The detested Obamacare mandate deserves to go

In the most welcome news of the political season, word has it the upcoming tax-cut bill, expected to pass handily in the House this week, is that President Obama's signature tax hike, known as the Obamacare mandate, is about to be scrapped. It's a report so good the challenge is to not get over-optimistic, because we are in the habit of being disappointed by this Congress.

Congress has always known how loathed  this mandate is to the public, because it is always coming up for a vote. The media amplifies a chorus of special interests who claim catastrophe if the public fails to keep suffering for their sake from the mandate, but the reality is, it's the public, the people who call their congressmen and describe what the nightmare of Obamacare is to them who are suffering from the law as it is - and their concerns are the ones being ignored.

Insurance costs have tripled since the detested law was enacted by one party in 2010. Not only are costs higher, service is lower. People are paying $6,000-$14,000 deductibles on top of their policy costs before they can get a drop of health care. What's more, choices of insurer, who all sell the same awful policies, larded up with services not everyone wants, or can use, such as drug addiction rehabilitation with its 90% failure rate, and pregnancy services (these are the top reasons why Obamacare premiums are so high and service is so low, according to Obamacare navigators), are diminishing. Thousands of counties now have just one Obamacare insurer, and with overpriced, zero-value policies, only the very sickest are buying them.

In the end, it's the working class and lower middle class, which doesn't qualify for subsidies that is getting socked hardest by the Obamacare mandate.

According to Investor's Business Daily:

The 2017 tax data offer new evidence that there's much to be gained by moving away from the individual mandate and much to lose by sticking with it. Tax returns that had been processed as of April 27 included 4 million that paid ObamaCare fines (officially known as individual shared responsibility payments), with an average payment of $708.

What is striking about the data is that the average payment is barely higher than the minimum payment of $695. Since people were required to pay the greater of $695 or 2.5% of taxable income above the filing threshold ($10,350 in 2017), one takeaway is that most of the $2.8 billion in fines paid through April appear to have come from people with modest to moderate incomes. As a frame of reference, CBO's 2014 analysis implied that the average mandate payment for this tax season would be roughly $1,075 and that the total amount paid by people earning up to three times the poverty level would barely exceed $1 billion.

What's galling is how false the doomsaying of the Obamacare boosters really is. Thirteen or 16 million thrown off their insurance if the mandate is gotten rid of?

This is baloney. What will happen is that the 16 million will dump Obamacare and its nasty tax mandate and buy non-Obamacare plans which do not follow the Obamacare one-size-fits-all template. These will be plans that might not include drug addiction coverage for those who don't use illegal drugs to take one example, or no pregnancy coverage for male buyers, or no pediatric dental coverage for single adults. That leaves more room for the coverage a buyer needs. That will make the costs more manageable. The lans these 13 million choose will be market-tested plans that must give real value or these customers won't buy them. That means deductibles will go down. Insurance companies must be up to the challenge or Congress will introduce more competition into that market.

Incredibly, ending the Obamacare tax mandate will also cut the deficit, as Avik Roy notes in his Forbes column here.

Indeed, leaked analyses revealed that CBO believed that approximately 16 million people would voluntarily drop out of the insurance markets without a mandate, and that the majority of those dropouts would occur in Medicaid and the employer-based health insurance market, not the Obamacare exchanges.

In other words: it wasn’t that the GOP bills would take coverage away from those 16 million, but that those individuals would choose not to sign up, if there were no tax penalty forcing them to do so.

The whole idea of a mandate - to force people into buying plans they don't want at costs they can't afford - is utterly intolerable in a free society.  Nobody should be forced to buy junk Obamacare insurance they don't want, can't access due to high deductibles or can't use. The fact that its high costs are throwing millions of people off insurance at all and taxing them for the privilege of being too poor to afford it is outrageous.




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