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.
