Won't deferring the individual mandate be a fiscal time bomb?

[Torie]

This thought occurred to me yesterday.  The Pub idea of deferring the individual mandate for a year, seems like a fiscally insane idea.  Why? Because Obamacare otherwise will still be in place, and folks voluntarily will still be able to sign up for subsidized insurance, and presumably will in particular if they have pre-existing conditions. So won't those who voluntarily sign up be disproportionately the sicks, and therefore the insured pool of new entrants will be disproportionately sick;  therefore the cash flow out as compared to the premiums in, will just be a sea of horrifically red ink? That tends to be a problem irrespective, given how weak the mandate is, but without any mandate at all, the problem will be worse, no? Yet the media has never discussed this issue to my knowledge nor the Dems, suggesting that I am missing something here. But I can't think what it is.

Why aren't the Dems bashing the Pubs over the head with this argument? To me, it is a dispositive and winning argument from which there is no escape. Can someone help the old man with some of this?  Thanks.

I wish I were a Pub in Congress. They need me.

[bedstuy]

I don't think you understand Republicans.

Their problems with Obamacare are inchoate.  It's not about how it will change the healthcare market.  It's about socialism/liberal/death-panels/Democrats=Bad/Muslim-Black-Gay Obama.  Ultimately, they just want to create chaos and make Obama's term a failure.   

[Torie]

Maybe what the Pubs mean is that they want to defer the whole Obamacare concept for individuals for a year, so those with pre-exisiting conditions can twist slowly, slowly in the wind for another year. That would close the circle. But if that is the case, for some reason the Pubs don't phrase it that way now do they? 

[Sbane]

Perhaps that is exactly what the Republicans want. A disaster. Then they can claim that it was Obama's fault. The Republican right now is really, really disgusting. And I am being nice.

[Lief 🗽]

Perhaps that is exactly what the Republicans want. A disaster. Then they can claim that it was Obama's fault. The Republican right now is really, really disgusting. And I am being nice.

This is the correct answer.

[memphis]

Perhaps that is exactly what the Republicans want. A disaster. Then they can claim that it was Obama's fault. The Republican right now is really, really disgusting. And I am being nice.

^^^^^^^^^
Torie, your point is the entire Republican objective. I know that, due to our frequent differences of opinion (and my often brusque tone), you may be inclined to take what I say with a large grain of salt. But seriously. This is all there is to it.

[Torie]

Maybe Memphis. It sounds a bit too Machiavellian to me. But it is confusing, and it is hard to believe that the Pubs are just that dumb, assuming I have analyzed this right.

[t_host1]

This thought occurred to me yesterday.  The Pub idea of deferring the individual mandate for a year, seems like a fiscally insane idea.  Why? Because Obamacare otherwise will still be in place, and folks voluntarily will still be able to sign up for subsidized insurance, and presumably will in particular if they have pre-existing conditions. So won't those who voluntarily sign up be disproportionately the sicks, and therefore the insured pool of new entrants will be disproportionately sick;  therefore the cash flow out as compared to the premiums in, will just be a sea of horrifically red ink. That tends to be a problem irrespective, given how weak the mandate is, but without any mandate at all, the problem will be worse, no? Yet the media has never discussed this issue to my knowledge nor the Dems, suggesting that I am missing something here. But I can't think what it is.

Why aren't the Dems bashing the Pubs over the head with this argument? To me, it is a dispositive and winning argument from which there is no escape. Can someone help the old man with some of this?  Thanks.

I wish I were a Pub in Congress. They need me.

What is Medicare, Medicaid, Americans with disabilities, hospice and the liberties’ of a noble citizen?

[Torie]

This thought occurred to me yesterday.  The Pub idea of deferring the individual mandate for a year, seems like a fiscally insane idea.  Why? Because Obamacare otherwise will still be in place, and folks voluntarily will still be able to sign up for subsidized insurance, and presumably will in particular if they have pre-existing conditions. So won't those who voluntarily sign up be disproportionately the sicks, and therefore the insured pool of new entrants will be disproportionately sick;  therefore the cash flow out as compared to the premiums in, will just be a sea of horrifically red ink. That tends to be a problem irrespective, given how weak the mandate is, but without any mandate at all, the problem will be worse, no? Yet the media has never discussed this issue to my knowledge nor the Dems, suggesting that I am missing something here. But I can't think what it is.

Why aren't the Dems bashing the Pubs over the head with this argument? To me, it is a dispositive and winning argument from which there is no escape. Can someone help the old man with some of this?  Thanks.

I wish I were a Pub in Congress. They need me.

What is [How are] Medicare, Medicaid, Americans with disabilities [act], [and] hospice [care] and [consistent with] the liberties’ of a noble [American] citizen[ s] ?

Is the above what you meant?  

[t_host1]

This thought occurred to me yesterday.  The Pub idea of deferring the individual mandate for a year, seems like a fiscally insane idea.  Why? Because Obamacare otherwise will still be in place, and folks voluntarily will still be able to sign up for subsidized insurance, and presumably will in particular if they have pre-existing conditions. So won't those who voluntarily sign up be disproportionately the sicks, and therefore the insured pool of new entrants will be disproportionately sick;  therefore the cash flow out as compared to the premiums in, will just be a sea of horrifically red ink. That tends to be a problem irrespective, given how weak the mandate is, but without any mandate at all, the problem will be worse, no? Yet the media has never discussed this issue to my knowledge nor the Dems, suggesting that I am missing something here. But I can't think what it is.

Why aren't the Dems bashing the Pubs over the head with this argument? To me, it is a dispositive and winning argument from which there is no escape. Can someone help the old man with some of this?  Thanks.

I wish I were a Pub in Congress. They need me.

What is [How are] Medicare, Medicaid, Americans with disabilities [act], [and] hospice [care] and [consistent with] the liberties’ of a noble [American] citizen[ s] ?

Is the above what you meant?  

No        no   , not exactly….   I be back

[Torie]

Well, give me credit for trying.

[7,052,770]

As I posted a couple days ago, ALL individual insurance prices for 2014 have been set.  The filing deadlines have passed, and they were calculated with the assumption that the individual mandate is in place.  If the individual mandate is taken away now, all individual health insurance in the entire country in underpriced, and that's not going to be good for anyone.

It's too late, Republicans.  Try again in January 2017, if you even want to anymore.

[Small Business Owner of Any Repute]

Maybe what the Pubs mean is that they want to defer the whole Obamacare concept for individuals for a year, so those with pre-exisiting conditions can twist slowly, slowly in the wind for another year. That would close the circle. But if that is the case, for some reason the Pubs don't phrase it that way now do they?  

Everyone knows that if the GOP gets a one-year delay here, they'll demand another one-year delay next year or they'll shut down the government again. To them, ObamaCare will never be ready for primetime, and the goal is to delay until they can destroy.

[All Along The Watchtower]

The Republican Party is an extension of the Right. The Right is dominated by its most reactionary elements these days. They are willing to cause a political and economic catastrophe if it means they can  deny a large number of people health care-and access to other resources-indefinitely.

This is the bottom line: They care more about their warped, oppressive ideology than they care about American society and being faithful to their respective oaths of office.

[jimrtex]

This thought occurred to me yesterday.  The Pub idea of deferring the individual mandate for a year, seems like a fiscally insane idea.  Why? Because Obamacare otherwise will still be in place, and folks voluntarily will still be able to sign up for subsidized insurance, and presumably will in particular if they have pre-existing conditions. So won't those who voluntarily sign up be disproportionately the sicks, and therefore the insured pool of new entrants will be disproportionately sick;  therefore the cash flow out as compared to the premiums in, will just be a sea of horrifically red ink. That tends to be a problem irrespective, given how weak the mandate is, but without any mandate at all, the problem will be worse, no? Yet the media has never discussed this issue to my knowledge nor the Dems, suggesting that I am missing something here. But I can't think what it is.

Why aren't the Dems bashing the Pubs over the head with this argument? To me, it is a dispositive and winning argument from which there is no escape. Can someone help the old man with some of this?  Thanks.

I wish I were a Pub in Congress. They need me.

Wouldn't it be more rational to pay the tax than to buy insurance?

If you are in catastrophic accident, it won't matter whether you have insurance.  And if you develop a chronic condition, you can buy insurance.

I don't see how the Dems can successfully make the argument that healthy people have to subsidize unhealthy people.

[King]

Republicans know

1. Delaying the mandate would destroy the program and turn it into a disaster
2. The public is too dumb to connect that the mandate delay was the reason the program was a disaster

[Sbane]

This thought occurred to me yesterday.  The Pub idea of deferring the individual mandate for a year, seems like a fiscally insane idea.  Why? Because Obamacare otherwise will still be in place, and folks voluntarily will still be able to sign up for subsidized insurance, and presumably will in particular if they have pre-existing conditions. So won't those who voluntarily sign up be disproportionately the sicks, and therefore the insured pool of new entrants will be disproportionately sick;  therefore the cash flow out as compared to the premiums in, will just be a sea of horrifically red ink. That tends to be a problem irrespective, given how weak the mandate is, but without any mandate at all, the problem will be worse, no? Yet the media has never discussed this issue to my knowledge nor the Dems, suggesting that I am missing something here. But I can't think what it is.

Why aren't the Dems bashing the Pubs over the head with this argument? To me, it is a dispositive and winning argument from which there is no escape. Can someone help the old man with some of this?  Thanks.

I wish I were a Pub in Congress. They need me.

Wouldn't it be more rational to pay the tax than to buy insurance?

If you are in catastrophic accident, it won't matter whether you have insurance.  And if you develop a chronic condition, you can buy insurance.

I don't see how the Dems can successfully make the argument that healthy people have to subsidize unhealthy people.

I don't think you realize this, but ER care is not free. It may be for poors who don't have a penny to their name, but if you think someone with money in a bank account can get away with not paying, then you are an idiot. Of course you may be fine with ruining your credit, and not paying for services you used, but in that case you are a freeloader, and a worthless human being who should be denied oxygen.

And of course those who don't buy insurance should be denied the right to buy guaranteed issue insurance. The freeloaders should be exterminated out of the gene pool as far as I am concerned.

[Small Business Owner of Any Repute]

Wouldn't it be more rational to pay the tax than to buy insurance?

No. Paying the tax is the irrational choice. In exchange for paying the tax, which will eventually rise to 2.5% of your yearly income, you literally get nothing. When you pay for insurance, which will come with a check from the feds to help you afford it, you get something. Something is better than nothing, you see.

A 29-year-old in California with an income of $25,000 has two options:

Pay a $52 monthly tax to get $0 worth of coverage.
Pay $144 monthly for insurance to get $229 worth of coverage.

Wouldn't the rational person just pay the extra $92 a month for health insurance? Even if it's a "bad deal" at the $229 level, it's certainly worth it at $144.

If you are in catastrophic accident, it won't matter whether you have insurance.  And if you develop a chronic condition, you can buy insurance.

Without insurance, many chronic conditions will go undiagnosed long enough to cause serious adverse health effects. Passing on insurance rules out some very basic screenings that could literally cost a 29-year-old his testicles to cancer. Or a woman at risk of early breast cancer. These things happen, and without insurance, they destroy. Lack of access to healthcare also increases costs of obtaining doctor services when needed, leaving people hesitant to call an ambulance at the first signs of a heart attack. It also increases the costs of prescription drugs, which encourages the mentally ill to skip their meds. Do you know what CVS charges without insurance? I mean, good lord.

Catastrophic accidents, meanwhile, will ruin you financially. If someone is poor enough to skip on health care, they're poor enough to be destroyed by a single medical bill. And if the poor are getting "free" care now anyway, who do you think is paying for that "free"? It's you, your insurance company, and the federal government. Society pays no matter what, so why does it matter if it takes the form of ObamaCare? Do you think poor people are going to be wrongly encouraged to get more sick than otherwise?

I don't see how the Dems can successfully make the argument that healthy people have to subsidize unhealthy people.

That is literally what health insurance is.

[t_host1]

Well, give me credit for trying.

Torie, believe me when I say your efforts in trying to understand me are well respected and grateful.

I think the point I was trying to make was that if the mandate or the entire ACA were to be repealed; ACA as I understand it, is an amendment to existing social security/ Medicare legislation, so the fall back position is prior to ACA which I do not think was ever repealed when ACA started. I took your premise to be that there is no life line for the poor, sick’s and those who just think health care is a right, free of charge- even they will get relief/help without ACA.

The point that Harry keeps saying about prices being based on number of guaranteed mandated payers only underlines an assumption of a human behavior being compliant places risk management in an impossible place of stability. If people do not find ACA affordable and do not buy, well, they the insurers lose; it is a part of doing business.

It takes a special art to explain ones position and this attempt is just another attempt.
 

[Cory]

Maybe Memphis. It sounds a bit too Machiavellian to me. But it is confusing, and it is hard to believe that the Pubs are just that dumb, assuming I have analyzed this right.

What else is new.

[SteveRogers]

Maybe what the Pubs mean is that they want to defer the whole Obamacare concept for individuals for a year, so those with pre-exisiting conditions can twist slowly, slowly in the wind for another year. That would close the circle. But if that is the case, for some reason the Pubs don't phrase it that way now do they? 

Ummm...nope, I don't believe so. Check the actual bill Republicans tried to pass the other day

[jimrtex]

Wouldn't it be more rational to pay the tax than to buy insurance?

If you are in catastrophic accident, it won't matter whether you have insurance.  And if you develop a chronic condition, you can buy insurance.

I don't see how the Dems can successfully make the argument that healthy people have to subsidize unhealthy people.

I don't think you realize this, but ER care is not free. It may be for poors who don't have a penny to their name, but if you think someone with money in a bank account can get away with not paying, then you are an idiot. Of course you may be fine with ruining your credit, and not paying for services you used, but in that case you are a freeloader, and a worthless human being who should be denied oxygen.

And of course those who don't buy insurance should be denied the right to buy guaranteed issue insurance. The freeloaders should be exterminated out of the gene pool as far as I am concerned.

Perhaps you were denied oxygen, and that is why you don't think.

Most people don't have significant bank accounts.   If they rack up 10s of thousands of medical debt at the ER, they declare bankruptcy.

Torie was claiming that this was a winning argument for the Dems.  I don't think he was talking about forced sterilization for those who are unable or unwilling to pay for health insurance.

[jaichind]

Not really.  It would have some short term impact but it would have very little impact on the long run.  The reason is this: Hidden within Obamacare law has this provision "if exchange subsidies top 0.5% of GDP then cuts will take place in the subsidies so ths subdies are capped at 0.5% of GDP."

Bear in mind that this povision was done a time before the Supreme Court ruling that may see more people shift to the exchanges from Medicaid.  So the chances of hitting that trigger will take place earlier than later and the gap will be larger than expected.  Of course if less young healthy uninsured people than expected op to pay to penalty as opposed to sign up to Obamacare then the premiums will go up anyway making the Obamacare subsidies cost more than expected.  So there will be a whole host of risks to this trigger taking place as well as it being more impactful and a possible delay of the individual mandate would add to it.  But because it is unavoidable that this cap will be hit one way or another the fiscal impact would actually be not that large since perciesly the subsidies will be capped.

I knew about this a while ago ergo when I do my early retirement planning I always structured my investment so my MAGI (but not my total extraction from investments for annual spend which will be much larger) will be below 300% FPL and not %400 FPL every other year to capture Obamacare subsidies.  I do this on the premise that this 0.5% GDP trigger will force subsidies to be reduced and the obviously way is to lower the "subsidy cliff" from 400% FPL to something like 300% FPL.  Of course as this takes place this itself might lead to a death sprial where some people in the 300% FPL and 400% FPL that lose the subidies might choose to pay the fine instead which in turn raises insurance premiums which in turn raises subsidies which then hits the 0.5% GDP cap which then in turn lowers the "subsidy cliff" from 300% FPL to a lower number and the process begins again.  In such a case I will most likely not be able to claim Obamacare subdies.  Its ok, I will live.  I think a better way to do it is to have a smoothing function where the subsidies are taken away not at a hard cut off like 400% FPL but smooth it out.  Of course the problem with this is that the hit subsidies will be higher in the 100% FPL to 200% FPL region.  And with the companies over time shifting their low cost works into part time there will be more of them.  In the end under this alternative the lower income people that Obama wanted to get affordable healthcare will not really be that affordable or face a possible death sprial of subsidy caps and raising premiums.  

Of course they can get rid of this cap, but then Obama's claim that "Obamacare will not add to the deficit" will be blown out of the water.

[jimrtex]

Wouldn't it be more rational to pay the tax than to buy insurance?

No. Paying the tax is the irrational choice. In exchange for paying the tax, which will eventually rise to 2.5% of your yearly income, you literally get nothing. When you pay for insurance, which will come with a check from the feds to help you afford it, you get something. Something is better than nothing, you see.

A 29-year-old in California with an income of $25,000 has two options:

Pay a $52 monthly tax to get $0 worth of coverage.
Pay $144 monthly for insurance to get $229 worth of coverage.

Wouldn't the rational person just pay the extra $92 a month for health insurance? Even if it's a "bad deal" at the $229 level, it's certainly worth it at $144.

$52 is 2.5%.  You said eventually.  What is it in 2014?  The income tax on $25,000 is $1800 per year.  $2400 is not that much more.

The typical 29-year-old doesn't have $144/monthly medical costs, let alone $229/monthly worth of medical costs, so even at the subsidized price, it does not have the value you attribute to it.  If you live in a 3rd floor walk-up studio apartment, a lawnmower "worth" $229 that you can buy for $144 is not a good deal.

If you are in catastrophic accident, it won't matter whether you have insurance.  And if you develop a chronic condition, you can buy insurance.

Without insurance, many chronic conditions will go undiagnosed long enough to cause serious adverse health effects. Passing on insurance rules out some very basic screenings that could literally cost a 29-year-old his testicles to cancer. Or a woman at risk of early breast cancer. These things happen, and without insurance, they destroy. Lack of access to healthcare also increases costs of obtaining doctor services when needed, leaving people hesitant to call an ambulance at the first signs of a heart attack. It also increases the costs of prescription drugs, which encourages the mentally ill to skip their meds. Do you know what CVS charges without insurance? I mean, good lord.

Web suggests that there are not basic screening tests for testicular cancer.   A mammogram is around $100.

Catastrophic accidents, meanwhile, will ruin you financially.

In which case you file bankruptcy.

I don't see how the Dems can successfully make the argument that healthy people have to subsidize unhealthy people.

That is literally what health insurance is.

But how is this a winning argument for the Democrats?

[bedstuy]

Wouldn't it be more rational to pay the tax than to buy insurance?

No. Paying the tax is the irrational choice. In exchange for paying the tax, which will eventually rise to 2.5% of your yearly income, you literally get nothing. When you pay for insurance, which will come with a check from the feds to help you afford it, you get something. Something is better than nothing, you see.

A 29-year-old in California with an income of $25,000 has two options:

Pay a $52 monthly tax to get $0 worth of coverage.
Pay $144 monthly for insurance to get $229 worth of coverage.

Wouldn't the rational person just pay the extra $92 a month for health insurance? Even if it's a "bad deal" at the $229 level, it's certainly worth it at $144.

$52 is 2.5%.  You said eventually.  What is it in 2014?  The income tax on $25,000 is $1800 per year.  $2400 is not that much more.

The typical 29-year-old doesn't have $144/monthly medical costs, let alone $229/monthly worth of medical costs, so even at the subsidized price, it does not have the value you attribute to it.  If you live in a 3rd floor walk-up studio apartment, a lawnmower "worth" $229 that you can buy for $144 is not a good deal.

That's not how insurance works.  If you can't see that, you have no business arguing about the ACA.  Insurance requires that the typical customer pay more than their typical expense per month to "insure" against the risk of an unusually bad outcome.  That's why it's insurance.  The value is in being protected from unexpected, large expenses.