I had this conversation with my friend here Jack….
I put out that the Healthcare Law was designed with the mandate/tax penalty …..
But I also argue that the Obama Administration isn’t dumb enough to NOT have Plan ‘B’ if the Supreme’s narrowly void the mandate/penalty…
The issue is a POLITICAL one right now….
Not a practical one…
There are exemptions and subsidies ALSO in the Law that make signing on an attractive thing for American’s…
Even if they aren’t afraid of the tax penalty…
“It’s probably the the biggest area of uncertainty around all estimates about the law,” said Larry Levitt, a health insurance expert with the Kaiser Family Foundation.
The Obama administration argues that requiring individuals to get coverage is essential to the success of two of the most important — and popular — regulations that the law will impose starting in 2014: a rule that insurers can’t discriminate against people with preexisting conditions, and limitations on how much they can vary rates among customers.
Many of the law’s supporters insist that without the mandate, these rules would impose an unsustainable burden on insurers, ultimately causing the market to implode.
In fact, the government contends that if the mandate falls, these provisions should be struck as well. With no requirement that they buy insurance ahead of time, this argument goes, people could wait until they were sick to purchase a plan, skewing the insurance pool toward the ill, who are more costly to insure.
“That’s not a hypothetical,” said John McDonough, a professor at the Harvard University School of Public Health.
He points to New Jersey, New York, Kentucky and Washington, which attempted to introduce similar insurance regulations in the 1990s. None included a requirement that residents obtain coverage. The resulting disruption to the states’ insurance markets was cataclysmic: Rates skyrocketed, and many insurers simply stopped offering plans.
But Levitt argues there is an important reason that the impact at the national level might not be so dramatic: In contrast to the state laws, the health-care statute will offer millions of Americans generous subsidies to help buy private plans.
This means that many more people — including healthy people — who are not currently buying insurance because of its cost will be prompted to enter the market voluntarily.
“It becomes a much better deal for you. So you are more likely to enroll even without a mandate,” Levitt said.
Paul Starr, a health policy expert at Princeton University, agrees and points to the high enrollment rates for Medicare’s Part B and Part D plans, which cover doctors and prescription drugs; in contrast to Medicare’s hospitalization plan, they are optional.
“Seniors don’t have to sign up, but they do because it’s a good deal,” Starr said.
He also notes that complex “risk adjustment” mechanisms would protect private insurers that end up with a disproportionately sick pool of customers.Share on Facebook