Last spring, the ObamaCare individual mandate survived the Supreme Court arguments as a constitutionally permissible tax, and it’s a tax that the health care law’s advocates defended as absolutely necessary in order to herd enough healthy people into the system to pay for everyone’s illnesses. Most unfortunately, the Obama administration is quickly discovering that they may-or-may-not have — er — miscalculated the amount they’re going to need to tax people to create the incentives that will keep the whole system viable, Politico reports. Whoever could have seen this coming?
Here’s the catch: The individual mandate penalties will be pretty weak as they are phased in over two years — only $95 when they start in 2014, much less than it costs to buy insurance. And yet, everyone with pre-existing conditions will have to be accepted for coverage right away.
That’s why insurance companies are telling the administration the mandate won’t be enough for the first two years. They want more incentives — such as a late enrollment fee — to get healthy people to sign up quickly. Without getting the healthy folks in, the fear is that everyone’s health insurance premiums could shoot through the roof when all those sick people get their coverage.
The idea is being called “mandate plus” — because some of the ideas were floated by health experts last year as replacements, in case the Supreme Court struck the mandate down. Now that the mandate is here to stay, insurance companies and some policy experts say the other ideas should go hand in hand with the coverage requirement to make the whole system work — and be affordable.
Insurers are pushing for the Department of Health and Human Services to provide them with more “sticks,” i.e., compelling (read: expensive) reasons for people to opt into the system early, in order to pay for this gigantic bureaucratic nightmare. It’s not a sure thing yet, but as Peter Suderman points out at Reason, it’s quite the little ploy they just managed to pull off:
The Obama administration isn’t saying that it plans to beef up the mandate, at least not yet, but according to Politico the Department of Health and Human Services requested suggestions for expanded mandate enforcement late last year. It’s a remarkable strategy, really: Fight tooth and nail to pass the mandate, knowing it won’t be effective, and then use worries about its ineffectiveness as an excuse to make it stronger.
Combined with all of the other “unforeseen” problems ObamaCare is encountering, like plenty of states declining to do the feds’ work for them on the promised health care exchanges and skyrocketing insurance rates for some groups, the many promises of ObamaCare seem to be imploding on themselves rather quickly, don’t they?