Problem: ObamaCare's Mandate Won't Work? Solution: Make It Stronger!


Last year, ObamaCare's health insurance mandate, which requires most everyone to carry health coverage or pay a tax, survived a Supreme Court challenge when a 5-4 majority ruled it was constitutionally permissable as a tax. At the time, many of the provision's defenders argued that it was necessary in order to make ObamaCare's preexisting condition restrictions viable: With no mandate, individuals would have the option to buy coverage only when sick or in need of care. But if insurers had to sell to everyone at regulated rates regardless of health history, that would mean that people could wait until getting sick or needing care to purchase insurance. 

Now, however, it seems that some folks are worried that the mandate still won't work. They worry that the penalty it imposes is too weak, which may result in the same sort of insurance market meltdown that the mandate was supposed to prevent.

And so they want to make it stronger. Politico reports

Here's the catch: The individual mandate penalties will be pretty weak as they are phased in over two years — only $95 when they start in 2014, much less than it costs to buy insurance. And yet, everyone with pre-existing conditions will have to be accepted for coverage right away.

That's why insurance companies are telling the administration the mandate won't be enough for the first two years. They want more incentives — such as a late enrollment fee — to get healthy people to sign up quickly. Without getting the healthy folks in, the fear is that everyone's health insurance premiums could shoot through the roof when all those sick people get their coverage.

Politico reports that the idea is being called "mandate plus," and that insurers are asking for even greater penalties to inflict on those who don't get coverage. 

"The key really is, how do you get younger people to buy coverage?" said Justine Handelman, vice president for legislative and regulatory policy at the Blue Cross and Blue Shield Association. "If you can jump in and out every time you need services, costs will go up."

The mandate is the "stick" that's supposed to prevent that, by making people pay a penalty (or as the Supreme Court called it, a tax) if they don't get health coverage when they're eligible. When the mandate is at full strength in 2016, people will pay $695 or 2.5 percent of their income, whichever is greater.

But from a practical perspective, it's really not that much of a stick in the first two years. Next year, if you don't get health insurance, you'd pay $95 or 1 percent of your income — a little less than you might pay for an iPod Nano. In 2015, you'd pay $325 or 2 percent of your income.

"Certainly, we are concerned that the penalty is just $95 in the first year, which is far below the cost of coverage," Handelman said

The Obama administration isn't saying that it plans to beef up the mandate, at least not yet, but according to Politico the Department of Health and Human Services requested suggestions for expanded mandate enforcement late last year. It's a remarkable strategy, really: Fight tooth and nail to pass the mandate, knowing it won't be effective, and then use worries about its ineffectiveness as an excuse to make it stronger.