ObamaCare: Tax versus Penalty

James V. DeLong
At a program on ObamaCare last Monday, Grace-Marie Turner of the Galen Institute made a crucial point about how the comedy of mendacity called ObamaCare will unfold. After an initial phase-in period, the "tax", as we now know it to be, for not buying health care insurance maxes out at $695 per adult per year, or half of that for children. A household's total liability is capped at $2085. (All this is in Section 5000A.) The cost of health care insurance for a family of four is about $15,000. So, obviously, the rational young and healthy person or family will pay the tax, and sign up for insurance only if and when it is needed. At that point, the insurance company must accept them, under the law. Such a system must impose massive losses on the insurers because the only people who sign up will be those who know that they will get back more than they pay in premiums. But this was not the scheme envisioned during the special interest bargaining that led up to the law. Then, the imposition...(Read Full Post)