HOUSTON, November 15, 2013 — President Obama needs young and healthy people to buy expensive health care policies they do not need on the exchanges in order to subsidize the old and the sick. He needs America to blame insurance companies, and not the government, for all the problems with Obamacare. And he needs — after the inevitable failure of the exchanges — America to trust the government enough to accept being placed on Medicaid or another government-run health insurance program.
If all three things do not occur, the progressive dream of single-payer healthcare will die.
If healthy people do not buy insurance through Obamacare, a disproportionate number of the elderly will be left to buy Obamacare insurance policies; their premiums will have to rise dramatically. As premiums rise, even more young and healthy people will drop out or choose not to enter the exchanges. This leaves only the old and sick in the exchanges, with extremely high premiums. This eventually leads to the old and sick leaving the exchanges as well, putting Obamacare out of business.
In the insurance industry this is known as a “death spiral.” Obamacare, however, includes the individual mandate, which is supposed to force the young and healthy to buy expensive policies they do not need in order to subsidize the old and sick, or pay a fine.
There are two reasonable concerns that young and healthy people may have at this point, and both can be almost completely alleviated. First, it is always a concern going without health insurance, even for very healthy individuals. Obamacare, however, does not allow insurers to discriminate because of pre-existing conditions. This means that healthy people can wait until they get sick to buy insurance, and still pay the same price for it as they would have before they got sick. This would be analogous to the car insurance industry allowing consumers to buy insurance that will cover accidents that have already occurred. Only the government would set up a business model this excruciatingly incompetent.
Another issue is the fine that individuals who fail to purchase insurance must pay to the IRS. In 2014, the penalty is $95 or 1 percent of gross income, whichever is greater. The law does not allow government to use its usual mechanisms for collecting back taxes — liens, fines, garnishing wages or filing criminal charges — to collect the individual mandate penalty.
In fact, the only recourse the law provides for the government to collect this tax is to take it out of an individual’s tax refund, and the government has not even indicated whether it will do this. So, as of this moment, there is no material way for the government to collect this penalty. If they do collect it through tax refunds, it will disproportionately hurt the poor and middle class, which seems to be a distinct pattern emerging with this law. With all of the anger and frustration building towards the administration, it would be a drastic mistake to take this tax out of Americans’ tax refunds.
The first thing that Americans opposed to socialized medicine must be ready to do is to win the argument against the White House talking points. During his press conference on Thursday, Obama made very clear what this argument will be when he said, “And — and so what we want to do is to be able to say to these folks, you know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan.”
Obama is aware that his unconstitutional, extra-legal “fix” will not stop the cancellations from going out. He has just given the Democrats some political cover and will turn all of his guns on the insurance industry now. Americans must focus the argument on the government’s responsibility for the failure.
Two key points are important here. First, the administration released regulations following the passage of the law that greatly restricted the plans that could be grandfathered in. If a plan changes its copays by even five dollars a month, it loses its grandfathered status and must be cancelled. This was done to force the young and healthy off of their current plans and into the exchanges, thus subsidizing the old, rich and unhealthy.
Second, most plans offered prior to Obamacare do not meet the minimum standards to become “Obamacare compliant.” Obamacare requires individuals to buy coverage for things that they certainly won’t need in order to subsidize others who do need them. For example, senior citizens are required to have maternity coverage. Their insurance companies are not forcing them to buy it because they think all plans should include it; Obamacare forced them to do this.
Another thing individuals can do to stop the spread of socialized medicine is to be ready for the collapse of the Obamacare exchanges in the coming months. We must not allow the government to force all Americans onto Medicaid or a similar government-run program. This was the goal of the left when Obamacare was designed. They knew these exchanges would fail, just not this soon or this spectacularly.
The progressive left’s ultimate goal is to destroy the private insurance market and force Americans onto government run insurance. That can be prevented if enough Americans remember the astounding incompetence of government to administer such a complex program. When Obamacare collapses, Americans must be unyielding in their rejection of government control of our healthcare. If they are, lawmakers will have to listen.
If America stops the Democrats from taking over the healthcare industry when Obamacare fails, modern liberalism will be set back decades. The ever-growing centralized government bureaucracy will begin to unravel, and the trust Americans have in progressive, statist ideology will evaporate.
President Reagan best sums up the extreme importance of this. In his speech A Time for Choosing from October 1964 he said, “”You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness. If we fail, at least let our children and our children’s children say of us we justified our brief moment here. We did all that could be done.”
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