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POLITICS

Obamacare without the mandate

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Politics,Beltway Confidential,Conn Carroll

The Washington Post editorial board tries to make the case that the individual mandate is Constitutional today, writing (emphasis not in original):

Health-care services account for some 17 percent of the country’s gross domestic product; today, the average family pays an additional $1,000 annually in the form of higher premiums to subsidize the costs incurred by those who receive care but do not carry insurance. The mandate is an indispensable tool for achieving the government’s compelling goals of universal coverage and lower costs. Insurance companies would be unable to offer affordable coverage to those with preexisting conditions, for example, unless they also were guaranteed enrollment of the young and healthy customers who are less likely to consume health-care services.

If the individual mandate is such "is an indispensable tool" for achieving "universal coverage" and "lower costs," then why does Obamacare accomplish neither?

Even after it is fully implemented, an estimated 27 million Americans still will not have health insurance in 2021. Many of these 27 million-still uninsured will have low enough incomes to avoid paying the individual mandate fine, but by 2022 the Congressional Budget Office estimates that the rest of them will pay a total of $54 billion in fines.

And what happens if we remove the mandate? The number of uninsured Americans increases by just under 60 percent, from 27 million to 43 million. So with the mandate about 10 percent of the population will still be uninsured in 2021. Without the mandate that number rises to 15 percent. Granted, fewer people will have health insurance without the mandate than with it, but at no point does Obamacare achieve "universal coverage."

But what about "lower costs"? Well according to the CBO, Obamacare's gross cost actually decreases without the mandate. The CBO reported last year:

The loss of revenues from eliminating the individual mandate penalties would increase the deficit; but the estimated savings from reduced subsidies are greater—yielding net savings of about $282 billion over the 2012–2021 period. Most savings (about $149 billion) would come from lower Medicaid enrollment. On balance, federal subsidies for the purchase of insurance through the exchanges would be about $69 billion lower. Primarily because reductions in employer coverage would result in more taxable compensation for employees, the removal of the mandate would increase tax revenues by about $80 billion.

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