COMMENTARY: Why Eliminating The Individual Mandate of Obamacare May Not Be Such A Horrible Idea
-By Tracey Ricks Foster
The White House and the rest of concerned Americans and political pundits are counting down the hours to the big reveal. The United States Supreme Court will release its’ conclusive decision regarding the fate of President Obama’s AFFORDABLE CARE ACT on Thursday. Some say that the President’s re-election hopes depend roughly on how the nine Justices rule. Others lament that while the controversial health care law could be the thrown out in its entirety, more than likely the individual mandate portion that requires all U.S. citizens to acquire some form of health insurance will be struck down. Which would be a good thing.
When President Obama initially asserted his argument over the need for America to adopt some form of universal health care on the campaign trail back in 2008, the proposal he laid out to the American people contained a key element: public option. The President’s campaign website then expressed that “any American will have the opportunity to enroll in [a] new public plan.” The President noted in a speech in 2009 that “a public option will give people a broader range of choices and inject competition into the health care market” and that any plan he decided to sign “must include…a public option.”
Why “public option?” The theory behind public option is that the U.S. federal government would create an insurance plan that would be designed to compete with private insurance companies. In this way, private insurance would be in direct competition for consumers with the federal government. The public would have the opportunity to compare and rate one insurance competitor against the next. Then compare those rates with the U.S. government’s. Yes. There would have been a 1 trillion price tag attached to the public option proposal. The down side. The up side? Consumers, for the first time in U.S. health insurance history, would be in the driver’s seat. Finally, health insurance companies who fleece its’ customers with high deductibles and exclude those with preexisting conditions would be forced to evaluate their policies and scrutinize the affects that their capitalism have on customers. The public option would have kicked open the health insurance market and necessitate health insurance companies and providers to become competitive in all 50 states. Consumers would have the luxury of comparable shopping within state or cross state lines for the best health insurance rates. A sure win win for American consumers.
However, the health insurance industry despised the idea. Just the very thought that the federal government could come in and legitimately steal consumers based on competitive rates was appalling. Health insurance lobbyists were paid millions to voice the industry’s opposition and the GOP, along with the Tea Party called public option “socialism.” Soon, the White House changed its tune. Public option was ‘out.’ Mandatory health insurance coverage was ‘in.’ Competitive rates? No. Cross state insurance? No. Consumers win? No. Health insurance companies and providers win? Yes.
So, the final draft of The Patient Protection and Affordable Care Act was signed in to law on March 23, 2010 by President Obama without public option. Instead, within this passed legislation is the “individual mandate” which requires individuals to purchase health insurance and threatens punishment for those who don’t, hence the need for the Supreme Court to intervene.
Even though proponents of the President and the “individual mandate” assert that the benefits of this mandate would solve the problem of the massive debt left by uninsured Americans, whose health care costs are paid for by insured consumers thereby driving insurance rates up, data proving that the individual mandate will eradicate the problem has yet to be forthcoming. Economists, on the other hand, argue that not all uninsured consumers leave a bill for the insured to absorb. Statistics reveal that uninsured consumers pay about 25% of their health care costs out of pocket. In 2001, $35 billion in uncompensated health care was received by the uninsured or only 2.8%.
So, what are the true benefits of the individual mandate? The individual mandate will not propel health insurance rates downward making the purchase of health insurance plans affordable for the unemployed or uninsured. If anything, the individual mandate is only viable and enforceable if EVERYONE participates. What happens to those who are not able to participate because of their economic situation? Then these will be subjected to fines under the law.
However, this statute gives way to the same problem that former Massachusetts governor and presumed Republican presidential candidate Mitt Romney faced. The solution? Exemptions and vouchers paid for by insured consumers! Which in essence takes the whole argument back to the reason why the individual mandate provision in the Affordable Care Act may not work and could very well be stricken down by the U.S. Supreme Court.