ACA/Obamacare: Unconstitutional Without the Repealed Mandate?

'A coalition of 20 U.S. states sued the federal government on Monday over Obamacare, claiming the law was no longer constitutional after the repeal last year of its requirement that people have health insurance or pay a fine.

Led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, the lawsuit said that without the individual mandate, which was eliminated as part of the Republican tax law signed by President Donald Trump in December, Obamacare was unlawful.

“The U.S. Supreme Court already admitted that an individual mandate without a tax penalty is unconstitutional,” Paxton said in a statement.“With no remaining legitimate basis for the law, it is time that Americans are finally free from the stranglehold of Obamacare, once and for all,” he said.' Twenty States Sue the Federal Government Seeking to End Obamacare, Reuters, 02.26/2018

Link to the entire article appears below:

https://www.reuters.com/article/us-usa-healthcare/twenty-states-sue-federal-government-seeking-end-to-obamacare-idUSKCN1GB06R

ACA/Obamacare: Eliminating the Individual Mandate

“There are powerful reasons to kill ObamaCare's individual mandate to buy health insurance. This regressive tax has fallen primarily on modest earners who face a choice of paying a fine or buying the cheapest $7,000-deductible plan, which may be of little use until long after their finances are in distress.

Yet how the individual mandate is eliminated makes all the difference in the world. If done while easing up on ObamaCare's counterproductive rules — from the employer mandate to coverage options that have led just as many people to leave subsidies on the table as to claim them — getting rid of the mandate could facilitate a big step toward universal coverage.

But getting rid of the mandate in the way Republicans propose, as a $300 billion pay-for that will help keep the cost of tax legislation under the $1.5 trillion maximum allowed under Senate rules, would not only ensure that millions of people drop their insurance on top of the 28 million already uninsured, but it would deepen already-daunting fiscal challenges and seriously undermine any hope of fixing our troubled individual insurance market for the foreseeable future.

Understanding the true impact of repealing the individual mandate is necessary for making sense of the Joint Committee on Taxation's official score of the Senate tax legislation. Because millions of individuals would give up their health insurance tax subsidies, JCT found that households earning up to $40,000 a year would face an ever-larger tax hike equal to $6.4 billion in 2021 alone (or a $4.4 billion tax hike once the effect of the corporate tax cut is considered).

Republicans say, in essence, "No harm, no foul." If people are voluntarily dropping coverage, that hardly amounts to a tax increase. Yet the GOP argument that people would be giving up coverage they don't want, while technically true, depends on a flawed presumption that all those millions of people with modest incomes would reject health insurance, not because of a lack of affordability, but because they would prefer to be uninsured.

Just consider a scenario in which people were able to use their available health insurance subsidy to cover the full cost of a high-deductible or catastrophic health insurance policy and have at least $200 left over for a Health Savings Account deposit — $100 of which could be cashed out if left unspent at year end.

If there were this kind of flexible option that included free cash on the table, the word would get out and there likely wouldn't even be any need for advertising to get close to 100% enrollment among the subsidy-eligible group.

While this hypothetical isn't necessarily an ideal model, it is eminently possible to combine the health care security Democrats insist upon with the freedom that Republicans believe in, killing the mandate while dramatically reducing premiums and continuing to provide moderate-income households ample reason to get covered instead of rolling the dice.

The key point is that every dollar of the projected savings from killing the individual mandate depends on keeping ObamaCare just as consumer unfriendly as it was in 2017. In other words, taking those savings – all that extra tax revenue lying around because even more people leave their health insurance tax credits unclaimed — and applying it to tax cuts means that a significant chunk of the funding now available for health insurance premium tax credits will essentially disappear, all but ruling out consumer-friendly and coverage-increasing reforms of the ACA in a fiscally fraught future.” - The Right Way To Kill ObamaCare's Individual Mandate, Investor’s Business Daily, 11/28/2017

Link to the entire article appears below:

https://www.investors.com/politics/policy-analysis/the-right-way-to-kill-obamacares-individual-mandate/

Note: Yet another interesting demand-side argument. However, “affordability” of healthcare and hence the price of health insurance is a supply-side and demand-side phenomena. Moreover, health insurance price is, in the main and upon normal occasion, a reflection of the price to supply healthcare. The constant stream of demand-side arguments is going to do little to affect the supply-side price. More importantly, the supply-side price is not strictly a result of market forces as much as it is a function of special interest legislation and certificate of need (CON) legislation providing the conduit of distorted price and limited competition that the providers within the greater supply-side enjoy at the expense of the consumer of healthcare.

What is the “Skinny Repeal” of ACA/Obamacare?

“There is an alternative, if not a very satisfying one. Republicans seem to be able to achieve near-unity on ending the individual mandate, allowing insurers to offer discounts for younger people, protecting taxpayers from having to subsidize abortion coverage, and giving states some freedom to relax regulations. They should work for legislation that achieves these goals and includes as much Medicaid reform as 50 senators are prepared to tolerate.

 Republicans should not claim that such legislation would repeal and replace Obamacare, since it would not, and should make it clear that additional legislation will be needed in the future. The conservative holdouts should be prepared to judge this limited legislation based on whether it gives people more freedom to choose the health insurance they want, not on whether it does everything for which Republicans have been campaigning over the last seven years.” - Don’t Settle for Nothing, National Review, 07/18/2017

Link to the entire article appears below:

http://www.nationalreview.com/article/449616/republican-health-care-bill-fails-obamacare-repeal-mitch-mcconnell

ACA/Obamacare: The Beginning of the End

‘Hours after taking the oath of office, President Donald Trump followed up on his campaign pledge to try to start chipping away at Obamacare, and curb federal regulations.

Trump signed an executive order on Friday evening from the Oval Office “to ease the burden of Obamacare as we transition to repeal and replace,” White House press secretary Sean Spicer told reporters Friday.’

‘“Potentially the biggest effect of this order could be widespread waivers from the individual mandate,” Larry Levitt, a senior vice president at the Kaiser Family Foundation, told The Washington Post. Currently, individuals who do not have health insurance and do not qualify for an exemption must pay a $695 annual fee or up to 2.5 percent of annual household income.

“They’re very aware of the fact that the first job is to prevent the Affordable Care Act from doing more damage than it’s already done,” says Ed Haislmaier, a senior research fellow in health care policy at The Heritage Foundation. “As we saw with the premium increases in the fall, people who are buying individual or small employer coverage without a subsidy are getting hammered.”’ - Trump Signs Executive Order Curbing Obamacare, daily signal.com, 01/20/2017

Link to the entire article appears below:

http://dailysignal.com/2017/01/20/trump-signs-executive-order-curbing-obamacare/?utm_source=TDS_Email&utm_medium=email&utm_campaign=Top5&mkt_tok=eyJpIjoiWkdVM00yUXpNbVUwT0RZNSIsInQiOiJ6REZKMWNcLytNMm8zc2lXa29kMXdcL1NRYXVGbVQ5RGtpdGxcL3p3d1JPc1ZyRkpQcUw1RE4welB5bVZMS2tQUkU3Y01hUzRseVhBSVRDYUpkNjlOUTZkU2N5eXZXVjNkSUVmOXg3YXdwbFc0SFwvRUpoWk9OcEtGN3VDVlVuaFNicHhtWDIyY2tiMjBCbG84MnBacjBUUEF3PT0ifQ%3D%3D

ACA/Obamacare: Repeal via the Legislative Tool Known as “Reconciliation”

‘Now, following Trump’s defeat of Democratic presidential nominee Hillary Clinton, Republicans are laying the groundwork for dismantling the Affordable Care Act next year.

“I don’t think it’s going to be a sentence-per-sentence destruction of the bill, but I do think that substantial chunks of it are in really grave danger,” Seth Chandler, a visiting scholar at George Mason University’s Mercatus Center and a professor at the University of Houston Law Center, told The Daily Signal.

Republicans need 60 votes in the Senate to pass a bill repealing the health care law and would fall short of that threshold in the new Congress, where the GOP will hold at least 52 seats.

But GOP lawmakers are likely to use a budget tool called reconciliation—a procedure used in the Senate that allows a bill to pass with 51 votes—to roll back key provisions of Obamacare and avoid a Democratic filibuster.

The GOP-led House and Senate passed a budget resolution last year that included instructions to use reconciliation to repeal Obamacare and were ultimately successful in getting it to Obama’s desk, where it was vetoed.

The bill called for the repeal of the individual and employer mandates, Medicaid expansion, tax credits, medical device tax, and Cadillac tax. It also stripped the government of its authority to run the exchanges set up under the law and lessened the fine for failing to comply with the mandates to $0, which was needed to abide by Senate rules.

GOP leaders in the House and Senate haven’t committed to using reconciliation again next year to dismantle the Affordable Care Act, but House Speaker Paul Ryan said Wednesday the law is “collapsing under its own weight.”

“This Congress, this House majority, this Senate majority has already demonstrated and proven we’re able to pass legislation and put it on the president’s desk,” Ryan, R-Wis., said during a press conference. “Problem is, President Obama vetoed it. Now, we have a President Trump who has promised to fix this.”’ - How Republicans Can Start to Dismantle Obamacare With a Trump Presidency, dailysignal.com, 11/09/2016

　

Link to the entire article appears below:

http://dailysignal.com/2016/11/09/how-republicans-can-start-to-dismantle-obamacare-with-a-trump-presidency/?utm_source=TDS_Email&utm_medium=email&utm_campaign=MorningBell&mkt_tok=eyJpIjoiWkRabFlXWXdOV1F5WXpGaiIsInQiOiJZeEkyQ1RhanVSOWMyWTlKTmRPTXEzbTg0RXRFM1daZU5LcFFoK3JPK090cG5UVmNYWjhIQ3FvZUJpc2NJK1ZRMStqT0xjM1FHSlhCU3lVRWQ4TGJHOWJiNTloajdPVlpwaytyOGhXYUZDQT0ifQ%3D%3D


　


　

ACA/Obamacare Exemption Number Fourteen. True or False?

“Republican leaders are making preposterous assertions that President Obama has abandoned a centerpiece of his health care reforms — the requirement that most people obtain comprehensive health insurance or pay a penalty.

In a cartoonish misrepresentation of how so-called hardship exemptions will be determined, the leaders, egged on by their allies in the conservative media, contend that recent steps by the Obama administration under-mine the individual mandate by giving virtually everyone who wants one a free pass to escape the penalty.

These steps are modest midcourse corrections to deal with individual problems in the rollout of a large and complex program. As long as the state and federal officials in charge proceed judiciously, the public will benefit.

The Republicans note, correctly, that some people may qualify for an exemption if their insurance was canceled and they can’t find affordable plans in the insurance market-places. But it’s not enough for applicants to simply say they cannot find an affordable policy; getting an exemption requires them to jump through all sorts of hoops.

Besides submitting a copy of the cancellation notice, applicants must fill out a nine-page form, under penalty of perjury, that requires information for everyone in the family about income, employment and any job-related health insurance. In addition, there is no certainty that an application will be approved. That judgment of the applications will be made by the federal and state officials who run the marketplaces. We hope and expect that they will award exemptions judiciously, rejecting applicants who make willful efforts to evade the law and approving those who made good faith efforts to find affordable health insurance policies.

Republicans also point to a catchall category that says that people may be eligible for an exemption if they “experienced another hardship in obtaining health insurance,” such as, perhaps, difficulty completing enrollment through balky websites.

They must submit documentation “if possible.” But applicants who fail to document their case will only weaken their chances of getting an exemption. As always, the insurance exchange officials will make the final judgment and, we assume, reject specious claims.”
- Health Care Caricature, New York Times, Editorial Board, 03/22/2014 (1)

　
One must ask oneself: Is it indeed a caricature or is the assertion by Republicans accurate?

To figure out the competing views one first needs to review a recent Wall Street Journal article: ObamaCare's Secret Mandate Exemption HHS quietly repeals the individual purchase rule for two more years, Wall Street Journal, 03/12/2014. Link to article appears directly below:


　
http://online.wsj.com/news/articles/SB10001424052702304250204579433312607325596#printMode


　
Within the Wall Street Journal article appears this passage:

“This lax standard—no formula or hard test beyond a person's belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that "you experienced another hardship in obtaining health insurance," which only requires "documentation if possible." And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.”
　

Looking into the passage above requires the following steps:

(1) Department Of Health & Human Services, 12/19/2013

Options Available for Consumers with Cancelled Policies

http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/cancellation-consumer-options-12-19-2013.pdf



(1a) Scroll down to “hardship exemption form” and click the hyper link which leads you to…….


　
(2) Hardship Categories and Documentation

　

http://marketplace.cms.gov/getofficialresources/publications-and-articles/hardship-exemption.pdf


　
(2a) Now scroll down the form to hardship category #14. The fourteenth exemption category reads as follows: “You experienced another hardship in obtaining health insurance”. The required documentation for this particular hardship is described as: “Please submit documentation if possible.”

　
If one views individuals as intelligent, self-interested and very creative it is not hard to conceive hardship case #14 being utilized to a great degree. Further, as exemption #14 becomes more widely disseminated information among individuals hardship case #14 will likely be utilized in a fashion of increasing at an increasing rate.

Caricature or real information that can be utilized? Looks pretty real.


Notes:

(1) Health Care Caricature, New York Times, Editorial Board, 03/21/2014

http://www.nytimes.com/2014/03/22/opinion/health-care-caricature.html?hp&rref=opinion&_r=0


　

ACA Individual Mandate: You Don’t Need No Stinking Mandate! Just Opt Out! No Way! Way!

 “ObamaCare's implementers continue to roam the battlefield and shoot their own wounded, and the latest casualty is the core of the Affordable Care Act—the individual mandate. To wit, last week the Administration quietly excused millions of people from the requirement to purchase health insurance or else pay a tax penalty.

This latest political reconstruction has received zero media notice, and the Health and Human Services Department didn't think the details were worth discussing in a conference call, press materials or fact sheet. Instead, the mandate suspension was buried in an unrelated rule that was meant to preserve some health plans that don't comply with ObamaCare benefit and redistribution mandates. Our sources only noticed the change this week.

That seven-page technical bulletin includes a paragraph and footnote that casually mention that a rule in a separate December 2013 bulletin would be extended for two more years, until 2016. Lo and behold, it turns out this second rule, which was supposed to last for only a year, allows Americans whose coverage was cancelled to opt out of the mandate altogether.


In 2013, HHS decided that ObamaCare's wave of policy terminations qualified as a "hardship" that entitled people to a special type of coverage designed for people under age 30 or a mandate exemption. HHS originally defined and reserved hardship exemptions for the truly down and out such as battered women, the evicted and bankrupts.

But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you "believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy" or "you consider other available policies unaffordable."

This lax standard—no formula or hard test beyond a person's belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that "you experienced another hardship in obtaining health insurance," which only requires "documentation if possible." And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.” - ObamaCare's Secret Mandate Exemption HHS quietly repeals the individual purchase rule for two more years, Wall Street Journal, 03/12/2014

Link to the entire article appears below:


　
http://online.wsj.com/news/articles/SB10001424052702304250204579433312607325596#printMode


Update: Psst! Obamacare Mandate Delayed Again — Quietly. newsmax.com, 03/12/2014


　http://www.newsmax.com/Newsfront/Obamacare-mandate-delay-2016/2014/03/12/id/559228/?ns_mail_uid=11826812&ns_mail_job=1559875_03132014&promo_code=16C52-1

ACA: One Branch Government and a Chart of Its Unilateral Path

Jon Stewart Interviews Kathleen Sebelius about Obamacare: “well, maybe she’s just lying to me.”

"Health and Human Services Secretary Kathleen Sebelius likely thought her interview with Jon Stewart on “The Daily Show” Monday night would be an easy setting to pitch the Obamacare exchanges to young people. Instead, she ended up getting accused of being a liar by the popular comedy host.

During his interview with Sebelius, Stewart repeatedly sought an answer from the secretary on why big businesses got a delay in their Obamacare mandate to provide affordable health insurance to their employees, while individuals did not get a delay in their Obamacare mandate making them purchase health care or face a penalty.

In a rare monologue at the end of the show, Stewart said he remained confused and that he suspected that the secretary may have been lying to him." - Jon Stewart accuses Kathleen Sebelius of lying to him about Obamacare, The Daily Caller, 10/08/2013


Link to the entire article appears below:

http://dailycaller.com/2013/10/08/jon-stewart-accuses-kathleen-sebelius-of-lying-to-him-about-obamacare/

ACA: When a Mandate is Not a Mandate due to Mandated Omission

“In a speech at a Maryland community college last week promoting his namesake health reform law, President Obama mentioned the word "benefits" 10 times.

Free preventive care, coverage for children up to age 26, a better drug plan for seniors. "We're giving more benefits and protections," he said.

But there was one word Obama didn't mention once in his entire 51-minute talk. And that word was "mandate."


That's despite the fact that a central feature of ObamaCare is the requirement that all those adoring young people buy insurance or pay a fine, and is the key to whatever chances of success it has.


Mum On Mandate

Obama's silence about the mandate wasn't some aberration. He rarely brings the subject up when he talks about ObamaCare. Nor do other administration officials.

Nor do the $700 million worth of federal, state or private promotional campaigns now getting under way as the ObamaCare insurance exchanges open their doors for the first time. Some examples:

A 2-minute, 48-second-long video produced by the White House — which deputy senior adviser David Simas says "unpacks the law, piece by piece, in an incredibly simple way" — never once mentions the individual mandate.

On a Health and Human Services Web page devoted to the "Key Features" of ObamaCare, the mandate is buried at the bottom of a long list, and then referred to vaguely as "Promoting Individual Responsibility."

An ad produced by Obama's campaign spinoff group — Organizing for Action — talks about the rebate a family got, with the wife proclaiming that "the law works." There's no mention of the mandate.

A promotional website sponsored by Walgreen (WAG) and Blue Cross & Blue Shield highlights four things people need to know about the ObamaCare. None of them includes an explanation of the mandate.

A new pro-ObamaCare video from Funny or Die studios shows people getting injured in cringe-inducing ways to encourage young people to sign up, without talking about their requirement under the law to do so.” - The One Word Missing From All Those ObamaCare Ads, Investor’s Business Daily, 09/30/2013

Link to the entire article appears below:

http://news.investors.com/politics-obamacare/093013-673087-individual-mandate-missing-from-obamacare-ads.htm



　

　

Beyond the Individual Mandate: The Ongoing Legal Challenges to Obamacare - CATO, 02/07/2013

Obamacare “Tax”: How Roberts “Tax” Dooms Obamacare

One of the talking points in the political promotion of the Affordable Care Act (ACA) also known as Obamacare was the attempt to provide health insurance to the vast majority of the estimated 45 million uninsured Americans. Arguments about the ability of an overburdened health-care system to absorb upwards of 45 million more potential patients is a particularly interesting argument. The specter of rationing when price is eliminated as the rationing agent [price fixing scheme of Obamacare and the subsequent outcomes of price fixing schemes] and other arguments regarding the scheme’s viability and implementation are very valid arguments regarding the absorption of upward of 45 million new participants.
 

However, will in fact upward of 45 million people become insured or will the number be much, much smaller?


Putting aside arguments that the current number of insured(s) may actually fall and concentrating on the potential 45 million additional insured(s), will in fact the 45 million become a much, much smaller number than anticipated due to the “penalty” of the individual mandate being depicted as a “tax” by SCOTUS?



Thomas Lambert, law professor from the University of Missouri in an assay entitled How the Supreme Court Doomed the ACA to Failure explains at length why the Obamacare fine/penalty/tax is much more rational to pay than acquiring coverage. That is, Lambert puts forth the formula of rationally paying the tax and acquiring coverage only when a sickness, illness or accident manifests itself and/or occurs.


More importantly Lambert explains the reasoning behind Justice Roberts conclusion that the penalty was a tax and how the tax has to be relatively small in size (not punitive) and how the tax must remain the same amount adjusted for inflation. That is, the “tax” can not be increased per the Roberts decision except via an inflation adjustment which means the tax remains relative in size to the inflation adjusted Obamacare insurance premium. Therefore, the tax remains relative and hence it will always be rational to follow the Lambert formula of paying the tax and acquiring coverage only as needed. The only exception to the formula is if health-care prices fall, but Obamacare does precious little to address the underlying health-care price.


Lambert also points out that the framers/promoters of ACA likely figured they, in the future, could increase the penalty/tax via congress. Problem is the same framers/promoters never figured on the individual mandate and associated penalty being framed constitutional via a “tax” argument and hence made no process arrangements for raising the penalty aka “tax”. Hence no mechanism exists in ACA to raise the tax as that was something the framers/promoters would have gotten around to later but now can not make any changes at all due to Roberts decision and the requirement that the tax can not change except adjustments for inflation. Ops!


With the formula in hand and with the rational response being to pay the fine and acquire coverage when necessary, anti-selection sets in, in a big way, with only older and infirmed individuals buying coverage which means health insurance premiums skyrocket. Given the Lambert formula via the tax depiction by Roberts, the mantra of upwards of 45 million new insured(s) fizzles.


Thomas Lambert’s entire essay can be found in the link below:



www.cato.org/…s/files/regulation/2013/1/v35n4-5.pdf

Krugman’s Table D'Hote: Delusive Broccoli

“Why? When people choose not to buy broccoli, they don’t make broccoli unavailable to those who want it. But when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain. As a result, unregulated health insurance basically doesn’t work, and never has.

There are at least two ways to address this reality — which is, by the way, very much an issue involving interstate commerce, and hence a valid federal concern. One is to tax everyone — healthy and sick alike — and use the money raised to provide health coverage. That’s what Medicare and Medicaid do. The other is to require that everyone buy insurance, while aiding those for whom this is a financial hardship.” - Broccoli and Bad Faith, Paul Krugman, 03/29/2012, New York Times


One might want to examine the following statement more closely:


“But when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain. As a result, unregulated health insurance basically doesn’t work, and never has.”

Krugman’s statement is backwards. Krugman is substituting the concept of mandate for the concepts of the pre-existing condition clause and the risk selection process [underwriting the risk]. Stated alternatively, Krugman is stating that without a mandate the risk pool [collection of underlying risks] deteriorates when people don’t buy health insurance until they get sick when in fact the collection of underlying risks remains unchanged as anti-selection is avoided by a pre-existing condition clause and risk selection aka underwriting the risk. That is to say, in order for Krugman’s statement to be correct if would have to be written as: …..in the absence of a pre-existing condition clause and medical underwriting, anti-selection occurs hence driving up the price to insure the underlying collection of risks.

The next question is how in the world does private insurance work well without a mandate? According to Krugman  "in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive" however no such mandate exists in life insurance and that particular private insurance program works well. What about private property that is insured without mandate? That insurance program works well. What about pet health insurance? No mandate and the plan works. Hence putting forth "mandates" and asserting "worsening of the risk pool" concluded by "makes insurance more expensive" is a sweeping fallacious statement.

Looking at Krugman’s statement from another angle, its actually the “mandate” in conjunction with the elimination of pre-existing condition clause and the elimination of underwriting that makes the underlying collection of risk characteristics deteriorate. How so? If all comers are insured, as Krugman suggests in the following statement “The other is to require that everyone buy insurance, while aiding those for whom this is a financial hardship“ then he is making the implicit assumption and explicit assumption based on his prior statement of “…..don’t buy health insurance until they get sick” as he assumes all comers are healthy and totally insurable as they are purchasing insurance before they are sick. Nay, nay! The collection of all comers would be made up of some healthy, some healthy but with penned up demand for health maintenance, some unhealthy with acute problems and some unhealthy with chronic problems. Hence the assumption Krugman makes is that the healthy comers somehow, someway outweigh the unhealthy comers in the area of cost and by some magical pixie dust phenomena known as “insurance” the risk characteristic and associated cost disappears.


Examining Krugman’s other statement:

　

“There are at least two ways to address this reality — which is, by the way, very much an issue involving interstate commerce, and hence a valid federal concern. One is to tax everyone — healthy and sick alike — and use the money raised to provide health coverage. That’s what Medicare and Medicaid do. The other is to require that everyone buy insurance, while aiding those for whom this is a financial hardship.”

Krugman yet again substitutes concepts. Krugman substitutes a social insurance [social welfare plan] concept/argument for a private welfare plan [private insurance] concept/argument. What Krugman is stating, in effect, is that the entire field of insurance, both private and public, is based upon social insurance concepts which is fallacious. Moreover, he fails to tell the reader that “tax” and more succinctly escalating tax over time, in social insurance [social welfare plans] is a substitute for “reserve” in private insurance [private welfare plans]. That is, in a private insurance plan adequate premium supports reserves that are in anticipation of future losses. In most social insurance schemes, no reserve exists for future losses [does the phrase “unfunded future liability” ring a bell?] hence the private insurance “reserve” for future losses becomes escalating tax over time in social insurance schemes as no reserve exists hence increasing taxes function to pay for unfunded future losses [fund future losses = increasing tax].

One can only surmise that there is economist Krugman, then there is Mr. Krugman, and finally there is columnist Krugman.

ObamaCare: The Individual Mandate

ObamaCare hinges upon the individual mandate. The mandate is the legal requirement of every American to obtain health insurance coverage that meets the government's "minimum essential coverage". The problem is that the U.S. Constitution, established long before any living legislator voted to pass ObamaCare, does not require individual citizens to purchase any particular good or service. (1)

Besides a certain group of legislators somehow having "special knowledge" enabling them to pick and choose a particular good or service for individual citizens, let us investigate the individual citizen's failure to meet the mandate. We have heard of the fine but exactly who is at risk of being fined? What exactly is the fine?


Who is at risk of being fined by ObamaCare?

If you do not receive coverage through a government sponsored program, or your employer does not offer coverage, or some other group sponsored setting (e.g. union, association, etc.), then you must buy coverage. Failure to buy coverage results in a fine. (2)


What exactly is the ObamaCare fine?

In 2014 the fines begins at $95 or 1% in annual income which ever is the greater. In 2015 the fine become 2% of annual income or $325 which ever is greater. In 2016 and later the fine becomes $695 or 2.5% of income . (3)

What about families? An ObamaCare fine-formula exists for families. The formula is as follows:

Family fine formula: (uninsured adult = 1 fine unit) + { uninsured children = 1/2 fine unit) x $695 = ObamaCare fine.

Plugging a family of four into the above formula, in the year 2016, the family would pay an ObamaCare fine of $2,085. The fine is prorated if you, your spouse, or children were covered for a number of months during the year e.g. covered for three months means 3/12 x $695 times number of fine units. (4)

There is an exemption. Apparently, those between some slim line, the line of qualifying for government sponsored health-care and the line of income inability to buy "essential coverage" receive an exemption from the ObamaCare fine. The exemption is: an exemption income threshold will be applied (yet unknown) by the secretary of Health and Human Resources. Presumably the poverty level threshold will be applied.

What might surprise you is that ObamaCare has already calculated the total fine that will enter government coffers. According to the Congressional Budget Office (CBO), ObamaCare expects $17 billion in ObamaCare fines in 2019. (5)


Notes:

(1)http://politifi.com/news/Federal-judge-denies-Holder-request-to-dismiss-Obamacare-constitutionality-challenge-UPDATE-Cuccinelli-reacts-992678.html


(2) Bad Medicine, A Guide to the Real Costs and Consequences of the New Health Care Law, Michael D. Tanner, Cato Institute, page 2.


(3) Ibid.


(4)Patient Protection and Affordable Care Act, public law 111-148, subtitle F, part 1, section 1501.


(5) March 20. 2010, director of the Congressional Budget Office, Douglas Elmendorf, in a letter to House speaker Nancy Pelosi .