Obamacare

Losing the Individual Mandate Would Be a Win, But It Wouldn't Be a Victory

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Earlier this week, Politico published a story suggesting that the individual mandate might be on its way out because a handful of Democratic moderates in the Senate are looking for ways to get rid of it. But that probably wouldn't mean simply excising it from the law. As this NPR story suggests, any move to get rid of the mandate would likely also mean a move to replace it with a different policy.

As I've written before, there are a number of policies that could conceivably serve as an alternative to the mandate and be more likely to pass constitutional muster. For example, you might turn the penalty into an incentive. Or you could drop the policy at the federal level and set up financial incentives for states to enforce the mandate. You could also set up limited enrollment periods so that individuals can't jump on and off their health insurance whenever it's convenient.

These sorts of policy alternatives might solve the law's constitutional troubles. But they won't fix the health care overhaul's long-term policy problems. The law would still have an unaffordable expansion of Medicaid, a program that wastes billions on care of dubious effectiveness. It would still put in place insurance rules that are bound to be gamed, and bound to give individuals fewer choices. It would still institute a system of middle-class insurance subsidies that give employers a strong incentive to dump their insurers into government-run health insurance. And it's still likely to lead to serious long-term deficit damage and the same sort of massive cost-overruns we've seen in Massachusetts, the one state that's already implemented the same basic health policy framework.

All of this would largely be true even if you got rid of the mandate and offered no replacement whatsoever. The mandate is a serious problem from a constitutional perspective, and it certainly deserves to go. But simply losing the mandate and moving on won't cure the law's substantive policy problems.

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  1. Mom! I Victory!

  2. “But simply losing the mandate and moving on won’t cure the law’s substantive policy problems.”

    Of course not, considering the mandate exists primarily to put a band-aid on Obamacare’s policy deficiencies.

  3. “The mandate is a serious problem from a constitutional perspective, and it certainly deserves to go. But simply losing the mandate and moving on won’t cure the law’s substantive policy problems.”

    Like every other controversial problem, Congress won’t do anything about it until it’s absolutely necessary for them to do something.

    …violating that principle is what got them into this mess in the first place.

    1. Uh, I’ll go ahead and disagree. In fact, the more congress does nothing about anything ever, the better off we are.

      But hey, at least they saved us from all those airplanes that have been falling out of the sky due to laser pointers.

      1. Which is why they’re moving so quickly on immigration?

        Any time Congress takes action on something that’s highly controversial, they almost always wish they hadn’t. If they could go back in time, a lot of Congress wouldn’t have voted for ObamaCare–if they still had their seats.

        Unfortunately, as unpopular as regulating every little this and that is with me and you? The reason all those laws get through is because regulating every little this and that isn’t controversial.

        I wish people go more upset about that stuff, but sadly they don’t.

  4. As I understood the original issue, the problem was medical insurance was too expensive. So, the solution is to make it much more expensive and force everyone to buy it.

    How the hell votes for these clowns?

  5. The safest thing might be to simply let the courts kill it. THEN LET INSURANCE COMPANIES COMPETE ACROSS STATE LINES!!!!

    Sorry for shouting but I don’t know why this wasn’t done in the Zeros when supposedly small government Republicans had control of congress and there was a President who (claimed) to support a free market and was of the same party.

    1. The same reason the Democrats haven’t bothered doing things for gays?

      1. You mean Republicans see supporters of free market economics as a group they can lie to in order to get their votes and then betray later on? Hmmm, you could have a point there.

      2. The same reason the Democrats haven’t bothered doing things for gays?

        What proportion of the electorate is gay?

        1. What proportion of the electorate really wants a free market?

        2. Pretty low, but 5% of the electorate consistently voting for you without you having to do anything besides occasionally reminding them how evil the other guys are is a pretty sweet deal.

  6. “Or you could drop the policy at the federal level and set up financial incentives for states to enforce the mandate.”

    Quit with the euphemisms. What you meant was: Blackmail states by threatening to withhold federal highway funding.

  7. A “handful of Democratic moderates in the Senate are looking for ways to get rid of it.” Beware of Dems bearing gifts. The mandate is about the only way we stand a chance of the courts relieving us of this monstrosity before the 2012 election. The only reason a handful of Dems would want to toss the mandate is to render moot the decisions of Judges Hudson and Vinson. Secretly, these same Dems are calculating that they can avoid repeal with a filibuster after 2012, and that it will become politically impossible to repeal when the “benefits” kick in in 2014.

  8. And they are also counting on substantial GOP support for non-denial of insurance for pre-existing conditions. A GOP congressman proudly proclaimed his support of such to me last week. I objected and he walked it back a bit, but it is clear the majority wants those with pre-existing conditions to be covered and the only way to avoid many gaming the system until they get a really bad diagnosis is to mandate they pay for insurance.
    Unless we are prepared to allow hospitals to turn away the uninsured and to let seniors demand cadillac treatment to the last minute of their lives, then Congress will end up forcing insurance on everyone and will set up something resembling death panels.

  9. And they are also counting on substantial GOP support for non-denial of insurance for pre-existing conditions. A GOP congressman proudly proclaimed his support of such to me last week.

    Why should insurance be denied for pre-existing conditions. Auto, fire, and life insurance are not denied for those reasons. Why should health insurance be denied for that reason?

    1. You cannot expect insurance for a car accident or fire that has already occurred. If you have a past occurrence you can still get insured, but they will take into account your claims history when deciding your rate, and you will not get covered for the past occurrences, which is what pre-existing medical conditions are.

      I don’t know about other states, but in NY, you are only denied coverage for the pre-existing diagnoses you have (and that’s only for 11 months). All other ailments or accidents you incur after your policy inception date would be covered same as if you have no pre-existing diagnosis. And why wouldn’t you be? If you have a broken leg right now, we’re not going to give you a brand new policy and pay for that broken leg to be set, but we’ll cover the cancer you don’t have yet should you ever get cancer. Opposite is also true. If you have been previously diagnosed with cancer we’re not going to cover you for that (unless you have portability), but if you buy a policy today and break your leg next week, we’ll cover that cast you need.

      1. If you have a broken leg right now, we’re not going to give you a brand new policy and pay for that broken leg to be set, but we’ll cover the cancer you don’t have yet should you ever get cancer. Opposite is also true. If you have been previously diagnosed with cancer we’re not going to cover you for that (unless you have portability), but if you buy a policy today and break your leg next week, we’ll cover that cast you need.

        That makes sense, though it is a different game if insurance policies were required to cover broken legs.

      2. Car accidents and fires are one-off events, Nick. Most medical costs spring from chronic issues, or cannot be distinguished from them. How do you insure against diabetes or heart disease, perchance? Seriously. Tell me how you would set up such a system.

        What happens if you have heart disease, and then you get laid off. After your COBRA runs out, you are bleeped, and all but forced to do whatever it takes to get a particular kind of job that offers insurance. Vast swathes of the labor market are now off limits to you, decreasing economic efficiency enormously.

        Every other rich nation on earth has long ago figured out what you refuse to understand: insure everyone all the time. It works.

        1. How do you insure against diabetes or heart disease, perchance? Seriously. Tell me how you would set up such a system.

          Well, I’ll collect information about your family history, as well as information about your current health. Then I’ll take your age and gender, combine it with the medical information I have gathered, and determine what the probability that you will suffer a heart attack during the coverage period is. I’ll figure out how much a heart attack costs to treat, and I’ll charge you a premium that’s a little higher than the cost of treatment multiplied by the probability of suffering a heart attack.

          Next question?

          What happens if you have heart disease, and then you get laid off.

          You sever the relationship between employment and health insurance, which is an artifact of WWII wage controls, and which is the consequence of perverse tax incentives.

          1. Well, I’ll collect information about your family history, as well as information about your current health. Then I’ll take your age and gender, combine it with the medical information I have gathered, and determine what the probability that you will suffer a heart attack during the coverage period is. I’ll figure out how much a heart attack costs to treat, and I’ll charge you a premium that’s a little higher than the cost of treatment multiplied by the probability of suffering a heart attack.

            This is probably too difficult for Chad to understand- or he does not want to understand.

        2. How do you insure against diabetes or heart disease, perchance

          The ultimate chronic condition is death.

          Barring divine intervention, the dead stay dead.

          How do you insure against death?

          What happens if you have heart disease, and then you get laid off. After your COBRA runs out, you are bleeped, and all but forced to do whatever it takes to get a particular kind of job that offers insurance. Vast swathes of the labor market are now off limits to you, decreasing economic efficiency enormously.

          Just make COBRA permanent.

  10. Here is my constructive suggestion.

    Lose the mandate AND the requirement insurers cover pre-existing conditions, and replace it with a requirement that employment-based plans continue to cover treatment for an existing condition after the patient leaves the employer.

    Then make it apply retroactively to people who lost their insurance coverage after getting sick because they left their employmer.

    This would resolve the issue for 90% of the people who currently have “pre-existing conditions”. It would not apply to anyone who was uninsured and then got sick while uninsured, thus preserving the incentive to maintain proper insurance coverage before getting ill. The mandate would not longer be needed.

  11. Here is my constructive suggestion.

    Lose the mandate AND the requirement insurers cover pre-existing conditions, and replace it with a requirement that employment-based plans continue to cover treatment for an existing condition after the patient leaves the employer.

    Then make it apply retroactively to people who lost their insurance coverage after getting sick because they left their employmer.

    This would resolve the issue for 90% of the people who currently have “pre-existing conditions”. It would not apply to anyone who was uninsured and then got sick while uninsured, thus preserving the incentive to maintain proper insurance coverage before getting ill. The mandate would not longer be needed.

    Very good idea.

    Will Chony understand?

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