Why It's a Bad Idea to Use the Individual Mandate as a Tax-Reform Trigger


Last night's early reports that Republicans might be willing to consider a tax increase on high earners in exchange for rolling back last year's health care overhaul were unclear: Could that possibly mean repealing ObamaCare entirely? It seemed too good to be true, and it was. 

Turns out, as Mike Riggs noted this morning, that the deal was much smaller. According to The New York Times, the potential deal was for a tax-reform trigger: If the parties did not agree to a fundamental tax overhaul, the health overhaul's individual mandate to purchase health insurance would be struck down.

Repealing ObamaCare in exchange for a tax hike would be more than worth it: Tax rates come and go, but entitlements are forever. But tying tax reform to a repeal of the mandate is a bad idea. 

In the past, Republicans have toyed with the idea of repealing the mandate while leaving insurance rules that poll better in place. The mandate may be the least popular part of the health care law, but what was true then is true now: Half a repeal is no repeal at all

Simply jettisoning the mandate would be an easy way for the GOP to declare victory over ObamaCare without actually fixing it. That's because getting rid of it while leaving the bulk of the law in place isn't any kind of fix. Instead, it would create new problems, potentially leading to an insurance market meltdown as consumers game the individual market insurance rules that allow them to avoid paying for coverage until the very last minute. 

At the same time, getting rid of the mandate would reduce pressure to repeal the law in its entirety. So slicing out the mandate would leave us with the law's expensive Medicaid expansion, a host of problematic new insurance regulations at the federal level, and government-run exchanges—but with far less political pressure to repeal. The mandate remains a bad idea. But so does the rest of the law. Fixing ObamaCare means taking the whole thing down. 


NEXT: No Healthy Deals

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The mandate, as awful as it is, is absolutely necessary for the plan to “work” at all. Without it, we’ll speed along to hell that much more quickly. I think I’d be willing to accept a tax increase in exchange for eliminating ObamaCare, because at least a tax increase would be a known quantity, something that businesses could plan around and move forward in consideration of. The mess we’re in right now has paralyzed vast sections of the economy with uncertainty.

    1. You see Obamacare go, you see Obama go.

    2. Why trade something for a mandate that well may prove to be unconstitutional anyway?

      1. If only you could be so sure of that.

        1. If someone tells me that I can pay $200k for a house that may not be standing in 6 months, I’ll take a pass.

          1. Would you pay $800 for a nice house that has a 25% chance of demolition?

  2. Actually, given the current budget crisis, ObamaCare should be repealed altogether. We can’t afford it.

    1. Obama said it cuts the deficit. Are you calling him a liar?

      1. I don’t mind calling him that at all.

        1. One of my friends who still seems to support Obama said that she doens’t care that Obama is a liar because all politicians are liars.

          Can’t argue with that logic.

      2. Not that it means anything special since it just means he’s part of the ruling majority in DC.

      3. Of course that’s a ridiculous claim on its face. It amazes me what people are willing to believe.

        1. Opponents of the bill are perfectly happy using CBO estimates when it suits their own purposes.

      4. He lied about his own dying mother for Chrit’s sake.

        1. Jesus Chrit Pippie!

        2. No, I’m pretty sure she died.

  3. But maybe that’s the idea. Once the insurance market melted down, they’d have to repeal the rest of it.

    1. Yeah except they’d push for single payer as the “solution”.

      1. “Single payer” is as obnoxious a term as “net neutrality”.

        1. Let’s combine the ideas! We could achieve….


  4. Let’s all move to Texas, infiltrate the government, make it a minarchistic state, and secede. Fuck the federal titan.

    1. I thought we were all moving to New Hampshire? SPLITTER!

      1. People who try to move to New Hampshire almost always die on the trip. It’s the Mordor of the United States.

        1. Really, they should’ve picked Florida.

          1. Nobody on the east coast today wants anything to do with Florida.

    2. No pesky 1st amendment anymore… Christian sharia for freedom!

      1. That made absolutely no sense whatsoever, especially since that ha absolutely nothing whatsoever to do with anything I said.

        1. You’re saying if Texas became its own country, King Perry wouldn’t immediately enact Christian sharia?

          1. You missed the part about infiltrating the government, which would necessarily include tossing his sorry ass to the curb.

          2. “infiltrate the government, make it a minarchistic state, and secede”

      2. Given your opinion of Citizens United, you aren’t one to talk about the First Amendment, Tony.

        1. Teh corpurashuns aren’t peeple!

  5. Honestly, I want the individual mandate to go to the Supreme Court, if only for it to be struck down and the limits of the commerce clause defined.

    Of course, that plan COULD back fire horribly… but then again, so did Plessly v. Ferguson, but the SC eventually realised its mistake.

    1. “but the SC eventually realised its mistake.”

      I’m not going to live long enough, nor is the USA going to survive a mistake of that magnitude.

    2. if only for it to be struck down and the limits of the commerce clause defined

      huh? They’ve been pretty clear on this. The commerce clause does not apply to guns in school zones. Everywhere else its a grant of unlimited Federal Power.

  6. This is what Republicans do. They allow the Democrats to define the debate, put into play all their socialist bullshit. They then bark a lot about limited government and how we need cut back on the burgeoning cost of government. And then they come out and try to make a deal to cut back 1 piece.

    That’s why I gave up on them. They will NEVER eliminate SS, medicare, etc etc. They will only talk about limiited government and maybe make small cuts to it.

  7. Also, apparently, according to the NY Times, Boehner and Obama have a deal behind closed doors to do cuts first, tax reform(and increase) later .

    Honestly, I’m for it. You get cuts first, and I don’t mind tax rates effectively raised if the overall rate goes down and taxes become easier to understand. If the top rate were, say, 25%, but with no deductions, I wouldn’t mind. Actually, let me lay out my ideal tax structure:

    5%: Everyone pays at least this much, if nothing else as a sign of investment in society.

    10%: The poor/lower middle class tax rate.

    15%: The Middle Class tax rate.

    20%: The Upper Middle Class Tax rate.

    25%: The rich tax rate.

    Hell, if you really need to appease Democrats, I’ll toss this out:

    33%: The “If You earn above 10 mil. a year” tax rate.”

    And, no deductions: Just add up income from investments (let’s kill cap. gains while we’re at it), and salaries, and side businesses. Is this terribly unreasonably(drink!)? Also, do I have to hand in my libertarian card?

    1. No government has the power to tax a sovereign citizen. So they trick us into declaring ourselves to be “U.S. Citizens”, and “subject to the jurisdiction thereof”. That’s why they had to amend the Constitution to make booze illegal, but not for the war on drugs. We need to re-declare our individual sovereignty.

      1. So they trick us into declaring ourselves to be “U.S. Citizens”, and “subject to the jurisdiction thereof”.

        Maybe you shouldn’t be so easily duped.

    2. Bullshit, I propose a flat 49.5% rate in exchange for a return to 1932 levels of spending.

      1. Eliminate the income tax and return to lawful currency, gold and silver coin, and the rest will take care of itself.

  8. If the parties did not agree to a fundamental tax overhaul, the health overhaul’s individual mandate to purchase health insurance would be struck down.

    Oooo. Painful.

    Actually I think that if the mandate went, the insurance regs would have to go and everyone knows it. So I’m not too worried that the regs would stay.

    What is painful is that a substantial tax overhaul in whi ch the code gets flattened and simplified is such a desirable goal that it’s difficult to choose. The mandate might yet get struck down or weakened anyway. But the impetus to flatten the tax code is fleeting.

  9. “…it would create new problems, potentially leading to an insurance market meltdown as consumers game the individual market insurance rules that allow them to avoid paying for coverage until the very last minute.”

    So…why don’t we cross that bridge when we come to it?

    That’s the way the real world works on all kinds of things. That’s the way “starve the beast” works when you want to cut spending. The choice isn’t between cutting taxes and ballooning the deficit–when the deficit balloons, spending cuts can follow. If we waited to cut taxes until there wasn’t any more deficit, we would never cut taxes!

    That’s the way it works here too. That’s the way it works in business! You take what the market will give you! If the market will only give us a repeal of the insurance mandate now–then we take what we can get. And if that prompts a crisis–then we offer a solution to that crisis.

    If the Democrats and Progressives didn’t want there to be a crisis in case the individual mandate fell apart–then they shouldn’t have reconstructed our healthcare system based on the individual mandate.

    Now that the healthcare system has been reconstructed on the individual mandate–if we wait until the healthcare system is in such a state it won’t crater with the repeal the individual mandate?

    Then we will never get rid of the individual mandate.

    If getting rid of the individual mandate makes Congress restructure or free up the private insurance markets–then that’s not a reason to keep the individual mandate. That’s THE reason to repeal the individual mandate like yesterday.

    1. Q: Oh noes! What if the whole house of cards came crashing down?!

      A: Break out the bubbly.

      The sooner a pyramid scam crashes, the better.

  10. I would think the left would be all too happy to get rid of the mandate. It only benefits the insurance companies. They only put it in the bill to placate them.

    Without it, we’ll come that much closer to the destruction of private-market health insurance. And then we’ll have to have government health care.

    1. As a Michael Dukakis liberal eager for a single-payer system, I am salivating for a court-ordered lop-off of the individual mandate from the rest of the ACCA. Indeed, it’s the only rational way for the courts to attack the law if they are so inclined, because killing the whole law would entail admitting that the individual mandate was “necessary” for the whole interstate regulatory regime of the ACCA. Holding that the individual mandate is “necessary” to that regime, but not “proper,” would mean establishing a novel new constitutional right to be free from affirmative mandates — a slippery, open-ended new liberty interest that is likely to give the Four Horsemen pause.

    2. You need healthy people to pay in to the system for all the unhealthy people who are getting healthcare they aren’t really paying for–be it by way of not paying elevated rates for having a pre-existing condition or by just consuming more healthcare than they can pay for because they’re poor.

      The left is all about making people pay for each other. Their basic premise is that each of us individually has a responsibility to pay for the less fortunate among us.

      The individual mandate is the best thing the left has seen since “from each according to their ability and to each according to their need”.

      1. Ken, the left is hardly excited about the mandate. But those who do back it more often talk about it as something like product liability law. The idea with that is that when someone is really harmed they get a big check and the costs to the company are usually passed on to the consumers, but a little for each. Spread out it becomes bearable but all of it falling on the victim would be unbearable.

        1. The left defends the individual mandate tooth and nail–because it’s what the whole idea of ObamaCare is based on.

          If they don’t force healthy people, who are unlikely to consume healthcare, to pay into the system anyway–then there’s no one to pay for the healthcare they’re gonna give away free (or at a steep discount).

          Anybody on the left who doesn’t support the individual mandate–doesn’t understand ObamaCare.

          1. The left hates Romney, er Obamacare. Where have you been? That doesn’t mean we want to see it undone by Republican douchebags who don’t care about healthcare reform at all.

            1. This is really a stupid reason for being in favor of it you know.

      2. ” each of us individually has a responsibility to pay for the less fortunate among us.”

        The horror, the horror!

        1. “less fortunate” I love that.
          It means there are people out there that truly believe that the reason some people have more money than others is due to some divine intervention.

        2. I happen to buy into many of those responsibilities myself…voluntarily.

          Whether the government should inflict such responsibilities on the unwilling in each and every situation is another question entirely.

          …and one of those situations? Where young working poor people, who are unlikely to get sick for the time being, should be forced by the government to pay for the healthcare of other people–who make more money than they do?

          That’s one highly questionable situation.

        3. No, we don’t have such a responsibility.

      3. Ridiculous, isn’t it?

        Also, the Left wants me to pay taxes for police and stuff, so that if some moron leaves his door unlocked in the nighttime and a somebody comes in and kills his whole family, I’m on the hook for “justice.” Idiocy!

        It’s not my fault you didn’t lock your door, moron. Pay for your own damn justice!

        1. Yeah, because taxation to fund law enforcement (which pretty much everybody throughout human history has agreed is a legitimate function of government) is totally morally equivalent to taxation to fund wealth transfers like ObamaCare.

          1. You just don’t know history as it is actually written. Poverty relief was a function of government in America long before there was anything like a fulltime professional police department or a fulltime professional fire department or even a fulltime professional army.

        2. I’m not an anarchist.

          There are a few things I want the government to do. National defense and criminal justice and police are definitely on that list.

          Just to alleviate the confusion–I don’t know any libertarians who want to abolish the police.

          Seriously, it should be possible to both have a police department–and somehow keep me not responsible for paying for your healthcare.

          If you’re an armless baby or 75 and blind? I can imagine how some people could think I might be responsible for your healthcare–but I shouldn’t be responsible for paying for everyone else’s healthcare just because I was born.

          I do have an enormous number of responsibilities to other people–just ’cause I was born. But they’re all about obligations I have to respect your rights and freedoms.

          You have a responsibility to respect my rights and freedoms too! …just because you were born.

          Don’t shirk your responsibilities to me. You owe it to us to respect our freedom and our rights–and making me pay for everyone else’s healthcare is absolutely shirking your responsibilities.

          1. I’m not an anarchist (or, at least, an anarchist simpliciter) either, and there are “a few things” I want government to do, too. My list of things I want government to do is different than your list. Things I would leave entirely up to “personal responsiblity” are different than your notions.

            That’s why we have a democracy. And sometimes, you lose the argument. So don’t act like you have all the effin’ answers from on high. You have your preferences, nothing more. And your preferences are no more morally legitimate or grounded in history than mine. So quit posing like a victim or as somebody who has it all figured out. Learn a little humility and quit spouting off like a jerk.

            1. “That’s why we have a democracy.”

              Actually, my rights shouldn’t be put up to a vote. That’s why we don’t have a democracy–we have a republic.

              We fought a civil war over your idea of a “democracy”–and the bad guys were on the democracy side of that argument. Thank God your side lost the war!


              Come to think of it, Jim Crow was a function of “democracy” too, wasn’t it? How dare the North come in end segregation, when the people voted for it?! Is that what I’m supposed to think?

              How far are you willing to push this weird idea that my rights only exist so long as a majority of people don’t vote against them?

              If our rights don’t exist despite the majority of people voting against them, then they don’t really exist at all. That’s what rights are–things you have regardless of whether other people like them.

  11. Thank you for making the case-closed argument for the individual mandate under the “necessary and proper” clause.

    This is what the Libbers with their “broccoli mandate” argument never got: the ACCA was never using “interstate commerce” as a ‘jurisdictional hook’ (like “wire fraud”) or a “substantial effects” hook (like marijuana). The ACCA was always a straight-up regulation of true blue interstate commerce. And if the individual mandate is “necessary” to prevent that regulatory regime from a “meltdown,” then it is “proper.”

    There is no cognate situation in which a “broccoli mandate” would be indispensable to preventing a meltdown of an interstate regulatory regime. Yes, mandating broccoli because of broccoli’s “substantial effects” on interstate commerce, or because broccoli itself travels interstate, would be ridiculous. But that has nothing to do with the ACCA.

    The individual mandate does not now, and never has, stood in isolation as a regulation of interstate commerce. It’s “necessary and proper” connection to the ACCA (“meltdown” — your words, not mine!) is its jurisdictional legitimacy.

    1. The ACCA was always a straight-up regulation of true blue interstate commerce.

      Except for the trifling detail that there are no interstate health insurance markets.

      1. Interesting. I just looked at kp’s website and the first thing they ask is what state you’re in.


        I guess McDonalds isn’t really “interstate,” either, since each individual restaurant is a local concern.

        1. McDonalds is interstate to the extent that it conducts business across state lines (shipping ingredients and so forth). Its customer-facing activities are entirely intrastate.

          Similar for Kaiser. It does business in multiple states, but consumers buy insurance from regional subsidiaries, not across state lines. The reason for this is simple: state-level mandates have the effect of prohibiting the interstate purchase of health insurance.

          The “substantial effects” doctrine that emerged from Wickard v. Filburn is indefensible horseshit.

          1. I think that counts.

            Health insurance isn’t like home-grown weed, even if each state has its own regs. This is still core interstate commerce.

            I don’t think you can artificially break out “customer-facing-activities” as some legally cognizable separate category. Your course of business is either interstate or it’s not. You don’t bounce in-and-out of interstate commerce only at the precise moment your stuff crosses a border.

            1. You don’t bounce in-and-out of interstate commerce only at the precise moment your stuff crosses a border.

              Um, yeah, you do. The Constitution authorizes Congress to regulate interstate commerce, i.e., transactions, not interstate business concerns.

              1. So you want to substitute “transactions” for “commerce”? Consult the provisions on amending the Constitution, ’cause what you want ain’t in there now.

  12. Police Arrest Woman In Open House Jewelry Thefts

    Colorado Springs police arrested a woman Sunday on suspicion she took jewelry at open houses. Witnesses at each burglary said the suspects were driving a dark green Jeep Grand Cherokee. Officers said they used the license plate number to track down Elizabeth Craig, 42, and Sean Spears, 25.

    Craig was arrested on suspicion of theft. Spears was arrested on unrelated drug charges.

    No dogs were killed.
    Nothing else happened.


    1. I didn’t kill the guy that delivered my mail yesterday — therefore, murderers don’t exist!

      1. Such restraint. Hooray for RPA! Hooray for RPA!

  13. Why It’s a Bad Idea to Use the Individual Mandate


Please to post comments

Comments are closed.