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Taking Aim at Obamacare’s Coercive Core

10:24 AM, Sep 28, 2013 • By JEFFREY H. ANDERSON
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The CBO estimates that, in 2014, the combination of Obamacare’s taxpayer-subsidized exchanges (7 million additional insured) and changes in sales through the non-group market (2 million fewer insured) would result in 5 million additional people buying insurance.  But the CBO has also estimated that, without the individual mandate, about 40 percent of those people (2 million of 5 million) would take a pass.  In other words, an estimated 40 percent of the newly sold insurance would be attributable to federal coercion.

Indeed, the Obama administration has consistently argued that, without the individual mandate, Obamacare’s “comprehensive” architecture would collapse.  Obama loves the “guaranteed issue” and “community ratings” parts of Obamacare, which together force insurers to cover all comers at essentially the same price (subject only to limited variations), regardless of their health status and hence how much it will actually cost to cover them.  Yet he nevertheless had his administration argue before the Supreme Court that, should the Court strike down the individual mandate as unconstitutional (as four justices thought the Constitution required), it should also strike down these other two provisions.  If the administration had really thought Obamacare would work without the individual mandate, it wouldn’t have been willing to sacrifice these other two provisions that Obama holds dear.

In truth, the administration is deeply concerned about getting people to buy insurance through Obamacare’s government marketplaces even with the mandate in effect.  At an Obamacare event a few days ago, both Obama and Bill Clinton kept pleading with people to sign up to buy their mandatory insurance.  Clinton said that Obamacare “only works, for example, if young people show up.”  Obama said that we need to have “those of us who are healthy subsidize somebody who is sick.”  (Quite a sales pitch, eh?  You can see why they need the mandate.)  Clinton’s very last words at the event were, “[W]e’ve got to get everybody to sign up.”  Aside from “Thank you very much,” Obama’s were, “Everybody, sign up.  Go to healthcare.gov.” 

But all the presidential pleading isn’t likely to do much good without the mandate.  Here’s what Stephanie Cutter wrote on the White House blog about a year after the Democrats passed Obamacare into law:

“The Affordable Care Act…bans insurance companies from discriminating against people with pre-existing conditions. However, unless every American is required to have insurance, it would be cost prohibitive to cover people with pre-existing conditions.

“Here’s why: If insurance companies can no longer deny coverage to anyone who applies for insurance – especially those who have health problems and are potentially more expensive to cover – then there is nothing stopping someone from waiting until they’re sick or injured to apply for coverage since insurance companies can’t say no. That would lead to double digit premiums increases – up to 20% – for everyone with insurance, and would significantly increase the cost [of] health care spending nationwide. We don’t let people wait until after they’ve been in a car accident to apply for auto insurance and get reimbursed, and we don’t want to do that with healthcare. If we’re going to outlaw discrimination based on pre-existing conditions, the only way to keep people from gaming the system and raising costs on everyone else is to ensure that everyone takes responsibility for their own health insurance.”

So, in Cutter’s own words, without the individual mandate, Obamacare would be “cost prohibitive,” “would lead to double digit premiums increases,” and “would significantly increase the cost [of] health care spending nationwide.” In fact, “the only way” to make it all work is to enforce the individual mandate.  That is to say, without its requirement that private American citizens, for the first time in United States history, must buy a product or service of the federal government’s choosing, Obamacare would be much more of a disaster than it’s already poised to be.

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