King v. Burwell: How Important Is Obamacare’s Individual Mandate? | Health Policy Blog | NCPA.org

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.

However, the most popular provision of the law is the prohibition against health insurers taking pre-existing conditions into account when setting premiums or scheduling benefits. Obamacare’s supporters insist the two features go hand in glove. Because the law forces health insurers to accept any applicants without taking pre-existing conditions into consideration and charge everyone (except tobacco users) the same age the same premium, it must be coupled with an individual mandate.

If not coupled with a penalty (or fine or tax) for not having health insurance, people would simply wait until they get sick or injured and then buy health insurance. This leads to a so-called death spiral as health insurers increase their premiums in response to individuals’ behavior. It is an impeccable theory, but it does not hold up in a system run by politicians.

via King v. Burwell: How Important Is Obamacare’s Individual Mandate? | Health Policy Blog | NCPA.org.

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