Wednesday, July 11, 2012

The Individual Mandate - a Reminder

The Left is waging a war against the repeal of Obamacare by painting Republicans as heartless bastards who want to take people's insurance away from them. Here is a reminder about how Obamacare's individual mandate actually works.

The original goal was to keep people from being denied insurance because of preexisting conditions. In back room deals the insurance companies agreed to this as under condition that a mandate be issued to force everyone to get insurance. This includes young, healthy people who felt that they could not afford insurance or could only afford catastrophic insurance. This will add up to 30 million new people to the insurance roles, more than making up for the ones who were previously uninsurable. It also means that preexisting conditions will be a thing of the past since everyone will have insurance in the future.

In a masterful bit of spin-control, the Obama Administration used this as a selling point. Instead of forcing 30 million people to buy insurance that they did not want, Obamacare is adding insurance to 30 million who were previously uninsured.

The penalty for not being insured is a tax administered by the IRS. It was not called a tax during passage but it was argued before the Supreme Court that it is a tax. The reason for this obfuscation is that it would never have passed if they called the tax a tax.

The big winners are the insurance companies. The Democrats expected to be big winners but the law continues to be unpopular with a large number of conservatives wanting it repealed and a number of liberals wanting it strengthened.

There is a good chance that many of the uninsured will decide to pay the tax rather than buy insurance. There is a very real possibility that the penalty for non-compliance will be raised until it is cheaper to buy insurance.

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