Saturday, June 30, 2012

The Real Insurance Mandate Problem

    During the lead up to the Supreme Court's consideration of ObamaCare, we were told over and over again, "Of course the government can require people to buy insurance.  Look at auto insurance!  No one disputes that the government can require that." (I find the comparison silly - auto insurance is only needed if one drives, and it's primarily to cover other drivers, not the one who owns the policy.)  But where does the auto insurance comparison logically lead based on Thursday's decision?  From page 4 of the opinion:
[T]he mandate need not be read to declare that failing to [purchase ... health insurance] is unlawful. Neither the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. And Congress’s choice of language—stating that individuals “shall” obtain insurance or pay a “penalty”—does not require reading §5000A as punishing unlawful conduct. It may also be read as imposing a tax on those who go without insurance. (see also)
Is this anything like the penalty (or "tax" as we now call it) for driving without auto insurance? Hardly, according to this Fox Business News article.  The laws vary from state to state, but those penalties can be quite severe.  Roberts's opinion actually comments on the relative leniency of the penalty as working in ObamaCare's favor in his decision to uphold.  Roberts also noted that the ACA restricted the IRS's power to even collect the penalty/tax:
The Act ... bars the IRS from using several of its nor­mal enforcement tools, such as criminal prosecutions and levies... And some individuals who are sub­ject to the mandate are nonetheless exempt from the penalty—for example, those with income below a certain threshold and members of Indian tribes. (page 8)
So is there really a meaningful individual mandate?  Or has it been more of a suggestion all along as I wrote earlier?  How is the IRS ever going to collect this penalty/tax without threat of "prosecutions and levies"?  As the Fox Business article I referenced above notes, even with more severe penalties for not having auto insurance (which is much cheaper than health insurance,) up to a quarter of drivers in some states do not carry it anyway.
    The real problem with mandates is not the individual mandate, but rather the mandates that the federal and state governments have placed on the insurance companies.  Insurance companies that lack the freedom to consider pre-existing conditions, health history, and determine what they will and will not cover are not "insurance" companies at all, but simply inefficient, unnecessary money conduits.  Frankly, they are irrelevant. The same outcome could be achieved by eliminating insurance companies altogether and requiring all healthcare providers to provide all services for a set monthly fee regardless of how little or how much care patients required.  But it has always been easier to paint insurance companies as greedy and evil than it has been to characterize doctors that way, and liberals need an enemy to push their policies.  That is why, barring repeal of ObamaCare and serious, comprehensive state-level insurance reform, it is the insurance company mandates that will eventually bring down the system and lead to the single-payer system that Barack Obama and many liberals have wanted all along.  

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