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Contrasting Obamacare’s Individual Mandate with Ryan’s Proposed Medicare Reforms

5:22 PM, May 4, 2011 • By JEFFREY H. ANDERSON
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In what could be a sign of desperation on the part of opponents of the Paul Ryan’s budget, the Washington Post’s Ezra Klein and Slate’s Simon Lazarus both argue that the House budget contains an Obamacare-like individual mandate that requires people to buy health insurance under penalty of law. The short and simple answer is: No, it doesn’t.

Paul Ryan

But Klein and Lazarus assert otherwise. They both start by conflating Ryan’s “Roadmap for America,” which also does not contain an individual mandate, with the House budget. Are Klein and Lazarus truly unaware that the Roadmap and the budget are two separate entities? In a post entitled, “The Ryan budget’s awkward embrace of the individual mandate,” Klein writes that the House budget actually contains two individual mandates. He then proceeds to describe the first: 

“If you’re an individual who’s not covered by Medicare, you’re eligible for a tax credit up to $2,300 to purchase insurance. If you don’t purchase insurance, you get nothing. So, in practice, there’s a $2,300 penalty for not purchasing insurance.  In essence, you’re giving the government $2,300, and you only get it back if you buy health-care insurance. It’s slightly more roundabout than an individual mandate, but it’s the same idea.”

By this logic, the child tax credit is likewise a federal requirement to have children. If you don’t have a child, you don’t get the tax break, and therefore you are required to have children — or so Klein’s logic would suggest. But there’s an additional problem with Klein’s argument: The House budget does not include any such $2,300 tax credit for people to purchase insurance; only the Roadmap does.

For his part, Lazarus goes so far in conflating Ryan’s Roadmap with the budget that he uses Congressional Budget Office (CBO) estimates for the former and applies them to the latter. In a post entitled, “Paul Ryan’s ‘Individual Mandate’” (subtitled, “The Ryan proposal compels Americans to buy insurance — just like ObamaCare does”), Lazarus lists the amount that seniors would receive under the Roadmap (about $6,000 for a 65-year-old and about $11,000 for the average senior) as the amount that they would receive under the House budget. 

The CBO’s actual estimates for how much seniors would receive under the budget are about $8,000 for a 65-year-old and about $15,000 for the average senior, about 33 percent higher than Lazarus claims. Lazarus also incorrectly states that this assistance would come in the form of a voucher, when, as the CBO notes, the budget would provide seniors with direct premium support, not vouchers, to help them buy private health insurance. (Neither Klein nor Lazarus notes that Ryan’s proposed Medicare reforms would not affect anyone who is currently at least 55 years of age.)

Both writers proceed to assert that these proposed Medicare reforms — which Klein also incorrectly describes as being a voucher plan — include an individual mandate because, if seniors don’t use their premium support (not correctly identified as such) to purchase health insurance, then, as Klein puts it, they “forfeit” that money. True enough. But how does that constitute an individual mandate? No one is required to do anything in this scenario. If seniors choose not to use their premium support, that’s their choice — even though it’s a choice that almost no one would likely make.

Under Obamacare, meanwhile, every man, woman, and child in America would be required to purchase government-approved health insurance (or have it purchased on their behalf), whether they want it or not, under penalty of law — and they would be fined if they don’t.

Klein and Lazarus also both neglect to note that President Obama was adamant, on national television, that Obamacare’s individual mandate in no way constitutes a tax. The overhaul’s text reflects that claim: Americans are not taxed for not buying government-approved insurance; they are fined. Now that, perhaps, is a mostly semantic distinction — although some people might still prefer to be taxed as law-abiding citizens rather than to be labeled as law-breakers and fined for their lawlessness — but it is nevertheless one that the president took great pains to make. He thought denying that the individual mandate was a tax would help him get Obamacare passed, knowing that describing it as a tax would have raised a loud outcry, given his repeated pledges not to raise middle class Americans’ taxes.  

Thus, Obama insisted that the individual mandate isn’t a tax and then promptly had his Justice Department argue that it is. Courts, however — as even Lazarus notes — haven’t bought the bait and switch. As such, Obamacare’s individual mandate will almost certainly continue to have to be constitutionally defended as an exercise of the power to regulate interstate commerce, rather than as an exercise of the power to tax. Never before has the federal government claimed a power to compel commerce, rather than merely to regulate it. But compelling commerce is exactly what the Obama administration is claiming that the government has the power to do under Obamacare.

The Ryan-authored House budget, which contains no such requirement that Americans buy health insurance or any other product or service, does not raise these types of thorny constitutional questions. The situation is quite different, however, for a 2,700-page piece of “legislation” (more like an entire legal code) that — if it’s not repealed — would take a huge step toward a full government takeover of our health care system.

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