Looks like mandatory health insurance coverage is, well, VOLUNTARY … no kidding

Once again, Speaker Pelosi was right “You’ll find out what’s in the bill when we pass it”.

Take the individual mandate: the provision that requires all people carry health insurance — even healthy non-consumers of health case services. They must play for ObamaCare’s fragile economics to work.  You see, it’s these people overpaying for their health insurance (i.e. premiums far exceed claims) that subsidizes the heavy users (i.e. claims far exceed premiums).

More than a dozen states have united to test the constitutionality of the individual mandate, arguing that the Feds can’t compel citizens to buy specific products simply as a condition of citizenship.  Feds argue that they can based on the supremacy (of Fed over states) and commerce (Feds can regulate interstate commerce) clauses in the constitution.

Regardless of how that turns out, there’s an interesting twist: though folks will be asked to ante in tax fines on their 1040s if they haven’t bought health insurance, the bill explicitly bans the IRS from enforcing the law.  There can be no criminal or civil penalties, no liens or seizures (whew, citizen’s big screen TVs are fancy cars out of reach), and no penalties or interests. 

The law is enforced by the ever powerful word “PLEASE”.

* * * * *

Excerpted from Verum Serum, The Individual Mandate Farce, March 25, 2010

One of the more controversial elements of ObamaCare is the mandate for most individuals to purchase insurance beginning in 2014.

Democrats who orchestrated the passage of this bill are mandating not only that the young and healthy obtain insurance, but also that even their most fervent liberal constituents must purchase this coverage from the evil, private insurance industry.

Republicans for their part have focused on the fact that this mandate will be enforced via threat of a financial penalty (or tax), with the added assumption that it is the dreaded IRS which will be enforcing this. And sure enough, it’s already been reported that the IRS anticipates hiring possibly in excess of 15,000 additional personnel to deal with the collection of the individual mandate, and other tax related provisions within the bill.

However, it turns out that the Democrats who crafted this bill hamstrung the ability of the IRS or any other federal agency to enforce or collect on this mandate. Here is what the federal Joint Committee on Taxation had to say about this issue in a report released earlier this week:

Individuals who fail to maintain minimum essential coverage in 2016 are subject to a penalty equal to the greater of: (1) 2.5 percent of household income in excess of the taxpayer’s household income for the taxable year over the threshold amount of income required for income tax return filing for that taxpayer under section 6012(a)(1);67 or (2) $695 per uninsured adult in the household. The fee for an uninsured individual under age 18 is one-half of the adult fee for an adult. The total household penalty may not exceed 300 percent of the per adult penalty ($2,085). The total annual household payment may not exceed the national average annual premium for bronze level health plan offered through the Exchange that year for the household size…

The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.

“Subtitle F of the Code” is the portion of the tax code which grants the IRS the authority to assess and collect taxes.

In other words, as the law is written the federal government has no legal authority to enforce this mandate, nor will it have any recourse to collect any penalties that go unpaid!

This is bad news for those who believe in the merits of the mandate and the bill in general.

Without an effective mechanism of enforcing the individual mandate, the entire system is likely to collapse.

WHY WOULD ANYONE OBTAIN INSURANCE COVERAGE PRIOR TO NEEDING IT? This was already going to be a problem with the relatively low cost of the penalty, but take away any meaningful enforcement of the individual mandate and it is a complete and total joke.

The net result will be an ever increasing shift of healthcare costs on to those who remain in the insurance system (or to tax payers), and possibly even the bankruptcy of the insurance industry.

Nice work guys.

Full article:

2 Responses to “Looks like mandatory health insurance coverage is, well, VOLUNTARY … no kidding”

  1. librado Says:

    If it is not enforcable then why put a penalty on it? Would the penaltys be marked on your credit score? People can hardly pay their bills theese days why increase taxes?

  2. Kent Markowitz Says:

    That is a excellent point to bring up.

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