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If Republicans are serious about gumming up the gears of Obamacare, and eventually seeing the reform metastasize and the law repealed, there is one simple, shrewd, and potentially very effective option open to them. They can delay the individual mandate.
This boils down to basic math. The provisions of the Affordable Care Act (and I think we should call it that, not “Obamacare”: it’s an act passed by Congress) work only through expanding coverage, and by extension, the pool of premiums from which to draw for those who get sick or injured. This is why there has been so much fervor about how the young and healthy are getting the raw deal here; because there is a lesser chance that they will get sick, there is less incentive for them to pay into the system. The ACA controls for this in effectively two ways. First, it allows young people to stay on their parents’ plans until their 26th birthday, thereby easing the youngest and healthiest’s (YAH’s) entrance into the pool. Secondly and more crucially, it imposes a penalty on anyone above that age who does not sign up. This is the mandate.
If you are uninsured and do not find coverage by April of next year, you will be fined roughly $100, and this amount will increase over time. Consequently, through the mandate, the federal government offsets the incentive for YAHs to forgo entering the system. In Republican Oklahoma, for instance, the cheapest policy is $96/month. You can either pay that (and get health insurance), or just fork over a C-note to Uncle Sam (and get nothing).
Thus the imposition of a penalty does change the calculus for the 60 million people who are currently uninsured and must decide whether to browse for a policy on the exchange, or just pay a fine.
This is why the mandate is the key piece of the intricate Obamacare puzzle: it tilts that cost-benefit scale towards signing-up for a policy. If YAHs do not have to buy insurance, then many of them will not buy it. Moreover, if YAHs are not paying into insurance pools crowded with sick and elderly policyholders, then those insurance schemes will inevitably fall apart, as premiums will begin to rise in relation to the number of YAHs who remain uninsured.
It’s the same reason why a casino must keep in reserve enough money to cover all bets on all tables: in the off chance that everyone hits blackjack, you will have to pay out more cash than you just took in. And a health insurance system disproportionately constituted of sick and elderly policyholders will inevitably see a lot of people cashing out. Such a system is unsustainable; that casino will go out of business.
As the Robert Wood Johnson Foundation revealed in a new study, if you were to remove the incentive for healthier people to obtain health care coverage, “between 40 and 42 million would remain uninsured as opposed to 26 million,” and “individual premiums… would increase by 10 percent in a scenario assuming high exchange participation and by 25 percent with a low participation scenario.” In other words, without a mandate, there will be fewer YAHs paying for coverage; with fewer YAHs paying for coverage, premiums for everyone will skyrocket. As a result of this, the two central tenets of the ACA – the “Affordable” and “Care” parts – will quickly fall by the wayside.
Thus Republicans should treat the mandate as the foundation upon which the rest of the ACA is built. If they want to bring down the entire apparatus, swing the GOP wrecking ball at the mandate, and the whole system will eventually crumble in response. Sure, last July the Supreme Court ruled 5-4 that the penalties the law imposes on those who don’t buy health insurance count as a tax, and are therefore protected by the Constitution; but this does not mean that the mandate is untouchable, merely that it is not illegal.
Moreover, Congressional Republicans have nothing to lose in throwing all of their considerable political weight towards delaying the mandate. Americans are highly suspicious of Obamacare, and will have little tolerance for its initial defects and inefficiencies. With the government shutdown and debt-ceiling negotiations on every front page, Republicans missed their chance to frame the recent glitches in the on-line exchanges as merely a foretaste of how a once-working healthcare system has been arrogated by a sluggish bureaucracy. But there is still a chance to reclaim the narrative. After all, all you are asking for is a delay, not a repeal. This is a “mend it” approach, not an “end it” one. It looks far more constructive than the radical intransigence we have seen from the Tea Party Caucus, which seems to have preferred to force millions out of work, forfeit $24 billion dollars of our GDP, and risk our economic standing in the world, all for the impossible chance to abolish – rather than amend – the law.
Numerous polls show that this strategy has not played into the hands of Republicans. The willful shutdown of the federal government, Ted Cruz’s faux-filibuster (‘Ted Talks’), and John Boehner’s inability to corral his own conference have attracted hostile attention to the GOP — attention which was only a few weeks ago fixated on a Democratic administration reeling from one of the most scandal-ridden first years in the history of the modern Presidency.
Yet there is a second and very crucial aspect by which the GOP’s campaign to delay the mandate will reap short- and long-term benefits for the party. This relates to the way in which a repeal – or at least the optics of an attempted repeal – will play with young people, a cohort of voters which has, especially in the last eight years, trended heavily toward the left. Like many issues (e.g. rethinking the drug war) which the Party of Small Government could claim as their own, and by doing so energize young voters, delaying the mandate will, in the short term, be looked upon favorably by those who do not want to buy health insurance. In the long run, it will collapse a system which has been the centerpiece of the Democratic agenda for almost twenty years.
It’s the easiest argument in the world: “Look, Obamacare is not ready for prime-time. The American people cannot even sign up on the exchange websites – so why punish them for not getting coverage? We will refrain from trying to repeal the law, so long as you refrain from immediately imposing the mandate.”
It’s the Trojan horse of policy arguments: if they refuse it, they look ungrateful. If they accept it, they won’t know what they’ve lost until it’s too late.
For the record: I think we should implement the ACA and try to fix kinks where we find them, rather than ruin parts of it or repeal the whole thing. Still, if Congressional Republicans were more savvy they’d consider the approach outlined above.