by | ARTICLES, BUSINESS, CONSTITUTION, GOVERNMENT, OBAMA, OBAMACARE, TAXES, TRUMP
While we’re on the subject of tax reform, one particular item that could be included in the package is the elimination of the individual mandate. Since SCOTUS classified the penalty as a tax, it is one that can be repealed as part of the reform, and would produce an estimated savings of $338 billion over 10 years, according to current CBO figures.
Eliminating the individual mandate would not affect Medicaid or pre-existing conditions; it would simply allow taxpayers to have the freedom to decide if he or she wants to forego insurance without being penalized (taxed) for their choice. According to the Wall Street Journal and IRS data, more than 90% of households who paid the “individual shared responsibility payment” (tax) earned less than $75,000. The tax is essentially a tax on the poor.
Republicans would be wise to repeal the mandate, ease the tax burden on taxpayers, and use the savings gained within the rest of the tax package to strengthen other parts of the reform proposals and provide meaningful relief for all taxpayers.
by | FREEDOM, GOVERNMENT, OBAMA, OBAMACARE
Obamacare was sold to the public as universal health insurance. Insurance, in and of itself, is an exchange of a premium payment in return for a guarantee against specific loss criteria — such as damage or death. Prime examples of this are home and life insurance. And yet, health insurance in our country is not merely a guarantee against loss due to ill health; it encompasses much, much more. In this way, health insurance doesn’t follow the examples of other insurance industries, and therein lies a major reason for Obamacare’s growing economic difficulties ($1.85 trillion) and growing opposition.
Typical health insurance plans nowadays function by providing both insurance and coverage of certain medical costs. With ObamaCare comes the individual mandate, which most people understand the meaning to be that everyone is required to purchase for themselves a health insurance policy (hence the idea of “universal coverage”). The rationale in favor of the individual mandate is to safeguard against societal calamity — that if someone doesn’t have health insurance and they get into an accident or get sick, he doesn’t become a burden on society.
A mandate to buy health insurance might not sound so terrible on the surface to some, because it dictates the purchase of something that just about everyone wants to buy anyway since it is sensible to do so. But what makes Obamacare’s individual mandate so odious is that it it forces people to buy a product comprised of both insurance and a slew of pre-selected, prepaid medical care – which includes paying for stuff they don’t need. This intentionally misuses people’s ability to buy their own reasonably priced insurance. And because the mandate requires coverage to be universal, you have to include everything and everyone, such as preexisting conditions, high risk, etc. Therefore, the individual mandate requires an-insurance-that-is-not really-just-insurance, making reality very different than what it is thought to be.
From an economic standpoint, the individual mandate is a terrible idea because its sole purpose is to obfuscate the true cost of caring for those persons whose circumstances or risk, such as preexisting conditions or age, would result in paying more for health insurance. By controlling the prices through artificial means instead of private competition, the individual mandate creates a misallocation of resources, which is a failure of the fundamental principles of Economics 101.
A second major problem with the individual mandate as it is written is that you can forgo coverage in lieu of paying a penalty and then if you develop a condition, you can still get coverage without being denied due to a pre-existing condition. Unfortunately, this only serves to make prices more expensive for those who are healthy because there must be funds to cover those who are not.
I would argue that having health insurance coverage should not be a mandate in the strict sense of the word; i.e, one should not be required to purchase it. That being said, I also think that people should regard the ownership of a health insurance policy (a “true insurance”) as a basic necessity for proper living. The attitude toward health insurance coverage –- by citizens, legislators, and insurance companies alike —- truly needs a paradigm shift if health care is to be reformed for the better. The health insurance sector must be restructured to resemble other insurance industries such as life, fire, and home; in doing so, they will create a more competitive and dignified system as well as fulfill the purpose of safeguarding against an unforeseen disaster. Therefore, the actual components of what comprises “health insurance” (currently insurance and pre-paid medical care) must change.
The idea of helping everyone to carry health insurance sounds like a lofty goal. However, the individual mandate is the wrong way to attain this. From human point of view, the idea that all persons have coverage may be good, but imposing the mandate is bad for liberty. Turning basic economics on its head, it incentivizes the wrong things and creates most expensive health care possible.
The government has never been efficient with other people’s money. The economics of the current health care law will only serve to reduce the quality of health care for our citizens because it lacks free market competition. A health care reform solution could be focusing on providing a ” true insurance” product that everyone could have – one that protects against having an extraordinary event happen whose economics is more than can be afforded. Obamacare is not an insurance; it is pre-paid medical care system whose product provides for all at all costs. Imposing an individual mandate for such a program is ultimately economically unsustainable. The current health care law should be overturned for the sake of the economic health of this country.
by | CONSTITUTION, FREEDOM, GOVERNMENT, OBAMA, OBAMACARE
The basic premise that everyone should be protected in case of serious illness or injury with appropriate insurance is not an unsavory idea. But the concept of an individual mandate does nothing. Not only does it not help with that problem of encouraging everyone to carry coverage, it confuses the entire idea of what “health insurance” is or is supposed to be — so much that it affirmatively discourages or reduces the likelihood that people will have insurance. I propose that the concept of health insurance should only really be related to major medical situations, like other true “insurances”.
The individual mandate is both unconstitutional and ineffective because it leads to a poor allocation of resources. In order to understand why, it requires an understanding between the difference of real health “insurance” and what currently counts as health insurance (a broad medical coverage plan).
Insurance, by definition, is a payment of a premium to cover the very unlikely event that would result in high economic consequences. Therefore, it has the effect of relatively low premiums to protect against that economic possibility.
In contrast, what counts as medical insurance in this country is a small portion of real insurance, but is largely pre-paid medical care: you pay your monthly premium which you get back every time you go to the doctor because you’ve already contributed x so many dollars a month which covers the doctors’ fees (minus a “co-pay” or “deductible”). It’s not an efficient practice, however, nor a cost-effective one. It gives the false impression that going to the doctor is cheap, when in reality, you’ve already paid in advance for doctor visits – that you may or may not have.
This is in contrast to other types of true insurance. I submit it is necessary to remodel the health insurance system after other insurance sectors – such as life, fire, or home insurance. For instance, it is both accepted and reasonable that you will pay more for life insurance at the age of sixty than at twenty-five. The reason for this practice is the understanding that the risk is higher.
Likewise, people buy fire insurance because the economic loss is from a fire is extraordinarily great and the cost for coverage is relatively low. But even with fire insurance, you pay more if you home is made of wood and not brick, and if you live farther from a fire station than closer — that is the matter of risk.
Everyone should have routine doctor visits. If everyone paid for those out-of-pocket, it would be more economically viable, because one would only be paying for what he needed – and would probably result in more healthy citizens who have an economic incentive to take better care of themselves. Instead, the government intentionally combines and obfuscates the meaning and definition of insurance to include medical coverage or routine costs. The only people who truly need that are the same people who can’t afford anything — and should be treated like those who can’t afford routine food.
You don’t need insurance to go to a doctor. That is welfare. For the average person who pays 15-20K a year of medical coverage, a very large percentage of the cost is not insurance – it’s the prepaid care for a larger pool of people. Therefore, individuals are really overpaying when it is set up this way because the real insurance part is intentionally combined with health care so you can hide the cost of those with higher risks, i.e the cost is buried within premiums.
The term “individual mandate” is intentionally confusing. The individual mandate — as the administration would describe it — is a requirement that everyone buy their own health insurance. The basic concept of everyone having their own health insurance is not, in and of itself, terrible — if health insurance were actually insurance in the same way life or fire insurance are. Obama Care, however, is not and therefore the individual mandate is not a mandate to buy health insurance as we’ve been told — it’s a mandate for universal and pre-paid medical care.
Since people of different ages, medical conditions, pre-existing situations, etc have different anticipated costs, the purpose of an individual mandate has nothing to do with getting people to buy their own insurance. It is the forcing of individuals to buy into a system that makes people pay for medical treatments that are not theirs, support welfare, and overpay for services in order to create a coverage that is similar for all person. That is legal plunder and anti free-market. The health care industry would best serve our citizens if Obama Care and the individual mandate was rescinded and if it restructured health insurance as a ‘true insurance’.
