Thoughts from Richard Epstein on overregulation, and trying to solve it by worse regulation.
32 thoughts on “ObamaCare’s Slow Death”
Comments are closed.
Thoughts from Richard Epstein on overregulation, and trying to solve it by worse regulation.
Comments are closed.
You had heard it from me first. Not only will the Affordable Care Act be repealed, it is already being repealed piecemeal, but that President Obama is the person doing the repealing.
The argument was treated dismissively by Jim, because Jim. What I said was not only regarded as another wrongheaded thing I say around here, my statements were offensive to other forum participants who are among the narrow minority of the population having to purchase health insurance under its strictures.
A big piece of the ACA was (I use past tense) the Employer Mandate. That can got kicked down the road — by President Obama using (newfound) executive powers. Does anyone here think that “they” are going to start tightening the screws and enforcing it at this point? Don’t know, maybe with cheap gas prices, the economy will get healthy enough to do this. I mean it has been “after the election” but it is always “after the election”, and does Mr. Obama want to make things difficult for his Sec State in 2016?
Anything is possible, but all the Act has been so far is 1) making Medicaid available for more people, but that has up and down sides to the people getting it, 2) making life miserable for those relying on paying for their own insurance, with or without qualifying for the subsidies, and 3) solving Jim’s needs.
OK, people, take it away! Let’s see if we can bust the Internet with this thread . . .
all the Act has been so far
It’s dropped the uninsured rate from 18% to 12.9%. It’s reversed the trend that saw medical bills causing financial hardships for a growing share of the population:
Wow, you’re comparing 2012 to 2014? That’s like saying a decayed apple is less stinky once it’s dried out.
Looking at the same graph you’ve linked, it’s gone back roughly to pre ACA levels.
And the number of people in default on their mortgage is going down from 2012 to 2014, too. The ACA really IS a miracle drug, if it can fix that many things!
Oh, wait, the economy is just recovering? Nah, that can’t POSSIBLY be why more people can afford to pay medical expenses; that can’t be it at all!
I certainly hope to be a cause of it’s death. Since I no longer have health insurance, I have to pay a hundred bucks as a penalty on my tax form. (Logic: you can’t afford to buy health insurance, so we’ll take more money you don’t have.)
However, the penalty is far cheaper than the money I would have put into the pool, money that only would have gone to subsidize Jim and all the others who have enough money to buy their own but want to get it cheaper off the backs of the poor.
Logic: you can’t afford to buy health insurance, so we’ll take more money you don’t have
If you can’t afford to buy health insurance — if there isn’t a policy that you could buy for 8% of your income — you are exempt from the penalty.
Gee, thanks. That just solves everything.
I would venture to guess that Jon’s income is larger than $1,250, which is what he’d have to be making for a $100 penalty to be cheaper than 8% of his income.
That’s not a very high hurdle to clear, even in street shoes. With a “penalty” that low, why even bother getting coverage, even if one *can* afford it?
I liked the story in today’s local paper about the extra surcharge that H&R Block and other preparers are charging for people who purchased ACA-elected coverage through exchanges; it doubles the amount of time and paper that it takes to prepare a return. I’m sure those who can barely afford coverage can afford the extra filing fees, right? Or will they get subsidized, too?
I would venture to guess that Jon’s income is larger than $1,250, which is what he’d have to be making for a $100 penalty to be cheaper than 8% of his income.
There’s no question that the penalty is usually less expensive than a year of health insurance. The point is that the penalty only applies to people who have enough income to afford insurance, but choose not to buy it.
Jim,
There’s a new law that now requires you to own a firearm. After all, the right is in the constitution, and there is evidence that ownership improves the public safety. You may disagree with that, but I will show you links from the NRA that always prove my point.
If you don’t own a firearm, I will charge you 400 dollars a year.
It’s for your own good.
There’s no question that the penalty is usually less expensive than a year of health insurance. The point is that the penalty only applies to people who have enough income to afford insurance, but choose not to buy it.
Then it’s a wholly ineffective penalty.
Generally, the way a “penalty” works is that the cost of the penalty is supposed to be higher than the cost of compliance, thus encouraging compliance.
If the penalty is less than the cost of compliance, why bother complying? It’s a completely transparent admission that any or all of the following are true: a) the cost of compliance is too high to begin with (true, in the case of ACA’s required coverage plans), b) the penalty is just a cash-grab for redistribution (also true in the case of ACA), c) the person writing the rules doesn’t know how penalties are supposed to work (true), and/or d) the person writing the rules wasn’t serious about actually gaining compliance with their rules (also likely true).
For people filing their taxes for 2014, the penalty is the higher of: 1% of income above $10,000 or $95/person in the household. For an individual making $40,000/year, that’s a $300 penalty, assuming no other deductions to lower that taxable income.
Since a perfectly healthy mid-20-something individual can no longer get a “catastrophic” plan, like my brother had for years after college while working as a freelancer, if that person is still in good health, why even bother looking for coverage? It’s only 300 bucks, for the ENTIRE YEAR. The penalty for 2015 will be 2%, or $600, and in 2016 will be 2.5%, or $750.
The lowest plan I found on the ACA’s estimator for a healthy 28 year-old, non-tobacco-user, non-pregnant, non-high-risk, was $190/month, for Bronze coverage. No Catastrophic was offered, even though the age is under 30 (which is the maximum age for Catastrophic offerings under the ACA).
Until the cost of compliance comes down to the sub-$100/month range, there is NO incentive for a healthy person to subsidize the health costs of the rest of the nation through the Individual Mandate. And from an actuarial standpoint, penalties lower than the cost of compliance can’t possibly be financially sustainable, either, even with those individuals out of the receiving end of the whole scheme.
Generally, the way a “penalty” works is that the cost of the penalty is supposed to be higher than the cost of compliance, thus encouraging compliance.
The goal is to get more people to buy insurance. Massachusetts found that even a very small penalty, much lower than the cost of compliance, was enough to get almost every eligible person insured. Maybe the national experience will be different; we’ll see.
If the penalty is less than the cost of compliance, why bother complying?
Because complying gives you health insurance. Having insurance has always cost more than not having it.
No, compliance gives YOU better coverage. Let’s call this what it is, cheaper insurance for Jim. It’s really remarkable (and quite disgusting) watching the left take more and more for themselves under the guise of moral superiority.
Eventually Jim, will you take me to a gulag for non compliance?
It’s really remarkable (and quite disgusting) watching the left take more and more for themselves
Since when did people with pre-existing conditions become synonymous with “the left”? Tea partiers with ominous health histories get cheaper insurance too.
Since when did people with pre-existing conditions become synonymous with “the left”? Tea partiers with ominous health histories get cheaper insurance too.
It’s all about pre-existing conditions? Seriously? That’s what you think? They could have gone into medicaid or received vouchers. Done. It didn’t take a 2500 page bill to take care of that.
No, it’s all about control, Jim. And it hasn’t gotten cheaper. You’re just too stubborn to see the reality.
It’s all about pre-existing conditions? Seriously?
Here’s how you described the ACA: “Let’s call this what it is, cheaper insurance for Jim.” The only reason the ACA made insurance cheaper for me is my pre-existing conditions. You object to the ACA making insurance cheaper for people with pre-existing conditions, and characterize it as a give-away to the left, but pre-existing conditions have nothing to do with the patient’s political beliefs.
but pre-existing conditions have nothing to do with the patient’s political beliefs.
Ha! (In your words.) Yes they do. Because you are a lefty, you needed a 2500 page bill to solve the problem of pre-existing conditions. You’re so stuck in the mindset of free-market bad, monster-size progressive government good, that you instinctively went head cheerleader for the Left. You shut out the Republicans on every debate and you refused to listen to any other solutions.
And here’s the problem: you despise big military and its cronyism yet you encourage the same in medicine. All the problems that you wring your hands over with regards to the military will happen with medicine, because you allowed the State to take over 15 percent of the economy. We’ve given you evidence of cronyism, yet you close your eyes and shout, “la la la” to drown out the voices of reason.
Refusal to listen to republican ideas shows pure selfishness on your part. You really just want to dig your Progressive claws into our lives. A history of your comments reveals just how obstinate you are. You assume you are always correct and we should do what you tell us to do.
And yet, as you claim to be a champion of the poor, you hire a foreigner for your company rather than train an American. You don’t want to spend the money to train someone for your job. That’s cheap and it’s revealing to your true nature.
Refusal to listen to republican ideas shows pure selfishness on your part.
LOL. Obamacare is a thoroughly Republican idea, courtesy of the Heritage Foundation and Mitt Romney.
The Democratic party loves Republican ideas. It wants cap-and-trade for greenhouse gases, an idea pioneered by G.W.H. Bush for acid rain. It wants to expand Reagan’s earned income tax credit, and follow his lead on immigration reform. It’s the GOP that runs away from anything touched by Democrats.
And yet, as you claim to be a champion of the poor, you hire a foreigner for your company rather than train an American.
I don’t claim to be a champion of the poor, or any more moral than the next person. I certainly didn’t hire an immigrant to make a moral point, I just hired the person with the best qualifications (I’ve hired Americans for other positions because they were the best candidates in those cases). But your charge is an odd one — aren’t foreigners generally poorer than Americans? Why would a “champion of the poor” go out of his way to hire Americans instead of foreigners?
Obamacare is a thoroughly Republican idea, courtesy of the Heritage Foundation and Mitt Romney.
This is complete BS. The only thing “Republican” about it is that one or two “Republicans” came up with the mandate. The other thousands of pages are a purely Democrat mess, that no Republican voted for.
The only thing “Republican” about it is that one or two “Republicans” came up with the mandate.
Obamacare has three major parts: the requirement that insurers make insurance available to everyone at a price that is not affected by their health history, the mandate that all individuals have insurance that meets a certain standard, and subsidies to make insurance available to those who otherwise couldn’t afford it. All of these elements were in Romney’s health care reform. The fact that the GOP made a strategic decision to oppose those ideas in 2009, in a political attempt to make health care reform Obama’s “Waterloo”, does not change the fact that the law was based on GOP ideas.
The fact that one “Republican” with no discernible political principles came up with a terrible law doesn’t make it a “Republican” plan. It remains BS to call it that. If a President Romney had proposed it, it would have met just as much opposition from actual Republicans.
No, you have to pay _at least_ that much, _this year_. It could be more. Next year, it _will_ be more.
Indeed — I’d be surprised if anyone pays a penalty as low as $100. That would be the penalty for an individual with an income of $10,000, but anyone with that little income can avoid the penalty altogether.
I’m sorry, that’s wrong. It’s 1% of your income above the tax return threshold for your filing status, which is $10,150 for a single individual under 65. So you’d have a $100 penalty if your income was $20,150, and you could get insurance for $134/month or less but chose not to.
you could get insurance for $134/month or less but chose not to.
That $30/mo – $134/mo is only after tax credits. Before tax credits, the monthly range is still $190-$290/mo, which one must choose to either pay out-of-pocket, or file gobs and gobs of paperwork to try to get pre-paid direct to their insurer, and then file even more gobs of paperwork with their taxes to reconcile the following year. For those who take their returns to H&R Block, Liberty Tax, or other preparers, this extra paperwork for ACA more than DOUBLES their return preparation fees, so add another $50 or more to the annual cost of the plan.
Again, at $134 PER MONTH, why would an otherwise healthy person bother paying for coverage if they could otherwise spend that money on rent, food, or other essentials that will undoubtedly be difficult to cover making only $20,150/year?
$20,150 / 12 months * 70% take-home = $1,175/month take-home.
Even assuming a rather modest $450/mo for rent, $150 for utilities, $150 for food, $50 for cell phone, and $100 for gasoline, that leaves MAYBE $275/mo in “discretionary” spending, most of which will likely also be eaten up by mandatory automobile insurance and possibly even a car payment.
$100/year (or even $200/year in 2015) is a penalty of less than $9/month (or $17/mo). $10 < $17 < $134, and when you have ZERO discretionary income, every penny counts. If one is young and healthy, why on earth would that person choose health care coverage over the penalty, other than perhaps being afraid of the government?
The fallacy of false choices leads to spurious, if not outright dishonest, conclusions.
Again, at $134 PER MONTH, why would an otherwise healthy person bother paying for coverage
Why would someone with a house that isn’t burning buy fire insurance? To hedge against a real, but unpredictable, risk.
Before the ACA a prospective health insurance consumer had to decide if covering that risk was worth the cost of the premium. Now that consumer has to decide if covering the risk is worth the cost of the premium, minus the penalty. That change doesn’t force the consumer’s hand, but it does nudge them towards getting coverage.
Why would someone with a house that isn’t burning buy fire insurance? To hedge against a real, but unpredictable, risk.
Actually, they would purchase it because the lienholder requires it as a condition of their mortgage, to cover the creditor in case of catastrophic loss.
But, since you mentioned homeowner’s insurance, I might as well address the fact that my combined homeowner’s, automobile, and motorcycle coverages cost me well under the $150/mo that healthcare coverage costs.
And, while we’re at it, I might as well address the rest of your statement: current ACA mandates have NOTHING to do with a “real but unpredictable risk”, and everything to do with covering everything else under the sun, PLUS those unpredictable things. Insurance, as it is known in just about every other context, is so far removed from what is allowable under the ACA that it’s laughable that anyone refers to it as “health insurance”. To wit, one needs to be under the age of 30 and have other qualifications (including, but not limited to, state buy-in) to qualify for anything even close to what used to be considered “catastrophic” coverage. In the state of Iowa, catastrophic plans aren’t available through any exchange, when they used to be de riguer for freelancers and other healthy, able-bodied young individuals.
My automobile insurer doesn’t require me to take my car in for oil changes in order to pay out an accident claim. That I choose a 5,000-mile schedule over a 3,000-mile schedule is at my own peril and my own choice. If car insurance companies were required to cover oil changes, tire rotations, and other regular maintenance as part of people’s policies, there is almost no plan that would cost under $300/mo for automobile coverage, even with interstate restrictions completely absent from the equation.
My homeowner’s insurance only stipulates that I maintain the home in a reasonable manner. There is no requirement in my homeowner’s insurance for me to paint my house regularly, vacuum, wash the windows, or mow the lawn. If I have an ammonia explosion from trying to keep 80 cats or from running a meth lab, or anything similarly negligent, I’m not covered.
Get the government out of the way, allow interstate pools, and allow the market to work as an INSURANCE market, and everything else would start to fall into place. I would even venture to guess that the savings would even be able to fund a “safety net” at the state or national level to help take care of those too poor to afford catastrophic injury, and we would STILL save money compared to the mess we have today and the even bigger mess we’re sure to have over the next few years.
This overarching state need to FORCE people to take care of their body will hopefully be seen as an anachronism in the near future and before the end of my lifetime. If not, I predict it will be seen as another anachronism in the more distant future, though perhaps as a the tell-tale sign of the start of the fall of the United States as a world economic leader.
Actually, they would purchase it because the lienholder requires it as a condition of their mortgage
People without mortgages buy fire insurance too.
my combined homeowner’s, automobile, and motorcycle coverages cost me well under the $150/mo that healthcare coverage costs
The risks are different, so the premiums are different.
current ACA mandates have NOTHING to do with a “real but unpredictable risk”,
Yes they do. For example, the ACA outlawed benefit caps, to make sure that insurance covers tail risks. Insurance with capped payouts (like home and auto coverage) is cheaper, but if you are the unlucky one with seven-digit medical bills you’re stuck.
There is no requirement in my homeowner’s insurance for me to paint my house regularly, vacuum, wash the windows, or mow the lawn.
ACA coverage doesn’t require that you go to the gym or eat vegetables or even quit smoking. I’m not sure what the point of this analogy is.
It’s a myth that the cause of higher ACA premiums is the fact that it covers routine expenses. Premiums have to be high enough to cover a risk pool’s total expenses, and routine care is a small fraction of those expenses. Medical spending follows a power law — most insurance payouts go to a small minority of much-sicker-than-usual beneficiaries. The problem isn’t everyone getting annual physicals, it’s a handful of people with 6- and 7-digit medical bills. The #1 reason ACA coverage is more expensive (compared to what some people could get pre-2014) is that it includes those people in the risk pool, rather than letting insurers price them out or bar them altogether.
I would even venture to guess that the savings would even be able to fund a “safety net”
It’s a comforting guess, but there’s no reason to believe that paying to cover those people through a separate system would be any cheaper. Your money is going to cover them one way or another.
And now we have to worry about privacy issues. This law is filled with all kinds of goodies.
http://www.pulse.me/ap/31490a20926d4ed3b98ff2d0ed8fc81d
This is your party Jim. They care so much for the poor:
Sen. Dianne Feinstein’s husband, Richard Blum, could bag $1 billion in commissions for his company from a government plan to sell 56 US Postal Service buildings.
http://www.breitbart.com/big-government/2015/01/17/sen-feinsteins-husbands-company-to-bag-1-billion-for-government-deal/
To be fair, if it wasn’t for the way that agents-who-trademark-their-job-title leech value off of the transactions and destroy wealth via their outrageous service fees, they wouldn’t stand to gain quite as much off of the sales. In fact, I find it disgusting that any agency can make more than a flat fee off of the sale of governmental property, but I feel that way about most transactions by that particular group of semi-professionals.
To clarify, I still think that it’s cronyism, the rich looking after the rich, and completely in-character for the denizens of DC, but I get even more worked up about the whole damnable structure of real estate commissions and the people who have chosen the-profession-with-the-trademarked-title as a source of income in their lives.