The individual insurance mandate contained in Obamacare might well be doomed, leaving experts to ponder how the government can achieve its dual goals of providing health coverage for all citizens and driving down the price of care without the threat of a legal challenge. From Bloomberg:
The alternative that comes closest to preserving the mandate would be to give tax credits to everyone who carries health insurance. That’s functionally the same as fining those who don’t have coverage, and less subject to constitutional challenge. It’s essentially the approach being advocated by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican who would provide refundable tax credits, usable solely for buying health insurance, of $2,300 for individuals and $5,700 for families.
Of course, as Bloomberg astutely points out, if you can work around the constitutionality of a mandate by simply granting a tax credit instead of a penalty, it tends to trivialize the three days the Supreme Court spent debating Obamacare. Martin Sullivan at Tax.com further highlights the silliness of the situation:
The only difference between the mandate and your common tax incentive is that Congress framed the incentive as a tax penalty instead of a tax break. I recognize there might be a legal difference between the two approaches that is beyond my comprehension. But the Court, Congress, and the public should understand that economically the two approaches are exactly the same. Any tax penalty can easily be redesigned as a tax incentive. So, for example, a $1,000 tax penalty for not doing X could be replaced by a tax policy whereby all individuals’ taxes are raised by $1,000 and then they are given a tax credit of $1,000 for doing X.
Sullivan goes on to illustrate his point with the following chart (click to enlarge)
Assuming a tax credit isn’t an option, what else can be done to make sure we all get health insurance? Remember, the more people that are properly insured, in theory, the more the cost of insurance should come down for the masses.
Bloomberg offers a couple of choices:
If the credits don’t fly, another way to maneuver people into buying insurance without a mandate is to warn them that their premiums will go up if they put off getting covered. Medicare has late enrollment penalties for both Part B doctors’ and outpatient coverage and Part D prescription drug coverage. The Part D penalty is 1 percent of the premium for each month after age 65 that someone enrolls.
A related idea, used in most company health plans, is to give people just one opportunity per year to sign up. That way they can’t game the system by waiting until they’re sick or hurt to rush to buy a policy. If they miss the deadline, they have to buy coverage at whatever price the market will bear — which could be prohibitively high for the seriously ill. That might be more punitive an idea than America can stomach.
And if all else fails, the government can always resort to simply paying professional athletes to tell us to buy insurance, because who better to take financial advice from then grown men with high school educations who’ve made exorbinant sums of money playing catch. As silly as it sounds, it works. In baseball-crazy (since 2004) Massachusetts, players from the Red Sox took time away from getting loaded in the clubhouse to urge people to get covered, and now more than 98 percent of state residents have health insurance.