Don't Let Me Stop You

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The Individual Mandate and You

Posted by PLaplace on March 29, 2010

A fascinating tidbit came my way today (from more than one place) regarding the recently and regrettably passed health care bill.  Tucked away on page 33 of the recent Joint Committee on Taxation report on said bill comes this enticing nugget in regards to the penalty applied to those not maintaining “minimum essential coverage”:

“The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly.  The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed.  However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty.  Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.”

In short, though the bill does stipulate a tax of $695 or 2.5% of income, whichever is greater, on those without health insurance, there is no real mechanism in place for enforcement of this tax.  Many writers have already commented on how this is a possibly catastrophic flaw in the Obamacare machinery, for without any teeth the mandate will have no real effect.  If it has no effect people will not buy into the insurance risk pool, and as a result insurance premiums will soon begin an upward death spiral of sorts.

What interests me more is whether this omission was intentional, or simply a blunder.  While I always seek to credit ignorance over malfeasance, Morgen Richmond at BigGoverment.com makes the point (in the final paragraph) that this built in self-destruct provision could have been inserted with the intention of insuring the eventual death of the private insurance industry.  After all, it would most likely be easier to slip in a public option or single payer system somewhere down the line if the insurance industry had been jacking up prices in response to the last effort at “reform.”  This line of argument however presumes an incredible amount of attention to detail on the part of this bill’s architects, and while that is a possibility, my cursory observations of Washington lead me to believe it is highly unlikely.  Moreover, it seems that though this provision might make it easier to demonize the insurance industry, it would be even easier to point out how Democrats had set themselves up for failure in their own bill; a point which would provide a strong case against letting them do it again.  In that case we are left with ignorance on the part of the Democrats.  Given the size, scope, and general murkiness of the 2700 page bill itself, I find the explanation of ignorance highly plausible.

On a final note, for all of President Obama’s repetition that the mandate penalty is not a tax, even the Joint Committee on Taxation doesn’t buy it.  They title the section on the mandate as “Excise Tax on Individuals Without Essential Health Benefits Coverage.”

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One Response to “The Individual Mandate and You”

  1. […] License Info This work is licensed under a Creative Commons Attribution-Share Alike 3.0 Unported License. « The Individual Mandate and You […]

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