Obamacare’s supporters bet they will buy insurance because Obamacare will subsidize the purchase and because they will otherwise have to pay penalties under the law’s individual mandate.
But Scandlen notes that the penalties are meaningless. Not only are they small, they are easily avoided. The only way Uncle Sam can extract them is by subtracting them from taxpayers’ income tax refunds. Simply avoid excessive tax withholding and the feds have no way of collecting.
As for the subsidies, Scandlen maintains that their allure, too, is overrated. They will be relatively modest for middle-income families, and to qualify, purchasers will be required to obtain very expensive “Cadillac” coverage.
People will also have the option of waiting to buy insurance until they get sick. Thanks to Obamacare’s “guaranteed issue” provision, insurance companies can’t turn anyone away, even those calling from the intensive care unit. This will only deepen the problem of the “adverse selection death spiral” as healthy people stay out of the insurance market while sick people jump in. This, in turn, will trigger even more premium hikes.
