Here’s my hypothetical question for today. The emerging party line on healthcare reform seems to be that whatever it’s failings at least the bill includes the individual mandate and that’s something to build on. Here’s the question: what if the individual mandate is struck down by the Supreme Court as unconstitutional?
Don’t consider the merits of the question. As a matter of pragmatic fact what is constitutional is whatever five members of the Supreme Court say is constitutional. Consider the implications.
As a technical matter, if the SCOTUS rules a portion of the law unconstitutional, it will consider whether the whole law should be ruled unconstitutional as well. For reasons I won’t go into, I don’t think the SCOTUS would strike down the whole law though.
My question is what good is the legislation without the individual mandate, too?
One question, I think the current proposals require an insurance policy with certain coverages and actuarial value to meet the individual mandate. Am I right?
If the individual mandate is the trigger for the types of policies that are to be issued (no exclusions for pre-existing conditions; no high deductible policies), then these changes will be meaningless. But some of the law enacts fees and taxes that would nonetheless increase premiums, and therefore a certain additional number of people and businesses will drop insurance or switch to an HDHP.
My comments are going to be contradictory. I hope that is reflective of the difficulty of the issue, and not early stage mental disease.
I hope that such a provision would be struck down. If the US government can dictate purchase of an insurance product in the name of the “public good,” which really means lower insurance premiums, then why can it not dictate consumer decisions on any number of fronts? See: fast food or alcohol purchase, the car you drive, the size of your home, your exercise habits……… Some might invoke the economist’s “externalities.’ Fair, but its Pandora’s Box. Be careful.
And yet, it simply isn’t “fair” for segments of the population to opt out of paying insurance premiums and throwing themselves at the mercy of hospitals and the premium paying public, or entering the premium paying world when convenient. Its a vexing problem.
The libertarian in me says let those who make bad decisions suffer the consequences of their decisions. However, it will never happen. When they show up at the hospital they will be taken care of. So the financial problem re: health care and health care insurance costs is unaddressed.
On balance, I’d favor striking down the mandate as unconstitutional, and wrestle with the health care/insurance cost issues in other ways. As you know, I have views on how to do that. However, none of those deal with the issue of persons opting out of the insurance system altogether. I’m currently at a loss.
To clarify, my reading of the CBO reports doesn’t appear to indicate that Congress is going to outright outlaw certain types of insurance policies. There isn’t a sentence that says no healthcare insurance policy issued in the United States shall exclude coverage due to pre-existing conditions.
However, if the market no longer contained HDHPs or policies that exclude coverage for pre-existing conditions, I think striking the individual mandate would even more severely force people to drop health care insurance — you would have a very severe adverse selection problem.
I am simply incredibly surprised that this issue (the MANDATE) has not fully been raised, by the media, even by the Journal etc. I think possibly cause it is not considered ‘politically correct’…to point out a major flaw as to why this whole effort SHOULD go down in flames? Why is it, that for the first time, I see the madate/ mentioned, with all its implications, in a timid post on a blog? In fact how can a mandate from our government, affecting all of its citizens, demanding that its citizens buy a product, forcing us into a behavior that many don’t want to do or are doing already Voluntarily, BE LEGAL ?
And if this current effort at reform is shut down, I really don’t think it is a blueprint for a future ‘torpedoing’ of any new effort. Everyone recognizes the need for some kind of change…I think that is incontrovertible. Just please, not a MANDATE.
To risk challenges in the Supreme court; what a nasty, nasty mess that portends. The country will really split into a pile of shards with such a development!
And lets be quite clear, while externalities are often a necessary condition for government intervention they are rarely considered sufficient by most economist save the extremely authoritarian. And even if there is sufficient reason for government intervention the number of policies is not limited to direct comand-and-control methods (hello Soviet Union economic system…that worked oh so well). There are taxes/subsidies for one (yes subsidies, some externalities are positive…i.e. good and we want more of it). Also, cap-and-trade is another option.
As for your question Dave, I think it would make the whole bill completely useless. This is the only “good point” that guys like Alex Knapp (hopefully he’ll comment here) hang their hat on: It will increase coverage. However, without a mandate it is not clear that it will do so in which case the last reason for supporting the bill goes down the crapper…which is where this bill should go anyways.
Are these mutually exclusive? 😉
It looks to me like the Reid plan has elements of both things I mentioned. On the day the bill is signed certain low cost insurance plans are going to be illegal (policies with annual limits on coverage; group plans with different levels of affordability). Also, taxes on certain HSA distributions would appear to make high deductible plans less desirable. So, if the individual mandate is outlawed, these options won’t be there once choice is restored.
Mostly though it appears the architecture of the plan stems off of what the government decides are qualified health plans. These are high cost plans; they are what the individual was mandated to get, but they are also subsidized. So, once the mandate is removed enrollment in qualified plans will be based on simple cost/benefit analysis. As I understand the main subsidies, they act act a price ceiling at various income levels. So, even if the lack of an individual mandate greatly increases costs, these aren’t borne by the individual, but the government. People below 400% poverty or uninsurable in the regular market would be interested in keeping this insurance.
However, the subsidies appear to be tax credits. So you have to assume that a lot of people would not be able (or at least be very reluctant) to pay for high cost insurance with the expectation of a tax refund next year. The program starts to look like one for a small slice of high risk insureds. The government is going to be paying a lot more to do less than it wanted. And without lower cost insurance options, people on the margins will become uninsured.
They’ll fix it through the tax law if it’s unconstitutional. Raise taxes on the first $8500 of income to equal the fine for not acquiring health care insurance, then offer a tax credit in that amount if you have health insurance.
While they probably can, they wont.
I can see the Republican campaign spin now: a tax increase on the lowest income brackets. Can’t afford insurance and you’ll get your taxes increased!!!
Nope, not going to go work, IMO.
“My question is what good is the legislation without the individual mandate, too?”
Well, obviously, not very good re the problem the mandate is supposed to address (which I think Drew gets at above). But that’s not the sum of the bill. There are still the provisions against denial of coverage, cancellation of coverage, and so on, right? Unless we think those provisions alike would go down if SCOTUS scuttles (scotlles?) the mandate.
“Are these mutually exclusive?”
When I was young, virile and cocksure about everything, I could answer that. Now? I dunno. 😉