Repeal the Individual Mandate of Obamacare

Obamacare is chock full of unpopular policies. But few have attracted as much widespread animosity as the “individual mandate,” which requires all adults to purchase health insurance or pay a fine. The most recent Rasmussen poll puts opposition to the mandate at 54 percent of likely voters – including 41 percent who strongly oppose it.

Congress must pay heed to the voters’ rancor by repealing the individual mandate. Not only will this requirement fail to achieve universal coverage, it also represents an egregious assault on our economic liberty.

Individual states have already begun fighting the individual mandate. Last week, nearly three-quarters of voters in Missouri approved a ballot initiative nullifying the mandate in their state.

No less than 20 state attorneys general and the National Federation of Independent Business have challenged the constitutionality of the mandate. Just days before the Missouri vote, a federal judge ruled that Virginia’s lawsuit against the federal government could proceed.

Even some Democrats have expressed opposition to the mandate. No less a Democratic luminary than former DNC Chair Howard Dean recently admitted that the mandate may be unconstitutional and predicted that it would eventually be scrapped.

Here’s how the mandate works: Starting in 2014, all Americans will be required to have health insurance or pay a fine. The penalty will escalate from $95 or 1 percent of taxable income in 2014 to $695 or 2.5 percent of taxable income in 2016.

During the run-up to Obamacare’s passage, the White House claimed that the individual mandate would lower healthcare costs by expanding the insurance pool. The young and healthy — many of whom currently go without coverage – would be forced to buy into the system and would help subsidize care for the aged and infirm.

But most of the uninsured – particularly the young and healthy – don’t go without coverage because they’re irresponsible. They opt not to purchase insurance because it’s too expensive.

Obamacare does little to make insurance more affordable. In fact, with all its new mandates requiring no-cost preventive care, low annual deductibles, and coverage for adult children up to age 26, the health reform law will actually raise premiums. Indeed, the Congressional Budget Office has estimated that individual insurance premiums under reform will be 10 to 13 percent higher by 2016 than they would be in the absence of reform.

By the time the mandate is in full effect, the average individual insurance policy is expected to cost about $5,000. For many Americans, it will make far more sense to forego insurance and pay a small fine than to fork over several thousand dollars for insurance they’ll never use.

Many residents of Massachusetts came to exactly that conclusion when the state mandated insurance coverage as part of its 2006 healthcare overhaul.

Four years later, 168,000 Bay State adults still don’t have health insurance. More than half of them — 97,000 – did not buy insurance even though they could afford a policy, according to the state Department of Revenue. Of those, 86,000 paid the penalty, and 11,000 appealed it.

Clearly, many in Massachusetts bristled at the notion that the government could force them to buy an expensive product that they may not have wanted. Residents of the other 49 states will no doubt feel the same way – particularly when the U.S. Constitution does not grant the federal government the power to force people to purchase goods and services from the private sector.

The Obama Administration initially justified the individual mandate by pointing to the federal government’s power to regulate interstate commerce. This is an unprecedented way to interpret that power. After all, it’s hard to see how an individual’s refusal to buy insurance – and thus his refusal to participate in commerce – somehow compels the feds to act under the commerce clause.

The White House now claims that the individual mandate fits within Congress’s power to tax. But that’s not how the provision was sold to lawmakers or the American people. If the mandate had been presented as a tax, it probably wouldn’t have garnered enough votes to become law.

There are better ways to expand insurance coverage than by legally requiring folks to have it.

One way of doing so? Lower the cost of insurance by states scaling back benefit mandates. Currently, there are nearly 2,000 state mandates that dictate what treatments health insurance policies must cover, including such non-essential benefits as hair plugs, breast reduction, and in- vitro fertilization. On average, benefit mandates inflate the cost of insurance by 10.5 percent. Rolling back mandates could save consumers millions of dollars.

The individual mandate is an unconstitutional intrusion on the rights of American citizens. And it won’t lead to universal coverage. Lawmakers should repeal it as soon as possible.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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