The Courier Press has an editorial on the health care decision. (An aside: I wonder if perception of the decision will be altered because it doesn’t have a snappy name like “Bush v. Gore” or “Brown v. Board of Education.” – National Federation of Independent Businesses v. Sebelius (pdf) doesn’t exactly roll off the tongue.)
The editorial noted a Rasmussen poll (a polling outfit that generally has its thumb on the right side of the scale) that said 54% of likely voters favored a ruling that the act was unconstitutional. But then it correctly noted that rulings on constitutionality shouldn’t be popularity contests. (Reminds me of the Onion piece: “Area Man Passionate Defender of What He Imagines the Constitution to Be” — “Mortensen told reporters that he’ll fight until the bitter end for what he roughly supposes the Constitution to be.”)
The Courier Press editorial says that upholding the mandate requirement will result in 30 million people being obligated to buy health insurance; of which maybe 4 million will opt to pay the penalty instead.
My understanding is that the impact on the uninsured is roughly as follows:
#No need to buy insurance if your income is below the tax reporting threshold. ($9,500 single; $19,000 married filing jointly).
#No need to buy insurance if the premium exceeds 8% of your household income.
#Option to pay the penalty instead of buying insurance. The penalty will start lower but will reach $695 or 2.5% of income. So, if you go with the penalty-as-tax rationale, it’s a 2.5% tax increase offset by a tax credit for those who buy health insurance.
The mandate is a necessary trade off for limiting or eliminating an insurer’s ability to deny coverage. Health insurance only works when there is uncertainty about who is going to get sick – we might be able to estimate the total incidence of sickness and the total cost of managing that sickness. That cost is manageable over the group as a whole but potentially unmanageable to any given individual. Each individual in the group is willing to kick-in to cover the costs in order guard against the possibility that particular individual might be the one who gets sick. It’s a way of managing risk. Once you have certainty as to who is sick, you are no longer managing risk.
If insurers can no longer deny coverage for pre-existing conditions, the incentive is gone to pay up front to manage risk. You just wait until you get sick before spending your money on insurance. That’s why they need to mandate purchase of insurance – or come up with some other way to make sure you’re kicking into the pool. Insurance only works when the healthy are subsidizing the sick.
In any case, I think we all need to do a better job of learning about and explaining to others the details of this health care bill. That 54% opposed number goes way down when the people are asked about the specifics of the plan. It’s only when it’s this vague abstraction called “Obamacare” that people really dig in their heels. And as a corollary to that, opponents of Obamacare should really be pressed on their alternate plans. The status quo is unsustainable and pretty much no one will go on record as being in favor of the status quo. But plans to repeal Obamacare immediately with only vague hand waving about an alternate system is nothing more than a plan to continue with the broken, expensive system we have now.