On January 24, Senior Fellow John R. Graham testified in the effect of Obamacare’s individual mandate before the U.S. House of Representatives’ Ways & Means Committee Oversight Subcommittee. A three-minute highlight reel is posted below:
You can read his written testimony at this link and watch the entire testimony at this link.
(A version of this Health Alert was published by Forbes.)
Governor Charlie Baker of Massachusetts has proposed a tax of $2,000 per worker on businesses which do not offer health coverage to employees who become dependent on Medicaid. This makes him the second Republican governor of Massachusetts to buy into the notion that imposing taxes (or fines or penalties or fees) on individuals and businesses can force them to accept responsibility for government failure at getting health spending under control.
Evidence from Massachusetts and the nation shows the opposite is true. Yesterday, I testified on the effect of Obamacare’s individual mandate before the Oversight Subcommittee of the U.S. House of Representatives’ Ways and Means Committee. (The video is at this link, and my written testimony is at this link.)
I was joined on the panel of witnesses by Dr. John E. McDonough of Harvard University’s T.H. Chan School of Public Health. Professor McDonough was a central figure in Governor Mitt Romney’s 2006 Massachusetts health reform, where the individual mandate was first implemented. Governor Romney tried to label it a “conservative” or “Republican” idea. The spin was that the mandate characterized individual responsibility.
The reality is the mandate merely camouflages significant growth of government spending and control over health insurance. This has been the case in Massachusetts since day one: Spending has grown out of control despite many failed efforts to bend the cost curve. Continue reading Massachusetts Governor Hiking Taxes To Rescue Failed Health Reform
(A version of this Health Alert was published by Forbes.)
Next Tuesday afternoon, I am scheduled to testify before the U.S. House of Representatives’ Ways and Means Oversight Subcommittee on Obamacare’s individual mandate that almost all Americans maintain health insurance.
This is Obamacare’s least popular feature. It was the subject of the 2012 lawsuit asserting Obamacare was unconstitutional: Never before had the federal government forced any resident to buy a good or service from a private business. The people lost that argument. Nevertheless, Republicans have pledged to eliminate the individual mandate. This commitment remains good politics. However, it is also good economics. Continue reading Obamacare’s Individual Mandate Very Inefficient
The “slacker mandate” is the provision in Obamacare requiring employer-based health plans to offer benefits to adult dependents of their workers, up to age 26. I previously discussed research showing the mandate reduced work among adults, aged 19 to 26, and increased the time they spend socializing, sleeping, and exercising.
What about the financial costs of the mandate? Speak to an insurance agent or benefits consultant and they will tell you the cost are fully borne by working parents. In the old days, employer-based health insurance was offered to workers in three sizes: Single, couple, or family. It did not matter how many kids you had. Today, each dependent adds to the premium. So, the “slacker mandate” is paid for by the working parents. That is not really a problem for society. However, there is more to the story.
A remarkable study published by the National Bureau of Economic Research concludes this happened. The slacker mandate reduced wages among workers without children by $211 a month, but did not reduce wages among workers with children (either minor or adult) by a statistically significant amount. Continue reading Who Pays Obamacare’s “Slacker Mandate”? Workers with No Kids!
Just before Christmas, Congress voted to deficit fund Obamacare by imposing moratoria on a number of Obamacare taxes that are unpopular with interest groups. Left in place was the unpopular individual mandate to buy health insurance, which has no organized interest to lobby against it. Nevertheless, it is the most unpopular part of Obamacare.
The New York Times reports that a number of relatively high-income earners are choosing to remain uninsured, or even drop Obamacare coverage, and pay the fine instead: Continue reading Unpopular Individual Mandate Fails to Make People Buy Insurance
The media have reported that 6.6 million “taxpayers” paid the Obamacare penalty (tax) for not obeying the individual mandate to buy federally qualified health insurance in 2014. However, the actual figure must be much larger.
However, the report by the Taxpayer Advocate discusses “returns,” not individual taxpayers. It reports that 2.6 million 2014 returns claimed Obamacare’s premium tax credits, totaling $7.7 billion paid out, and an average pay out of $3,000).
We know from other sources that about 6.14 million individuals claimed tax credits for Obamacare coverage last year (87 percent of 7.06 million individuals). (And that is only if we count people who signed up during open enrollment, which ended in March 2014. Because special enrollment continued throughout the year, most of those who signed up later would also have claimed tax credits.) Continue reading Did 15 Million – Not 6.6 Million – Pay Obamacare’s Mandate Penalty?
(A version of this Health Alert was published at Forbes.)
Later this month, the Supreme Court will likely announce its decision on King v. Burwell, the lawsuit which asserts tax credits currently being paid to health insurers in 34 to 37 states that use the federal health insurance exchange are illegal. If the Supreme Court stops these tax credits, over six million people will be required to pay the full premiums for their Obamacare policies. This will cause a crisis, which will demand a response by Congress and the president.
President Obama recently stated that, “Congress could fix this whole thing with a one-sentence provision.” True: Repealing Obamacare in its entirety would only take one sentence. However, that is not likely what he meant. Congress would have the opportunity to propose changes to Obamacare, but they would have to be signed by a reluctant president who will never again face the voters.
Now that both chambers of Congress have Republican majorities, any legislative response will surely include eliminating the individual mandate, the most unpopular feature of the law. Victory for King would make Obamacare policies in most of the country “unaffordable” and thereby relieve 11.1 million people of the individual mandate. Any “fix” that re-imposes the mandate would be political kryptonite for this Congress. Continue reading King v. Burwell: How Important Is Obamacare’s Individual Mandate?
Those of us who take the time to understand the burdens that the federal government increasingly impose on us might be excused for envying the Obamacare tax dodgers, who got a special enrollment period to sign up for Obamacare if they let the February 15 deadline for enrollment whizz by.
From the Administration on February 20:
For those who were unaware or didn’t understand the implications of the fee for not enrolling in coverage, CMS will provide consumers with an opportunity to purchase health insurance coverage from March 15 to April 30. If consumers do not purchase coverage for 2015 during this special enrollment period, they may have to pay a fee when they file their 2015 income taxes.
These are the folks who, despite massive media coverage of Obamacare (which was signed in 2010) lived in blissful ignorance that the federal government now imposes a mandate on them to purchase a government-certified health plan. When they file their taxes, they will be shocked and appalled to learn that they owe a penalty.
For every other American, of course, ignorance of the law is no excuse. Obamacare is so unpopular, however, that the Administration knew it had to give relief to these folks.
Well, the early figures for the special enrollment are in, and they are pretty laughable: Only 36,000 of 4 million eligible enrollees signed up by March 29. Charles Gaba, an Obamacare advocate and leading expert on estimating Obamacare enrollees, thinks it’s too early to panic: Folks have another month to enroll.
I tend to agree: Someone who has still not figured out – after five years – that Obamacare imposes this mandate is unlikely to file his taxes early – or even on time.
Should everyone be required to have health insurance? The short answer is no. There is nothing that can be achieved with a mandate to buy health insurance that cannot be better achieved by a carefully designed system of tax subsidies. Beyond that, a requirement that everyone obtain insurance (as ObamaCare dictates) creates problems greater than the problem it is designed to solve.
They only argument that has ever been advanced for an individual mandate is a very sloppy…(no, make that a very, very sloppy)…inference from the free rider problem. Jonathan Cohn purported to give three arguments in favor of mandates in the New Republic the other day; but on digging below a somewhat shallow surface, we found that it’s actually the same argument three times over. Similar thinking can also be found on the political right.
Okay, so what is the free rider problem? Answer is below the fold.
Of all the criticisms that have been leveled at “ObamaCare” over the past year, the four worst features of the legislation have been almost totally ignored — by Republicans in Congress, by the national news media and even by serious economists. So you’re seeing it here first:
httpv://www.youtube.com/watch?v=MeriTXdLfZk
Beware of … Bearing Gifts