The Individual Mandate. Man, what a complicated and twisted path it’s taken.
Obama, himself, was against it before he was for it. in 2015, Vox said that it was “absolutely necessary” to making sure that Obamacare could be implemented. By forcing healthy individuals into the marketplace, it would lower the premiums for everybody else by spreading the cumulative risk around. If healthy people opted not to buy insurance, then the plan wouldn’t work.
The Supreme Court ultimately ruled by the slimmest possible margin that the mandate was constitutional—not because the federal government can force people to buy a product, but because the federal government does have the right to compel individuals to pay tax—undermining candidate and President Obama’s promise that taxes on the middle class wouldn’t be raised under his administration.
So, despite every liberal in the world screaming at the top of his lungs that President Donald J. Trump is a “moron” and an “Orange Droolius,” Trump beat the Democrats at their own game with his tax plan, which he signed into law earlier this month. Rather than try to “repeal and replace,” an effort which has failed massively in the Senate, Trump decided to simply repeal the individual mandate tax. Say what you want about the guy, this was some brilliant shit.
But did it kill Obamacare?
85 percent of projected Obamacare enrollees are eligible for subsidies, a strain on the federal budget that grew by 10 billion dollars in 2017. This is because the law was fundamentally broken—if insurance companies increase premiums, then the government simply paid them more money.
At the time of the 2017 subsidy increase, some red flags went up. “Since the premiums for 2017 are a lot higher than for 2016, it’s no surprise that premium tax credits would go up as well,” said Paul Ginsburg, director of the Brookings Institution health policy center, at the time. “The premiums in 2015 and 2016 appear to have been unduly low.” Gee, I wonder why. Couldn’t possibly have been to prop up Obamacare, could it?
Obviously no fan of the bill, Trump eliminated cost-sharing subsidies in October, saving $7-10 billion. And now that individuals who don’t want health insurance aren’t required to purchase it…who’s gonna cover these premium increases? It won’t be the federal government, thanks to the aforementioned elimination of cost-sharing subsidies. The state exchanges won’t have the budget.
So what will happen? Well, that’s where opinions differ.
Quite amazingly, some of the most rabid voices in support of the individual mandate are now saying that its repeal is meaningless. Some think that people will continue to buy coverage through the exchanges, even if they aren’t mandated to do so, because people would rather have health insurance than not.
However, what if the insurance companies opt out of the exchanges? This has already happened in shockingly high numbers—in fact, about 30% of current Obamacare enrollees will only have one choice for insurance in 2018. Aetna is leaving over 200 counties for 2018. Anthem is leaving around 400 counties. Humana is exiting about 150. And when you only have one choice, well, you don’t really have any choice at all.
At the current pace and in the current environment, where insurance companies are forced to cover more and more of the costs, it’s hard to see any of the larger insurance companies continuing to opt in for 2019 unless they’re given a compelling financial reason to do so. Under the current congress and administration, that seems unlikely. Obamacare fans are going to have to hope for a sweeping change in the midterm elections, and although democrat candidates currently have a double-digit lead over republicans in the polls, I seem to remember that Hillary also had a double-digit lead around this time in 2015, and Trump didn’t have the additional benefit of nearly 80 percent of Americans taking home an extra grand or two a year in their paychecks.
In the end, it seems likely that Mr. Trump will get his wish, that Obamacare will collapse under its own weight.