Obamacare's Individual Mandate Can't Wait
Obamacare

Obamacare's Individual Mandate Can't Wait

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House Republican leaders hope to hold yet more votes on Obamacare, maybe as early as this week. But this time, Republican leaders say, they will focus on the “individual mandate”i.e., the provision that imposes fines on Americans who can afford health insurance but opt not to carry it. The mandate is supposed to take effect in 2014, once Obamacare’s new insurance options are available in all 50 states. Republicans want to push back that date by one year.

Of course, Republicans would prefer to eliminate the individual mandate altogether, and get rid of the whole health care law while they're at it. But Republican leaders think they can use this new votewhich, presumably, neither the Senate nor White House would supportto make a point about the two parties and their priorities.

As you may recall, the Obama Administration recently announced a similar delay for the “employer mandate,” giving businesses an extra year before they must pay a fee if they don’t provide their workers with insurance coverage. If business is getting a reprieve from its requirement, the Republicans say, so should individual Americans. “Do [Obamacare supporters] really want to defend a position to let big-government contractors off the hook, but not a family of four living in Ohio?” House Budget Committee Chairman Paul Ryan told National Review. ”Do they want to let big banks off the hook for Obamacare, but not the single parent trying to make ends meet? Good luck defending that position.” 

Ryan may be right about the politics. The individual mandate has always been among Obamacare’s least popular provisions. But, from a policy standpoint, the two provisions have almost nothing to do with one another. The employer mandate is supposed to encourage business to provide their workers with insurance, while raising some revenue that will help finance Obamacare’s assistance to poor and middle-income Americans. But most policy experts think the employer mandate won’t have much effect on employer decisions. And it’s not supposed to raise that much money in the first few years. The provision, in short, is simply not that big a deal. Some smart observers think the law would actually be stronger without it.

The individual mandate is another story entirely. And if you paid attention in 2012, when the provision’s constitutionality came before the Supreme Court, you know why. If you want to make sure everybody can get comprehensive health insurance, and you’re not willing to simply have the government insure everybody directly, then you have to regulate private insurancespecifically, you have to prohibit insurers who sell direclty to consumers from denying coverage, varying benefits, or charging higher rates to people with relaively high risks of getting sick. Otherwise, those people won't be able to find affordable coverage. But once you impose those requirements on insurers, you give people less incentive to get insurance in the first place. Healthy people, in particular, would be more likely to take their chances and go without coverage. By imposing a financial penalty on people who could pay for insurance but elect not to do so, you make it more likely that large numbers of people, including people in relatively good health, sign up for insurance. Not everybody will be happy about it, for sure. But the majority of people already have insurance and, among those who don't, most would like it if they could afford it.

Without the individual mandate, most likely, Obamacare would struggle. That's not to say it would fall apart completely: The law’s tax credits, which reduce the cost of insurance for people with incomes below four times the poverty line, would entice many people to get insurance anyway. And that would probably be enough to keep the system functioning. But without the individual mandate, fewer people would sign up for insurance, which means more people would be exposed to the financial shock of illness. Insurers would seek new premium increases, beyond those necessary already, adding significantly to the government’s cost of insuring each new person. The law as a whole would become less stable and effectivewhich, of course, is precisely what the Republicans want. During a recent press conference, House Speaker John Boehner said voting to delay the individual mandate would be “removing another leg from the rickety stool that’s propping Obamacare up.” Hey, at least he's being honest about his intentions.

Whether Boehner can round up the votes for a bill targeting the individual mandate remains to be seen. Some Republicans are so committed to repealing Obamacare that they consider any lesser measure counter-productive. But this much is clear: Having voted to repeal Obamacare 37 times, House Republicans have yet to construct, let alone pass, an alternative that would come anywhere close to providing the same kind of financial protection to the same number of people. If these actions are indicative, they would happily eliminate a law through which tens of millions will get health insurance, and many more will get peace of mind, and then replace it with nothing at all. 

A message about priorities? You bet.

Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn

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