March 27, 2012

What to do after the Supreme Court rules on Obamacare


Sam Smith

It’s a little funny that we should be debating Obamacare so fiercely right now, given that its fate will be determined by a Supreme Court that could care less what we think.

That decision – either way – will make a big difference in how we move on. So it’s worth considering some alternatives.

As I asked last November:

“It’s unconstitutional and it’s the political equivalent of a payoff to the mob, but what if the Supreme Court approves it?”

My answer then, and now:
|||| The best solution would be to switch the individual mandate from private firms to Medicare. Simply add a category, something like “Obamacare refugees.”

But wouldn’t that add substantially to Medicare’s fiscal problems?

Not likely. Remember, private insurance companies don’t lobby for something that doesn’t make them a good deal of money. One reason for this that no one talks about is that the uninsured pool includes a large number of younger people who don’t get sick as often. Seniors account for 60% of all healthcare spending and 74% of all prescription drug purchases according to one analysis.

While the available data is atrocious on this issue that Obama and his embedded liberals like so much, here are some rough figures based on data from Kaiser, the CBO and elsewhere:

- In 2008 the uninsured cost the government about $41 billion.
- Non-paying uninsured numbered around 43 million.
- The mandate would cut this figure roughly in half.
- The CBO estimated that a single person would have to pay about $5200 to meet the demands of the mandate. The cost for a family of four would be about $3025 for each member.

Let’s say that the uninsured cost the government about $1,000 a head for healthcare, yet (using the lower figure) the insurance companies are getting about $3000.

You can now see both the problem (even if the insurance companies offer decent policies which they won’t) and why the Medicare solution makes sense. ||||
But what if the Supreme Court recognizes the unconstitutionality of the mandate? That doesn’t have to be a disaster., As Peter J.Boyer put it in the Daily Beast, “A Supreme Court invalidation of the individual mandate, the feature that Americans find most odious, would allow Obama to embrace the issue anew, focusing on those portions of the reform that most people actually like.”

And Robert Reich offers a good solution:
|||| The dilemma at the heart of the new law is that it continues to depend on private health insurers, who have to make a profit or at least pay all their costs including marketing and advertising.
 Yet the only way private insurers can afford to cover everyone with preexisting health problems, as the new law requires, is to have every American buy health insurance - including young and healthier people who are unlikely to rack up large healthcare costs. . .

Unhappily for Obama and the Democrats, most Americans don't seem to like the individual mandate very much anyway. Many on the political right believe it a threat to individual liberty. Many on the left object to being required to buy something from a private company….

Americans don't mind mandates in the form of payroll taxes for Social Security or Medicare. . .

There's no question payroll taxes are constitutional, because there's no doubt that the federal government can tax people in order to finance particular public benefits. But requiring citizens to buy something from a private company is different because private companies aren't directly accountable to the public. They're accountable to their owners and their purpose is to maximize profits. What if they monopolize the market and charge humongous premiums? (Some already seem to be doing this.). . .

So why not Medicare for all?

If the Supreme Court strikes down the individual mandate in the new health law, private insurers will swarm Capitol Hill demanding that the law be amended to remove the requirement that they cover people with pre-existing conditions.

When this happens, Obama and the Democrats should say they're willing to remove that requirement - but only if Medicare is available to all, financed by payroll taxes.

If they did this the public will be behind them -- as will the Supreme Court.

3 comments:

BARBBF said...

Sam I don't have many friends who are over 65, but one of them who is in her 80s and has 2 friends in their 70s told her that their physicians have already told them they would no longer be accepting Medicare patients. I don't have Medicare..but do find this scary.

Anonymous said...

From coverage in the UK:
"But back during the 2008 campaign, Obama argued strenuously against the individual mandate. In a debate in South Carolina, he said: "A mandate means that in some fashion, everybody will be forced to buy health insurance. ... But I believe the problem is not that folks are trying to avoid getting health care. The problem is they can't afford it. And that's why my plan emphasises lowering costs."

In February 2008, he said that you could no more solve the issue of the uninsured with an individual mandate than you could cure homelessness by ordering people to buy a home..."
http://harndenblog.dailymail.co.uk/2012/03/supreme-irony-obamacare.html

Anonymous said...

From coverage in the UK:
"But back during the 2008 campaign, Obama argued strenuously against the individual mandate. In a debate in South Carolina, he said: "A mandate means that in some fashion, everybody will be forced to buy health insurance. ... But I believe the problem is not that folks are trying to avoid getting health care. The problem is they can't afford it. And that's why my plan emphasises lowering costs."

In February 2008, he said that you could no more solve the issue of the uninsured with an individual mandate than you could cure homelessness by ordering people to buy a home..."
http://harndenblog.dailymail.co.uk/2012/03/supreme-irony-obamacare.html