who don't need it won't buy it. Having an insurance pool in which only the sick tread water will disrupt the insurance market. Because of community rating and the no pre-existing condition clause insurance companies may not charge the true cost of a policy. They must over charge the young and healthy but the young and healthy won't go near them. There were plenty of insurance companies who chose not to enter the exchanges. Others priced their policies to be noncompetitive. The insurance industry is aware of a potential death spiral and while a few may take a haircut the majority will not and there will be fewer choices on the exchanges next year should it draw out that long.
There is only one instance in the popular media of a young, single, male buying insurance on the exchanges. He is an Obamabot from Florida. Everyone else the administration has trotted out has a pre-existing condition or is literally falling down sick.
If the Democrats controlled Congress you can bet there would be plenty of talk about raising the penalty for noncompliance with the individual mandate. Hell, some would want to make it a capital offence. As it is Obama is stuck with the law that is written. He can ignore the law only so much. He can grant concessions and waivers but any attempt to tighten control will be met with opposition in Congress and the courts. Suddenly the voters are awakening to the fact that their insurance rates are going through the roof and they may not be able to keep the insurance and doctors they like. As the 2014 elections near Democratic Congressmen will hear loud and clear from everyone whose insurance rates went up and little from those who now have affordable insurance by virtue of government subsidies. The glitches only mask the flaws in the law. It's not checkmate. It soon will be time to resign the game.

1 comment:

  1. Let's not forget, though, that the penalty for non-acquiescence can only be assessed through confiscating an income tax refund and the fined taxpayer can have a $95 penalty or as much as ONE PERCENT OF HIS/HER income confiscated, whichever is GREATER. (And it's up to a family maximum of $285 or 1%, whichever is GREATER.)

    So basically if you make over $10,000 a year, the fine will be more than $95. $40,000 income? $400 fine this year.

    Within 2 years that amount goes up to 2 1/2 percent of family income.

    My guess is they want to bloat the Medicaid rolls and overwhelm the system ala Cloward/Piven.