The House of Representatives is scheduled to vote on Wednesday to reduce the fine/“tax” for violating Obamacare’s individual mandate this year to $0. It will be interesting to see how Democrats in both the House and Senate react. President Obama has plainly violated the law—and the constitutional separation of powers—by unilaterally delaying the individual mandate for some people (those who liked their health plan but got a cancellation notice) and by unilaterally delaying the employer mandate. Given these extralegal executive actions, and given the technological train wreck than the Obamacare exchange rollout has been, it would seem to be a no-brainer to pass actual legislation (as the Constitution requires for changing laws) to waive the fine (at least for the time being) for those who choose not to buy federally mandated insurance they don’t want. But the Democrats love the individual mandate and rightly recognize it as Obamacare’s coercive core, so this puts them in a bind.
Despite Obama’s stubborn insistence that Obamacare provides “universal coverage,” the Congressional Budget Office (CBO) says that—even a decade from now, even after more than $2 trillion has gone out the door—the health-care overhaul would still leave a Baskin-Robbins’ like 31 million people uninsured. That’s a far cry from “universal coverage.” But one can think of it—and describe it—as “universal,” so long as one is forcing every American, as a matter of federal law, to do the government’s bidding. Without the individual mandate, however, Obamacare would cease to be “universal coverage”—even in the sense of being universally coercive—and would simply become “44 percent coverage.” That would be demoralizing to the left.
Moreover, the mandate is essential to Obamacare’s design. As such, any “fixes,” “tweaks,” or “improvements” to Obamacare would require that the widely hated mandate remain—and that’s one of the main reasons why Obamacare needs to be fully repealed in connection with the passage of a well-conceived conservative alternative.
In September, the CBO estimated that, without the individual mandate’s being in effect, about 2 million fewer people would buy insurance for this year in the individual market. That’s fully half of the CBO’s current estimate of the net increase in individual-market coverage under Obamacare this year (6 million people buying Obamacare exchange plans minus 2 million people losing their existing individual-market plans). It turns out that even the CBO thinks that unless people are compelled to buy Obamacare-compliant insurance, a huge portion of them won’t choose to do so.
The individual mandate is also necessary to help prop up Obamacare in other important ways. Indeed, the Obama administration has consistently argued that, without its individual mandate, Obamacare’s architecture would collapse. Here’s what Stephanie Cutter wrote on the White House blog about a year after the Democrats narrowly passed Obamacare into law without a single Republican vote:
“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 its 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 rely on the individual mandate. In other words, 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.
That’s why Obamacare supporters will be loathe to agree to eliminate the penalty, or tax, for violating the individual mandate this year. Right now, someone who makes, say, $61,000 a year would have to pay $509 as compensation for violating the federal government’s decree, and Obamacare supporters won’t want that tally to be reduced to $0. It’ll be interesting to see how they will explain their thinking on that point to the American citizenry.
Jeffrey H. Anderson is executive director of the 2017 Project, which is working to advance a conservative reform agenda.