« | »

Obama-Care Mandate/Tax May Be A Lot Higher

From an amused Politico:

Obamacare mandate may be ‘mandate plus’

By DAVID NATHER | January 13, 2013

Can’t get enough of Obamacare’s individual mandate? Get ready for “mandate plus.”

Isn’t it amusing how we are always hoodwinked.

The Obama administration always said there was a practical reason it needed the mandate, which starts next year. It wasn’t to be mean to people — it was supposed to pull in enough healthy customers to help pay for all the sick people who will get coverage. That’s why the White House stuck with it all the way to the Supreme Court — however unpopular politically, it was the best tool to make the new health system work.

Here’s the catch: The individual mandate penalties will be pretty weak as they are phased in over two years — only $95 when they start in 2014, much less than it costs to buy insurance. And yet, everyone with pre-existing conditions will have to be accepted for coverage right away.

Now they tell us. After the ‘mandate/tax’ been declared Constitutional, and the elections are safely over.

That’s why insurance companies are telling the administration the mandate won’t be enough for the first two years. They want more incentives — such as a late enrollment fee — to get healthy people to sign up quickly. Without getting the healthy folks in, the fear is that everyone’s health insurance premiums could shoot through the roof when all those sick people get their coverage

This is a win-win for Obama. He gets to blame the insurance companies for being greedy and wanting higher mandates. And insurance companies will have to charge more for their premiums, which will drive more people into the government’s system.

“The key really is, how do you get younger people to buy coverage?” said Justine Handelman, vice president for legislative and regulatory policy at the Blue Cross and Blue Shield Association. “If you can jump in and out every time you need services, costs will go up.”

The mandate is the “stick” that’s supposed to prevent that, by making people pay a penalty (or as the Supreme Court called it, a tax) if they don’t get health coverage when they’re eligible. When the mandate is at full strength in 2016, people will pay $695 or 2.5 percent of their income, whichever is greater.

But from a practical perspective, it’s really not that much of a stick in the first two years. Next year, if you don’t get health insurance, you’d pay $95 or 1 percent of your income — a little less than you might pay for an iPod Nano. In 2015, you’d pay $325 or 2 percent of your income…

So here we go. Now that the mandate/tax is locked in, everyone is going to push for it to be higher.

That’s why some insurers want HHS to give them more sticks.

America’s Health Insurance Plans, the main trade group for health insurance companies, has asked HHS to impose late enrollment fees, so people who don’t sign up until they need the coverage will pay more than people who enroll right away…

The insurers have suggested other penalties for people who delay, such as not letting them choose the most generous health plans and allowing insurers to impose waiting periods.

The Blue Cross and Blue Shield Association is asking HHS for the late enrollment fees and penalties, too…

And the American Academy of Actuaries — the people who crunch all the numbers for health insurers’ costs — suggested late enrollment penalties and other measures, like not letting people sign up for coverage as often and requiring small employers to sign their workers up automatically…

Some of these ideas used to be discussed as lighter alternatives to the individual mandate, which Congress would have to pass to add them to the health care law. But now, these groups are asking HHS to impose the measures on its own, saying it has the power to keep the health insurance market stable in the first two years

You see, you don’t need Congress to impose new or higher taxes. The Secretary of HHS can do it. ‘As the Secretary shall determine…’ Isn’t that neat?

Just stand back and watch this little tax quickly become a huge tax.

This article was posted by Steve Gilbert on Monday, January 14th, 2013. Comments are currently closed.

2 Responses to “Obama-Care Mandate/Tax May Be A Lot Higher”

  1. This would be heart stopping news that free medical care is going to bankrupt me …

  2. imnewatthis

    So if you’re busy and broke because you’re going through some family crisis, you’ll be penalized because you didn’t have a chance to research and buy health insurance right away. And they want to make it even harder and more complicated.
    On the other hand, it’s too much to ask that a citizen obtain a state picture ID before they vote.




« Front Page | To Top
« | »