Monday, October 28, 2013

Delay what mandate? No foolproof way to enforce Obamacare

Rush cast some light on this last week and reiterated today when Politico had to actually admit 'he's right!' Here's the original source...
Powerline: The movement to delay the individual mandate to buy health insurance raises a more fundamental question: what mandate? Under Obamacare, individuals are required to have health insurance. If they are not part of a group plan, they are supposed to purchase individual insurance through one of the exchanges. If they fail to do so, they have to pay a tax, or a penalty, or whatever it is. This tax/penalty was a major focus of the Supreme Court’s decision that narrowly upheld the ACA. These days, many commentators are advising healthy young people to forget about buying expensive Obamacare insurance, which is generally a bad investment for them, and instead go ahead and pay the penalty.

But they don’t have to pay the penalty. The mandate is a sham, and always has been. Theoretically, someone who chooses to be uninsured owes the government money, but the government is prohibited by the ACA from trying to collect it. What kind of a debt is it that can’t be collected?
Referencing a Joint Tax Committee summary, the Powerline piece concludes:
...the only way the IRS can possibly collect the penalty is by withholding your tax refund. No problem: if you arrange your taxes so that you don’t overpay, the penalty can never be collected from you.

Which is to say that there is no penalty for failing to comply with the Obamacare “mandate.” Many commentators have pointed this out, including us. Oddly, however, some observers who should know better continue to tell young people they should pay the penalty and forgo expensive insurance. No: young people, if they want to follow their self-interest, should forgo expensive insurance and NOT pay the penalty, because it can never be collected from them.

This is one of the reasons why many analysts say that Obamacare was designed to fail, that it is a house of cards that was always meant to collapse. Without any way to force healthy young people into the system to subsidize the elderly and those with pre-existing conditions, the Obamacare system is actuarially doomed. Either it is repealed; or insurance companies go bankrupt or refuse to participate further; or socialized medicine is achieved via the back door, i.e., taxpayers subsidize pretty much everyone so that the government inevitably takes control. Barack Obama is on video explaining that this is the real purpose of Obamacare...
If there's no penalty, there's no mandate...simple as that! Set to fail...but will the administration be allowed to let it fail (thus, on to single-payer), or will there be internal demands to prop it up and save it? What a mess...

Related link: The Obamacare Penalty: Yes, It Can Be Avoided