The US Supreme Court this month hears arguments on the constitutional challenges to the ObamaCare law — with the top challenge centering on the mandate that every American buy health insurance. Increasingly, and not just for constitutional reasons, that mandate looks to be the law’s downfall.
Princeton University’s Paul Starr, whose advice helped shape ObamaCare, recently admitted that the mandate was a big mistake.
“Democrats managed to get themselves the worst possible result: a law that enflames the opposition on the basis of overreaching federal power but may not work in practice because there is no real power behind it,” he wrote in a post for The New Republic. “Whether or not the court strikes it down, the individual mandate has been one of the most serious political and policy mistakes of recent decades.”
The American people are clear in their opinions. A poll from the AP-National Constitution Center found that a stunning 82 percent don’t think the federal government should be able to require them to buy health insurance or pay a fine if they don’t.
If the federal government, which constitutionally has “limited” and “enumerated” powers, can force private citizens to use their personal money to buy a private product, there is no end to what it could force citizens to do.
But even if the mandate survives the Supreme Court, it’s destined to fail, because (as Starr notes) it just can’t work as intended.
One mandate goal is to bring young and healthy people into the health-insurance market — people who, without the threat of a fine, are much less likely to buy costly health policies.
But this threat won’t do that. The law’s penalties are “toothless,” as the 11th Circuit Court of Appeals put it in August, in finding the mandate unconstitutional.
Under the law, the federal government is to fine individuals a maximum of $695 a year or 2.5 percent of their income — whichever is higher — for being uninsured. That’s too little to induce people to sign up for insurance that (according to the Congressional Budget Office) soon will cost more than $20,000 a year for a family. Millions will decide to pay the fine instead of buying coverage.
Of course, a big reason insurance will be so expensive is the rest of the ObamaCare law. Notably, it slaps insurers with strict rules on how they can price and sell their products — rules that have already sent premiums through the roof in such states as New York. These include “guaranteed issue,” which mandates the sale of policies to all comers, and “community rating,” which limits insurers’ ability to vary rates.
That means insurance companies will be forced to sell policies even to people who wait until they fall ill to sign up. And they’ll have to charge the same premiums as if the person had been insured all along.
Oh, and young people will be forced to pay more than their share for health insurance so that older people can pay less — ObamaCare’s version of fairness.
Will the federal government even have the political will to fine people? It’s difficult to imagine a policy more politically damaging than seeking out and financially punishing people who don’t buy insurance.
So, in all likelihood, millions of uninsured Americans will choose to wait, pay a fine — and buy insurance only when they need it.
This is precisely what’s been happening in Massachusetts under its 2006 health-reform law, which included an individual mandate. Ever more people are buying insurance just before incurring huge medical bills, then dropping it as soon as they’re treated.
ObamaCare backers are well aware their legislation fails without an effective individual mandate. Last year, Justice Department lawyers told federal Judge Roger Vinson more than a dozen times that the mandate is “essential” to the overall legislation.
Yet this mandate can’t work.
The Supreme Court would do the nation a great service by declaring the entire law unconstitutional and forcing Congress to go back and get reform right.
Published in the New York Post, March 5, 2011.