Could ObamaCare Make The Uninsured Problem Worse?
Tuesday, July 31, 2012
from Investors Business Daily – John Merline -
When President Obama was selling health reform, he often talked about providing universal coverage. But a Congressional Budget Office report out this week finds that goal getting more elusive.
The report found that despite ObamaCare’s $1.2 trillion price tag, it would only cut the ranks of the uninsured in half, leaving 30 million without coverage. That’s seven million more uninsured than the CBO first projected in March 2010.
The latest downgrade comes in the wake of the Supreme Court ruling, which gave states the freedom to reject ObamaCare’s massive expansion of Medicaid. Since then, governors in more than 25 states have said they will refuse to expand Medicaid or are leaning in that direction, despite the generous federal contributions.
But the uninsured problem under ObamaCare could be much worse than the CBO projects.
What the report doesn’t cover is the fact that the other legs of the ObamaCare stool designed to expand insurance coverage — the individual mandate, the employer mandate and the state insurance exchanges — are also buckling.
As a result, ObamaCare will likely cover far fewer uninsured than advertised. There’s even a chance that, if all goes wrong, it could actually make the uninsured problem worse.
The individual mandate, for example, is a cornerstone of ObamaCare’s effort to expand coverage. But tax experts who’ve studied how the IRS will enforce the mandate conclude that it’s likely to be ineffective, because the law makes it virtually impossible for the IRS to collect the tax penalty from those who don’t pay it.
Under normal circumstances, the IRS has broad powers to collect taxes from those who don’t pay what they owe. It can charge civil and criminal penalties, impose liens, and seize assets and bank accounts.
But ObamaCare specifically blocks the IRS from using these enforcement tools when it comes to collecting any unpaid ObamaCare tax penalties.
These restrictions “make it unlikely the IRS can effectively enforce the individual mandate,” according to a detailed analysis of the tax penalty by Jordan Barry and Bryan Camp, law professors at the University of San Diego and Texas Tech University, respectively.
“The individual mandate,” they conclude, “may not actually be mandatory after all.”
The problem is that if the mandate doesn’t work, ObamaCare could make the uninsured problem worse, at least in the individual insurance market.
That’s because ObamaCare’s insurance market reforms — called “guaranteed issue” and “community rating” — force insurers to cover anyone, regardless of their health status, while forbidding them from charging the sick more than the healthy.