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

[t_host1]

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.

aah... finally a distinction. Insurance in a commerce based society is the opposite from a pooling of others liability being redistributed. Socialism has no dynamic growth, it consumes itself - its value. Insurance in it's commerce base, is the multiplication of a value from the results of works - investments, the capitulations of wants that have the profit to which claims are paid.   

[King]

Why lease a car for $150/month when you can flush $75/month down the toilet for half the price?

[King]

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.

aah... finally a distinction. Insurance in a commerce based society is the opposite from a pooling of others liability being redistributed. Socialism has no dynamic growth, it consumes itself - its value. Insurance in it's commerce base, is the multiplication of a value from the results of works - investments, the capitulations of wants that have the profit to which claims are paid.   

I think your database is confusing insurance with a 401k.

[t_host1]

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.

aah... finally a distinction. Insurance in a commerce based society is the opposite from a pooling of others liability being redistributed. Socialism has no dynamic growth, it consumes itself - its value. Insurance in it's commerce base, is the multiplication of a value from the results of works - investments, the capitulations of wants that have the profit to which claims are paid.   

I think your database is confusing insurance with a 401k.

Now you, you! you just quit that, you're confessing me.

[anvi]

I'm not sure if the Pub caucus in the House that is making this demand that the individual mandate be deferred are thinking about it that closely, Torie; they may be making just because they believe it's a good political soundbite; "if the employer mandate is being deferred, it's only fair that the individual mandate be deferred."  As a policy matter, I think you're right that deferring the mandate is a fiscal bomb waiting to explode.  That's hard for the Dems to counter despite the policy implications, because the individual mandate is so unpopular in the first place.  But I think the call to revoke the ACA's tax on medical devices is also, whether overtly intended or not, a way to make the whole law more expensive in federal budget terms to implement, because eliminating that tax just reduces the amount of revenue the bill can collect to partially recover its costs.  That's the effect of doing that, anyway.  In any case, I certainly wish you were a Pub in Congress, Torie--there needs to be someone in Congress on your side of the aisle who isn't afraid of raising these points in a principled and compelling way.

[Small Business Owner of Any Repute]

$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.

Do you really think the reason people get insurance is to pay for routine expenses? That's ... not accurate at all.

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

OH GOD NO THEN WHY HAS MY DOCTOR BEEN GRABBING ME THERE

Catastrophic accidents, meanwhile, will ruin you financially.

In which case you file bankruptcy.

Bankruptcy is financial ruin.

[memphis]

Buying insurance is a loss for the average person. That's true. True for life, auto, home, health insurances. The trick is that your life is not average. You have a sample size of one, and you have to protect your life as best you can. That's why people buy all forms of insurance. To manage their risk. I thought that would go without saying, but apparantly not.

[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.

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.

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

[Sbane]

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.

Those who don't buy insurance when they have the means to do so should have their bank accounts emptied. Do you disagree with this? Why don't you believe in personal responsibility? Why should the rest of us pay for their sociopathic behavior?

[jimrtex]

Why lease a car for $150/month when you can flush $75/month down the toilet for half the price?

Presumably the car is worth $150/month.  Or are you saying that paying taxes is like flushing money down the toilet.  But why would you lease the car?

[Sbane]

Also, what's up with this fascination with bankruptcy? Sure, if you deal with cash afterwards your bankruptcy then it does not really affect you. But if you want to buy a house in a pricy region of the country, forget about it! And perhaps bankruptcy makes sense if you have a paid off house. Does it really make sense for a medical professional in their early 30's who has tons of student loans but no paid off house? Of course it doesn't! Unless they don't want the ability to buy a house that costs more than 250k.

[jimrtex]

$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.

Do you really think the reason people get insurance is to pay for routine expenses? That's ... not accurate at all.

They buy insurance because the government is threatening to fine them?

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

OH GOD NO THEN WHY HAS MY DOCTOR BEEN GRABBING ME THERE

Didn't you pay him?

Catastrophic accidents, meanwhile, will ruin you financially.

In which case you file bankruptcy.

Bankruptcy is financial ruin.

Not if you were living paycheck to paycheck in the first place.

[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.

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

What is this $229 a month number? 

Nobody knows their future medical costs.  There is a risk of high medical costs that is insured against by a health insurance policy.  The value is in managing the risk.  Perhaps you should read the wikipedia page on insurance or something.  It's a fairly simple concept.

[Brittain33]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?

Jim, what is the expected value of a $1 lottery ticket?

Spoilers: the answer is significantly less than $1.

Why do people buy lottery tickets? Why wouldn't people buy this insurance if it has that value?

People are not always economically rational beings. If they were, we wouldn't need a mandate, and the lottery would draw no interest.

[True Federalist (진정한 연방 주의자)]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

I see you are making a common mistake here.  While the insurance has a price of $229/month to our hypothetical 29 yer old, what it is worth to him could be more or less than its price.  If it's worth more to him than it's price he'll buy (unless he can find other things that are worth even more to him at that price that he could obtain)  If it's not worth $229/month to him he won't buy.  It's elementary microeconomics, which far too many people tend to ignore, including many who should know better.

Also since the $52/month is a sunk cost for him in this scenario, the actual cost of his decision to but insurance is not $52/month but $177/month ($229-$52).  Hence the purpose of the tax is to make the cost of insurance lower, altho the price remains the same.

[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.

Those who don't buy insurance when they have the means to do so should have their bank accounts emptied. Do you disagree with this? Why don't you believe in personal responsibility? Why should the rest of us pay for their sociopathic behavior?

Whom should do the emptying of the bank accounts, and what should be done with the proceeds?

Should people who don't have the means to buy insurance be permitted to engage in activities that might cause additional persons to be created.  Isn't that sociopathic behavior?

[Sbane]

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.

Those who don't buy insurance when they have the means to do so should have their bank accounts emptied. Do you disagree with this? Why don't you believe in personal responsibility? Why should the rest of us pay for their sociopathic behavior?

Whom should do the emptying of the bank accounts, and what should be done with the proceeds?

Should people who don't have the means to buy insurance be permitted to engage in activities that might cause additional persons to be created.  Isn't that sociopathic behavior?

The Hospitals of course! This should only be allowed for those who are not under the Obamacare umbrella. And poor people can already get exemptions from Obamacare (though they should just be given very low cost to free insurance), thus putting them under that umbrella. Sociopathic people who don't get it in order to game the system should have their bank accounts emptied by the injured parties.

And no, I don't believe in forced sterilization just because someone is poor. I do think that if someone is able to buy insurance they should, and if they don't, they should pay for the care they receive. It's all about personal responsibility really. If a homeless person walks in for ER care, what can the hospitals really take from him? If a 30 year old with a new car and a shiny condo comes in......One of those people probably can't afford insurance and won't get one from the government unless he lives in a civilized state. The other most certainly can and must live with the consequences of their decision to not buy insurance.

[jimrtex]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

What is this $229 a month number? 

Nobody knows their future medical costs.  There is a risk of high medical costs that is insured against by a health insurance policy.  The value is in managing the risk.  Perhaps you should read the wikipedia page on insurance or something.  It's a fairly simple concept.

The $229 was the supposed non-subsidized premium for a 29 year-old in California who made $25,000 per year.

Why would the 29 year-old in California who makes $25,000 per year be interested in "managing risks".  Like dude, u really need 2 read the wikipedia page on insurance.

[jimrtex]

Also, what's up with this fascination with bankruptcy? Sure, if you deal with cash afterwards your bankruptcy then it does not really affect you. But if you want to buy a house in a pricy region of the country, forget about it! And perhaps bankruptcy makes sense if you have a paid off house. Does it really make sense for a medical professional in their early 30's who has tons of student loans but no paid off house? Of course it doesn't! Unless they don't want the ability to buy a house that costs more than 250k.

The 29-year old in California who makes $25,000 per year isn't planning on buying a house.

[Torie]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

I see you are making a common mistake here.  While the insurance has a price of $229/month to our hypothetical 29 yer old, what it is worth to him could be more or less than its price.  If it's worth more to him than it's price he'll buy (unless he can find other things that are worth even more to him at that price that he could obtain)  If it's not worth $229/month to him he won't buy.  It's elementary microeconomics, which far too many people tend to ignore, including many who should know better.

Also since the $52/month is a sunk cost for him in this scenario, the actual cost of his decision to but insurance is not $52/month but $177/month ($229-$52).  Hence the purpose of the tax is to make the cost of insurance lower, altho the price remains the same.

This assumes that the $52 would be paid, and the only way it can be collected if not paid, is against tax refunds as I understand it. And therein lies one of the problems of course.

[jimrtex]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?

Jim, what is the expected value of a $1 lottery ticket?

Spoilers: the answer is significantly less than $1.

Why do people buy lottery tickets? Why wouldn't people buy this insurance if it has that value?

People are not always economically rational beings. If they were, we wouldn't need a mandate, and the lottery would draw no interest.

Maybe it could be marketed like the lottery?   For less than $10 per day, you could win an all-expenses-paid 3-week paid vacation at the local hospital!!!  But that's not all!!!  You can look forward to months of paid-for therapy.

[jimrtex]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

I see you are making a common mistake here.  While the insurance has a price of $229/month to our hypothetical 29 yer old, what it is worth to him could be more or less than its price.  If it's worth more to him than it's price he'll buy (unless he can find other things that are worth even more to him at that price that he could obtain)  If it's not worth $229/month to him he won't buy.  It's elementary microeconomics, which far too many people tend to ignore, including many who should know better.

Also since the $52/month is a sunk cost for him in this scenario, the actual cost of his decision to but insurance is not $52/month but $177/month ($229-$52).  Hence the purpose of the tax is to make the cost of insurance lower, altho the price remains the same.

Our hypothetical 29 year old who makes $25,000 per year can find lots of things that he would rather buy for $229/month.

[jimrtex]

If the insurance was worth $229/month why wouldn't our 29 year old purchase health insurance?  Why does he have to pay $52/month tax if he doesn't?

I see you are making a common mistake here.  While the insurance has a price of $229/month to our hypothetical 29 yer old, what it is worth to him could be more or less than its price.  If it's worth more to him than it's price he'll buy (unless he can find other things that are worth even more to him at that price that he could obtain)  If it's not worth $229/month to him he won't buy.  It's elementary microeconomics, which far too many people tend to ignore, including many who should know better.

Also since the $52/month is a sunk cost for him in this scenario, the actual cost of his decision to but insurance is not $52/month but $177/month ($229-$52).  Hence the purpose of the tax is to make the cost of insurance lower, altho the price remains the same.

This assumes that the $52 would be paid, and the only way it can be collected if not paid, is against tax refunds as I understand it. And therein lies one of the problems of course.

Because it wasn't intended to be a "tax", but merely a regulation of interstate commerce enforced by the governments tax-collection agency, the penalty for non-payment of "taxes" does not apply.

[True Federalist (진정한 연방 주의자)]

This assumes that the $52 would be paid, and the only way it can be collected if not paid, is against tax refunds as I understand it. And therein lies one of the problems of course.

Here's a newsflash for you Torie.  Most people get refunds.  The default paycheck deductions cause most people to overpay their taxes unless they have a significant amount of non-wage income  or they go to the effort of having less taken out.  Ostensibly it's done that way to protect people from having to scrape together at the last moment the money needed to pay a tax bill, but in reality, it's so that Uncle Sam can get an interest-free loan from it taxpayers.

Now it's possible that after getting snookered out of their refund by Uncle Sam the first time they have to pay the tax, some people will choose to change their ways, but not all of them will decide that it's better to change their deductions than to start buying health insurance.

[Sbane]

Also, what's up with this fascination with bankruptcy? Sure, if you deal with cash afterwards your bankruptcy then it does not really affect you. But if you want to buy a house in a pricy region of the country, forget about it! And perhaps bankruptcy makes sense if you have a paid off house. Does it really make sense for a medical professional in their early 30's who has tons of student loans but no paid off house? Of course it doesn't! Unless they don't want the ability to buy a house that costs more than 250k.

The 29-year old in California who makes $25,000 per year isn't planning on buying a house.

If the premium after subsidies for a 29 year old was $229, then you would have a point. Do you have any proof that the premium for a bronze plan is $229 after subsidies for a 29 year old male making $25k? The guy in your hypothetical would likely be paying half that amount.