November 17, 2011

What to do if the Supreme Court approves the individual mandate

Sam Smith

It was clear from the start that the healthcare individual mandate was a price the Obamites thought they had to pay the insurance companies to get them to shut up about the overall healthcare measure. It’s what they call pizzo in Sicily.

And it worked. As Peter Suderman notes at Reason, "According to a Supreme Court brief filed by the insurance industry's biggest lobbying group, the industry doesn't oppose the law—just so long as it includes the most constitutionally dubious provision, a mandate to purchase health insurance."

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

The political battle then needs to shift. We’ll be stuck with it, but that doesn’t mean the insurance companies – which offer no real health benefit to the American people – still have to get their their payoff.

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.

No comments: