The time bomb in Obamacare?
This column by George Will caught my attention. Read it a few times. *ALMOST* understand it. Clarifying comments welcome!
A willow, not an oak. So said conservatives of Chief Justice John Roberts when he rescued the Affordable Care Act (ACA) — a.k.a. Obamacare — from being found unconstitutional.
But the manner in which he did this may have made the ACA unworkable, thereby putting it on a path to ultimate extinction.
…
The problems arise from the interplay of two ACA provisions — “guaranteed issue” and “community rating.”
The former forbids insurance companies from denying coverage because of a person’s preexisting health condition. The latter, says Lambert, requires insurers to price premiums “solely on the basis of age, smoker status, and geographic area, without charging higher premiums to sick people or those susceptible to sickness.”
The point of the penalty to enforce the mandate was to prevent healthy people — particularly healthy young people — from declining to purchase insurance, or dropping their insurance, which would leave an insured pool of mostly old and infirm people. This would cause the cost of insurance premiums to soar, making it more and more sensible for the healthy to pay the ACA tax, which is much less than the price of insurance.
Roberts noted that a person earning $35,000 a year would pay a $60 monthly tax and someone earning $100,000 would pay $200. But the cost of a qualifying insurance policy is projected to be $400 a month. Clearly, it would be sensible to pay $60 or $200 rather than $400, because if one becomes ill, “guaranteed issue” assures coverage and “community rating” means that one’s illness will not result in higher insurance rates.
So, Lambert says, the ACA’s penalties are too low to prod the healthy to purchase insurance, even given ACA’s subsidies for purchasers. The ACA’s authors probably understood this perverse incentive and assumed that once Congress passed the ACA with penalties low enough to be politically palatable, Congress could increase them.
But Roberts’s decision limits Congress’s latitude by holding that the small size of the penalty is part of the reason it is, for constitutional purposes, a tax.
Go read it in its entirety. A few times. What do you think?
January 19, 2013
Posted in: Uncategorized
6 Responses
Cibby - January 20, 2013
I sometimes hate to say “I told you so”, but two days after the SCOTUS ruling I began to say that Roberts had torpedoed it. I wasn’t smart enough to figure how. Almost grasp it now, but can’t help but wonder if the administration spotted the flaw in the law.
Wonder if that will do it in??
Gene E Nowak - January 20, 2013
He will just issue a Executive Order and dare the congress to oppose it. Being weak kneed and spineless individuals that have proved themselves to be it will stand and we will pay with the new taxes/penalties imposed.
The latest accommodation is the no pay if there is no budget scheme. It like all of the other accommodations to the administration will result in lost ground and bigger government payrolls.
Lynn Isler - January 20, 2013
Lambert is suggesting that Roberts is playing Chess, while the rest of us are playing checkers. When Roberts cited that the penalty was so nominal compared to the cost of private insurance, it wasn’t really going to force anyone to buy insurance anyway, I do not think Roberts was being brilliant. I think he was just suffering from the DC epidemic known as Potomac Fever. They want as many of us to opt for the penalty as possible. This is the intent of ACA, not what will kill it. They will run our ecomomy and our healthcare system into the ground in the process–also what they want. The Supreme Court justices will have access to the healthcare that other government officials and wealthy can afford. They rest of us are stuck. This is not what the authors of the constitution intended. But what does John Roberts care? He has been a media darling ever since.
Ryan Colburn - January 21, 2013
The ACA is designed to force people into the government controlled exchanges through subsidized low penalties(tax). Eventually everyone will be under the government plans because the premiums for private insurance will be too high. How can free market insurance companies compete with the government that merely prints money to cover their losses. The federal government can outlast the private sector till the only option is a single payer system. The ACA is a blatant attempt to steer not only our healthcare system but our economy away from a free market system. The ACA was not designed to be sustainable!
Hopefully folks will realize the ACA does not care about their health.
Jim Lee - January 21, 2013
The torpedo being the supposition that Congress will realize the err of their ways in pricing the penalties too low and thus increase the tax, er, I mean penalties?
Between this Congress and the current President, there seems no genuine reluctance to raising taxes. I can’t imagine they’re going to suddenly sprout a spine and brains when the left will mercilessly ridicule anyone who is against the “right to health care”…
I need to re-read Will’s remarks again to see whether there is anything upon which genuine hope for legislative repeal of Obamacare can rest. I think the only real hope is the political tsunami of nullification by the states.
But I could be wrong…
James T Sparks - January 21, 2013
I STILL THINK ROBERT’S WAS WRONG.
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