Obamacare

Buy Health Insurance or Go To Jail?

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Looks like President Obama is declining to support the provision in the House health care bill that could send people people to jail if they don't purchase health insurance or pay a penalty. From ABC News:

"What I think is appropriate is that in the same way that everybody has to get auto insurance and if you don't, you're subject to some penalty, that in this situation, if you have the ability to buy insurance, it's affordable and you choose not to do so, forcing you and me and everybody else to subsidize you, you know, there's a thousand dollar hidden tax that families all across America are -- are burdened by because of the fact that people don't have health insurance, you know, there's nothing wrong with a penalty."

Under the House bill those who can afford to buy insurance and don't' pay a fine. If the refuse to pay that fine there's a threat – as with a lot of tax fines – of jail time. The Senate removed that provision in the Senate Finance Committee.

Mr. Obama said penalties have to be high enough for people to not game the system, but it's also important to not be "so punitive" that people who are having a hard time find themselves suddenly worse off, thus why hardship exemptions have been built in the legislation.

I'm not surprised that the idea of jail time for not buying insurance makes Obama uncomfortable. But I think his certainty that an appropriately nuanced bill can be constructed is wishful thinking. Is it even possible to design legislation as a complicated as this that both gets all the sympathetic "exceptions" right and blocks clever, motivated individuals from gaming the system? I doubt it. And as it stands, it looks like the system Congressional Democrats are building is ripe for unintended consequences.