The Employer Mandate: A Necessary Impossibility

Last night, I put up a post suggesting that the employer mandate may simply be too technically difficult to ever implement, at least as envisioned in the Patient Protection and Affordable Care Act.  As long as employers are allowed to set their own eligibility rules, verification will be time-consuming and difficult to automate–not impossible, technically, but difficult and intrusive and expensive, which means that it might be impossible, politically and financially.

This has, I pointed out, big fiscal implications: offering subsidies only to people who can’t get insurance through their employer saves the government a lot of money.  Allowing people to apply for subsidies under the honor system, rather than actually verifying, probably means a lot of extra money going out the door–money which, I pointed out, turns out to be very difficult to get back if you realize later that you’ve paid too much.  Under the new law, the IRS isn’t allowed to claw back overpayments or collect fines  the way it normally does–slap a garnishment order on your paycheck, levy your bank accounts, and in extremis, seize your home or other assets.  All they can do is take it out of any payments that they owe you.

But Yuval Levin, an ultrawonk who appears to have had the entire text of the PPACA tattooed on the inside of his eyelids for quick reference, emails to say that the government’s ability to recover overpayments is even more limited than I realize:

One thought on your point that “One suspects that income verification may be not far behind; they’ll let the IRS sort it out at tax time.” The Obamacare statute really limits the ability of the IRS to sort it out and recover overpayments at tax time. And this is not only because it can only recover payments by reducing people’s income-tax refunds (which not all people have of course). There’s a more explicit barrier: In section 1401, the statute limits the amount of excess tax credit that any person with an income under 400% of poverty would have to pay back. (That begins at the very bottom of page 116 and into 117 in this final text of the law, under the section “Excess Advance Payments). The original statute limited the amount that could be clawed back to just $400. Then in the Medicare extenders bill they passed at the end of 2010 (see the table at the very end of the statute), Congress increased that amount and made it a graduated amount based on income, so it now ranges from $600 to a maximum of $3,500 for a family (half that for an individual).

CBO projects that the AVERAGE subsidy in the exchange would be worth $5,290. So the amount they’re able to claw back from people who have incomes below 400% of poverty but receive subsidies they shouldn’t (because they report a lower income than they have, falsely claim not to have been offered qualifying coverage by an employer, or report a higher income than they actually have in order to receive subsidies instead of Medicaid coverage) is likely in most cases to be significantly lower than the amount of excess payments.

“Delaying” employer reporting and income verification means more people are likely to do this and the IRS is less likely to know about it (they won’t know about people falsely claiming they don’t have an employer offer, for instance), so that even if the IRS collects back everything it possibly can at tax time, which is unlikely, there would be a major gap, and the risks people take by filing fraudulent applications are fairly limited (as you have noted before, the tools permitted to the IRS to go after excess payments are very limited). 

The potential for massively expensive fraud, or even massively expensive confusion, is just enormous. The system doesn’t make sense without some meaningful prior verification, but as you say it’s not clear that such verification is technically achievable.

The problem is that the law depends on it.  I’ve frequently compared the law to a Rube Goldberg machine–all the parts have to work just so for the thing to come off–and this is a perfect example.  In the comments to one of my healthcare posts, commenter BronxCobra is making perfectly reasonable suggestions for a corporate IT implementation–scale back the scope, don’t do the verification real-time and instead run daily or weekly or monthly reports to verify peoples’ income against the income they reported on the form.

But this is not a corporate IT implementation where you can patiently explain that we need to reduce the scope.  There’s a law.  With a lot of moving parts.  And those moving parts were designed for real time verification.

In part that’s for political reasons.  People getting subsidies in Massachusetts right now get Commonwealth Care, a limited set of managed care plans heavily overseen by the state and apparently partially funded by a federal Medicaid waiver.  You apply for it the way you do for Medicaid–send off an application, and in a few weeks you hear back.  As I understand it, they do manual verifications of eligibility–not a terrible process, because the uninsured rate in Massachusetts was low even before Romneycare passed.

For obvious reasons, the Obama administration did not want to tell folks that if they needed subsidies, they would be given access to a handful of HMOs.  Nor that they would go onto the exchanges and be told to print out a paper application they could send to their state’s Medicaid office.  That law would never have passed Congress, or the public.  So they announced that everyone above 133% of the federal poverty line would get access to the same set of plans on a nifty exchange, with the government subsidizing the premiums to make it affordable for families making up to 400% of the FPL.  The exchange would automatically calculate your subsidy based on the information you gave it, and enable you to purchase insurance at the subsidized price immediately.  And the exchange would verify that you actually had the income you said you did, as well as a few other things, like whether you were a citizen or legal resident.

All of this stuff had to be done up front, because one of the things they had to do in order to sell the bill was promise that the IRS would not be emptying out peoples’ bank accounts in order to reclaim excessive subsidies.  Maybe that was a bad promise that shouldn’t have been made, but they did make it, and I’d argue that they had to in order to get the law passed.  At this point, the IRS’ recovery abilities are so crippled that it would be folly to issue subsidies first and ask questions later.

And the subsidies have to be given up front; Folks making $50,000 a year cannot be mandated to buy a $1,000 a month insurance policy and told they’ll get their subsidy back at tax refund time.  

But it’s starting to look like both of these things cannot happen, at least not in the near term. The alternatives are to delay the whole bill, or resign ourselves to hemorrhaging wads of cash.  The IT expert’s instinct to hold things together with some inelegant intermediate kludge won’t work.  All the elements of the law are so tightly coupled that pulling one out makes the whole machine go haywire.

Obviously, the preference of the law’s supporters is to hemorrhage cash.  Just go ahead and hand out subsidies indiscriminately, the better to build political support to block repeal.  But this seems . . . well, I’m struggling for kinder words, but I can’t find any.  It seems wildly irresponsible. Not to mention a fundamental betrayal of the promises that were made to get the law passed in the first place.

 

103 thoughts on “The Employer Mandate: A Necessary Impossibility

  1. It’s really quaint how both you and Yuval, Megan, are still so wedded to this archaic notion that “the law as written” somehow hamstrings the IRS or the administration more broadly in their capacity to act to implement their grand new vision for a better healthcare system for all Americans.

    The law, of course, forbid subsidies for federal exchanges but they’re happening anyways; the law contained the employer’s mandate with no allowance for waiver or delay but it’s at least delayed; the law required income verification but that’s not happening either.

    But then you’re worried that the IRS won’t be able to claw back fraudulent overpayments because “under the new law, the IRS isn’t allowed to claw back overpayments or collect fines the way it normally does”. Sure, and there’s simply no way that the IRS would ever in a million years do something explicitly forbidden by law. That would be as crazy as just deciding to offer subsidies that weren’t included or just chopping out bits of a law that you decide you don’t like or are too tough, right?

    I think similar logic probably applies to your worries about the ACA collapsing under it’s own rube-goldberg interdependencies. Sure, it would probably collapse if one expects that the law as written need bear any relation at all to the policy as implemented and enforced but that is clearly not the case. The Obama administration will simply come up with a workable healthcare policy that meets their goals and implement that regardless of what “the law” says they are ‘allowed’ or ‘required’ to do.

    And I think even you will see that the results are better not only than the original bill as written that you seem so beholden to but are also better than any conceivable healthcare policy that ‘could actually get passed by Congress’ or ‘gain the support of a majority of the citizenry’. This is the genius of progressive governance: our betters need not be restricted by obsolete limitations on power like the constitution or the courts or the legislature and instead can let their fertile imaginations soar as they boldly lead us into the sunny highlands of a post-political, post-historical utopia.

    • “The Obama administration will simply come up with a workable healthcare policy”

      For esoteric values of “workable”

    • “The law doesn’t matter, because the executive isn’t bound by it and can do whatever it wants.”

      I know enough people that think like this that I can’t even be sure anymore. Is this satire? This is satire, right?

    • Cute. It seems pretty obvious to me that Obamacare is just another way to take money from taxpayers and give it to non taxpayers. That’s been the modus operendi of the Obama administration from day one. And yes, thinking that Obama will actually follow the law is pretty naive.

    • Your attempts to be wildly satirical and your attempts to co-opt the impassioned language of the other side are, it would appear, converging rapidly. The Blighter Singularity is very close.

    • @Mouse, it is perhaps a mere coincidence that straddling the line between impersonation and comical exaggeration gives me the plausible deniability that may soon be valuable in proving my loyalty to the ruling progressive elite and demonstrating that I have always publicly and emphatically expressed nothing short of unbridled enthusiasm for their every dictate. Or perhaps not.

    • I don’t care if my state and church prohibit it: I am going to same-sex marry the fuck out of you!

    • Come into the light, MM. You get so very close and then you turn away. You, to your credit, try to believe that the Administration acts in good faith. Just let it go. The truth will set you free.

    • Wait. “there’s simply no way that the IRS would ever in a million years do something explicitly forbidden by law,” you say sarcastically, in reference to almost no provision for the IRS to claw back an undeserved subsidy.

      You’re overlooking a very clear objective of ObamaCare, which is stated in Megan’s post: to hemorrhage cash. No one is going to be fined or repo’d under this law.

    • “No one is going to be fined or repo’d under this law.” I wouldn’t be so sure on that point, FACELESS.
      An IRS which can devote unlimited resources to punish those who advocate such radical ideas as demanding accountable government will find themselves on the receiving end of endless scrutiny and demands for lengthy disclosures of whatever the IRS wants them to disclose.
      This law will be ruthlessly enforced upon everybody who originally opposed its implementation. All its early fans have already applied for and recieved exemption from its provisions.

  2. THANK YOU for a beautifully written complex analysis I am NOT seeing anywhere else. I can think of a million questions but here is the first: where do the subsidies to? Directly to insurer? So is it like free money for them and they’ll all dive into the exchanges now since money being tossed around? What is incentive for someone to enroll? If it is just a subsidy for care and goes to insurer only then I am not sure that’s enough incentive to enroll. What does this do to exchange prices? Care utilization?

  3. I see two possible outcomes right now: 1. The ACA crashes and burns, and congress cries “We need single payer!” 2. The ACA crashes and burns, but employer-provided insurance crashes and burns with it. So most people are uninsured. At this point, catastrophic insurance comes back into play, with self-pay for most normal health events. (My family currently self-pays. Even with a pregnancy and childbirth this year, we’ll still come in well under what we would have spent on insurance. In fact, many doctors give a deep discount for immediate payment with no need for paperwork.)

    • I’ve been thinking about #2 for some time. Don’t forget this consequence: health insurance and employment are de-coupled, thus killing this distortion of the labor market and restoring us to pre-FDR wage reality.

      The PPACA has many names. Its latest: The Law of Unintended Consequences.

  4. For verifying employment based insurance, would it be easier to try and get the data from the insurance companies than the employer? I.e., instead of a database talking to every employer in New York, can’t the NY exchange just talk to the 20 or so insurance companies serving New York and ask “Hey, is John Doe, SSN: 123-45-6789 insured through you? If yes: give details of plan”

    • No, because what you need to know is not just whether they have insurance, but whether they’re eligible to buy it. About which the insurer has no idea.

  5. BTW– Megan, I just wanted to say thank you for posting again and making my morning reading interesting! And, maybe it’s just because I was prejudiced against the Daily Beast, but these recent posts seem more like the McArdle I’ve been following from blog to blog over the years! It’s nice to have you back.

    • I think a big part of the difference is that the idiots stayed on TDB, and only the decent commenters moved.

    • Alsadius – Well, I wouldn’t call myself a decent commentor…. but I do enjoy reading the comments that have moved over here…. No ad hominem attacks! No weird complaints!!!

      However, I also have noticed that Megan’s Posts have gotten less general and more involved since the move. I like her better when she’s writing to her own requirements. I hope Bloomberg lets her fly free!

      I wonder how many of her regular readers actually looked at anything else on the Daily Beast Site. At the Atlantic, the ads were usually for other articles that interested me….. at Daily Beast they seemed to be unable to divine what I wanted to read about. Bad algorithms? Or lack of selection? I’m not sure…..

  6. Can you come at this from the other direction? Is there anything that proponents of this bill were correct (I’d prefer to write honest, but I’m going to be polite) about?

  7. The ends justify the means. And the end here is single payer. Doesn’t matter how many lies are told to get there.

  8. Call me paranoid, but this is looking more and more like a third party payer system. Granted, that is a system where users receive vouchers (“subsidies”) to buy insurance, rather than a system where the state pays for care directly, but it’s still a form of third party payer system. My guess is that the government will subsidize anyone with a heartbeat and the next Congress will be left with the following choice: either continue this and enshrine a universal voucher system, or repeal Obamacare and actually take a *lot* of people off insurance, which will be politically difficult.

    • I want to throw something out there. The fakers who get undeserved subsidies by abusing the honor system will know that their game can’t go on indefinitely. They’re not the types who feel entitled; they’ll just feel clever, and when the game is up they’ll chuckle, count their wins, and maybe destroy a few of their records. I don’t see them raising hell and demanding that the gravy train roll on.

    • perhaps this is simply single-payer through the back-door. Get everybody on the subsidies by encouraging them to take advantage (similar to food stamps), and by golly look at that everybody is in the government’s single-payer system.

  9. Megan,

    Interesting post but I think you are missing the point when you say the law depends on the government’s ability to clawback overpayments. The law doesn’t depend on that at all. The financial projections depend on that but not the law itself.

    I think you were far closer in last night’s post when you said the supporter’s don’t particularly care about the cost estimates, they care about the extension of coverage. As long as that happens, all is well.

    In my view, there’s nothing in the employer mandate delay or the other conveniently ignored provisions of the law that prevents the government from extending coverage. Yes, there may be less coverage extension (because employers drop people) or higher costs (for the reasons you cite) but that’s really not the point.

    The point is that “any country as rich as the US should provide health insurance to all of its citizens and the ACA is a step in that direction.”

    Everything else is just part of the sales job.

    • You are close to being right, but there is a hitch- the bill itself contains its financing. As the structures for paying for it fall apart, it opens the entire structure to repeal by inaction.

    • Not sure that’s true Yancey. Yes, the bill has financing provisions within it but there’s nothing there that says the financing provisions need to balance, at least that I’m aware of.

    • Then each Congress is going to have to appropriate the additional funds each fiscal year. Remember, the PPACA was going to be a net deficit reducer- so it literally was expected to pay for itself by the financial mechanisms included within. It is pretty clear this isn’t going to happen now, so Congress will have to actively add funds to pay for it.

    • Also, I think we already decided the law doesn’t matter, so this should all be solved by a new 95% wealth tax on people named Koch.

    • No, no, TallDave. A 95% wealth tax on people named Koch would clearly be an unconstitutional bill of attainder.

      Rather the IRS will announce — via blog post just before a four day holiday weekend — a new clarification of a seemingly uncontroversial small bit of the existing tax code in such a way that a 95% wealth tax is now mandatory for all American citizens.

      Then the Obama administration — in keeping with their longstanding dedication to pragmatism and the sensible & thoughtful implementation of common-sense public policy — will bow to economic exigencies and the public interest as represented by large businesses and rich people who publicly support them to temporarily waive collection of the new wealth tax for the vast majority of citizens.

      The citizens who do not get a waiver may or may not be disproportionately named Koch and/or engaged in unproductively non-progressive civic engagement but delving into that would clearly demonstrate that the delver is a right-wing fanatic suffering from advanced paranoia most likely induced by their unrelenting racism against the first black president, as this is just a simple rule clarification of the kind every prior administration has implemented without any furor of any kind and thus is the epitome of good governance.

      The best part, though, will be the inevitable post by Megan going through lengthy, erudite explications of arcane bits of the tax code in an attempt toward understand the implications of this clarification and waiver scheme on the rest of the multi-thousand page tax code as if anything that were actually written down in any way mattered to the people ruling us.

    • blighter, I’m thrilled to see you on Megan’s latest blogsite, but please, please don’t give liberal politicians such ‘practical’ ideas……

    • And any attempt to investigate why only a few people are not waived will be met with a parade of govt bureaucrats pleading the fifth, and the MSM screaming “Look, over here! A squirrel!”

  10. I wrote as much in a reply below, but will reiterate it. The things that are falling apart are the financing structures of Obamacare. The real question is what happens when HHS must come before a future Congress asking for funds to pay for it?

    • I can answer that – TV news will run stories about how the (photogenic) John Doe family is going to lose their health insurance. The commercial break will have an ad showing some litlle child in a hospital bed with a Republican lookalike pulling the plug.

      Then the Fed will print an extra trillion dollars.

    • SG is right. It’s one thing for Congress not to extend coverage, it’s another to take back coverage once it’s been extended.

  11. At least Obama is trying to give women, children, minorities, and gays access to health care, unlike the Republicans, who want to restrict it to themselves.

    • I believe that the accepted number of people who were without health insurance prior to this monstrosity was in the range of 10-15% of the population. If as you say only Republicans had health insurance, then 85% of the country must be Republicans. If so, how did this law get implemented if 85% of the country opposed it? Idiot.

  12. The entire purpose of ObamaCare is to break the private insurance model so that the state can “rescue” the public by instituting single-payer, state-controlled healthcare. The state will decide what conditions are recognized as illnesses, what treatment options are available, how long you wait, and how much you pay. If you’re in a politically favored class, well, you’re probably okay, they’ll cover whatever you need. If you’re rich, you can always go with medical tourism. If you’re not in one of those categories…you’re in for a rough ride.

  13. Yeah, I’m sure all the people who barely qualify for minimum-wage work will have no problems figuring all this out.

    But remember, this is the Obama admin we’re talking about, so all that really matters is that Obamacare’s failure lets them attack the GOP somehow. Jobs #1,#2 and #3 are schlepping for votes, implementation of stuff they passed such that it might actually benefit anyone is somewhere around #4,719.

  14. It seems wildly irresponsible. Not to mention a fundamental betrayal of the promises that were made to get the law passed in the first place.

    Well, the law itself seems wildly irresponsible, and no sane person should have trusted a word of their promises, which were implausible even by political standards.

    Frankly, they should just repeal the damned thing.

    (God help us if they ever get to ram through single-payer.)

  15. You assume that Obamacare was ever really intended to work.

    “Look, those mean old Republicans took away your free lunch! The only solution is to give me more power to stop those nasty old white men from giving you the free lunches you deserve!”

  16. Look, there was never any serious effort to make sure this law could work–what’s happening is absolutely, completely predicable. The same disaster in the details will occur if “comprehensive” immigration reform ever gets passed. These bills are simply too complex–and change too rapidly–to be understood except deep into implementation.

  17. In all of the discussion of ObamaCare, I never have read what they are doing about people with income, but no employer.

    This includes small business owners (who’s the employer?), programmers and lawyers who work on contract, authors who sell a book every year or two, etc. Plus ordinary people who work a mix of temp jobs, cash jobs and part-time jobs.

    None of these people have a standard employer with regular paychecks. They also have no concept of a ‘yearly income’. When they are between checks, are they unemployed? If you tried to figure their subsidy, would it be based on current finances (haven’t been paid in months) or yearly averages, or what?

    Congress seems to have written this imagining that everyone works a 9-5 job at some place of business.

    • Megan has actually raised some of these very same issues in some of her previous work. I think the law does have some provisions for folks like these, but how realistic they are, well I haven’t read the bill.

  18. Re: “It seems wildly irresponsible. Not to mention a fundamental betrayal of the promises that were made to get the law passed in the first place.”

    Since when as either irresponsibility or betrayal impeded government actions?

  19. Question: why does this all have to be done through IT? What about old fashioned paper. For example, here are some proposed rules:

    1. Each employer has to give all of its employees prior to October 1 a letter about health insurance. The letter could say (A) “We do not provide health insurance to Employee X” or (B) “We offer health insurance to Employee X, and the cheapest option that qualifies for Obamacare purposes costs $A/$B/$C for single, H&W, and family care, respectively”.

    2. When the employee applies for subsidized coverage, he needs to provide a copy of the letter. If the letter isn’t provided within a month, the subsidy is withdrawn.

    It’s not a perfect system, but it’s better than the honor system. In the future, when we mandate that every business get Peoplesoft, we can integrate HHS thought Peoplesoft. Until then, why not paper?

    • A couple of thoughts.

      1. The potential for and value of fraud in this system would be gigantic. Why wouldn’t someone create a business that specializes in the forgery of such letters? Clearly the business would be “for entertainment purposes only” but undoubtedly many would see the value in doing so.

      2. How large of an army of people would you offer to hire to process the letters from 150 million or so people and get the information entered into the database?

      3. What adjudication procedures do you envision in the event of “canceled subsidies?” How many stories about poor Aunt Mabel who lost her subsidy check because her evil employer never sent her a letter (according to her), not to mention coding errors, confusion over SSNs, etc. do you think it would take before the program collapse of its own weight?

      4. What level of data security do you think would be implied by all of these letter flying around?

      The only good news is that it might be a way to push the Post Office closer to the black.

    • The subsidies are continuing, and the letter is not. For example, think of an employee working at Company A, which does not provide insurance. In January, he gets his letter, applies for the exchange, and gets his subsidy. In February, he change jobs to Company B, which does provide health insurance–but not a package that the employee wants, because he’s better off with the subsidy. There is nothing that provides information to the system that the subsidy should be withdrawn.

    • @SteveinCH -

      1. Yes, there is potential for fraud. But probably less fraud that simply having the honor system!

      2. I don’t think we’re talking about 150 million people applying for subsidized health insurance. Maybe 20% of that? And, sure it would take people to process these things. How many, I don’t know.

      3. Good question, but we deal these questions in other contexts. Your employer never gave you a W-2 or 1099. Your car registration has the wrong address. It’s dealt with. Maybe slowly and poorly, but still.

      4. I get sent tax forms, drivers licenses, all kinds of things in paper form. It isn’t perfect. But somehow it all mostly works out.

    • @No_Rush – your new employer gives you a letter when you get your job there, and you are supposed to send that letter to HHS. They process it and figure out if you are still getting subsidies. Will people ignore that requirement? Sure, some. But, again, it’s better than nothing!

    • A.S. You are correct that your proposal will prevent people who did not intend to commit fraud in the first place from committing fraud. This is indeed “better than nothing.” In the same sense that I would rather have 999 lashes than 1,000.

    • If your employer doesn’t give you a W-2 or 1099, then either (a) they did give one to the IRS, in which case it doesn’t matter much or (b) they didn’t give one to the IRS, in which case the IRS will go after the employer.

      The way that we deal with the employer failure to give a W-2 to a worker is the simultaneous requirement that the employer file the same information with the IRS. The analogy in this case would be… the information required to be reported as part of the employer mandate.

      There’s something a bit circular about your logic.

    • @No_rush – believe me, I am no fan of Obamacare, and will be perfectly happy if it goes down in flames. But as a theoretical exercise, it puzzles me why the government can’t make it work — not at an A+ level, but even at a D- level.

    • You seem to be under the impression that paper systems are easier to implement. They aren’t. Someone who is going to defraud the system electronically will defraud it under your paper-based system as well. So we can shuffle mammoth amounts of paper to achieve precisely nothing.

  20. I’m not sure that the real impediment to recovering money from those who get subsidies is the provisions of the law that forbid the IRS to go after assets. Let’s assume that the Obama administration “delays the implementation” of those sections of the law until the employer mandate is in place. You’re still left trying to claw back cash from those eligible for subsidies, the vast majority of whom are what is politely known in the legal profession as “judgment proof.”

  21. One other thought, a point that both you and Mr. Levin seem to have missed: while we may be overpaying for subsidies, the lack of information means that we will never know how much we’re overpaying for subsidies. This will allow supporters of the legislation to steadfastly object that because we can’t prove that this fraud is widespread (because we’re not collecting the information), that fraud is not occurring.

    SUCCESS! Where success is defined as avoiding the proof of failure.

  22. I have a related question – why does anybody think single payer is actually a good idea? Various commentors seem to hope for “it blows up and we get single payer, yea!” – yet the most famous single payer system (Britain NHS) is apparently controversial and widely disliked, and single payer is not what is actually used lots of places in Europe. So why (aside from, well, communist mindset) does anybody think single payer is a good thing?

    My personal take is that this may all blow up in a way that sullies the reputation of Obama and the democratic party, perhaps really badly. Perhaps for a really long time. We’ll see.

    • why does anybody think single payer is actually a good idea? Well, it does accomplish the goal of increasing state power and control over individuals. There are other ways to provide public subsidy of health care for the poor, but they look more like welfare than a universal health system does, and so they don’t win as many votes for the politicians who promise to keep them going.

    • Apparently many American leftists are wedded to the notion that single-payer health care is some paradise right around the corner. When you mention the horror of the UK NHS, they dismiss it out of hand as lies or wrecking.

    • “why does anybody think single payer is actually a good idea? “

      Because it provides the illusion of getting something for nothing.

      Behind all the lofty rhetoric regarding the tragedy of people in America going without medical care – the reality is that supports just want free stuff – in this case ‘health insurance’.

    • Well, as Megan says, “the exchange would verify that you actually had the income you said you did, as well as a few other things, like whether you were a citizen or legal resident.”

      In context, that’s “the exchange WOULD HAVE VERIFIED” etc. Is there still a check *anywhere* on SSNs?

  23. a fundamental betrayal of the promises that were made to get the law passed in the first place.

    Someone overlooked the penumbra of those promises. There’s a lot of stuff emanating that we can’t even see just by passing it into law.

    Nice new digs, BTW!

  24. What happens when insurance companies have to accept all customers, all buyers get huge discount just by asking for it, and there are no significant penalties for failing to obtain insurance?

    Insurance rates skyrocket. Even with subsidies, insurance becomes a losing bet for all but the most sick and the most poor. With no penalties being enforced, everyone else drops their prepaid health care. The insurance death spiral is accompanied by an upward spiral in government spending.

    Progressives believe that this will lead to single payer health care. They are wrong. It will lead to highly rationed, heavily subsidized health care only for the very sick and very poor. That’s all the taxpayers can afford to support and that’s all they will agree to support.

    Everyone other than the very sick and the very poor will either self-insure or buy actual insurance. By actual insurance I mean catastrophic insurance, not prepaid health care that calls itself insurance. Catastrophic insurance policies will promise to keep their buyers safely out of a single payer system which will be afflicted by rationing and abuses much worse than in Britain’s current NHS.

    When government picks a fight with markets, the markets always win. Progressives’ effort to defeat market forces in health care will end in a greater restoration of free markets in health care than libertarians ever hoped for.

  25. What happens when insurance companies have to accept all customers, all buyers get huge discount just by asking for it, and there are no significant penalties for failing to obtain insurance?

    Insurance rates skyrocket. Even with subsidies, insurance becomes a losing bet for all but the most sick and the most poor. With no penalties being enforced, everyone else drops their prepaid health care. The insurance death spiral is accompanied by an upward spiral in government spending.

    Progressives believe that this will lead to single payer health care. They are wrong. It will lead to highly rationed, heavily subsidized health care only for the very sick and very poor. That’s all the taxpayers can afford to support and that’s all they will agree to support.

    Everyone other than the very sick and the very poor will either self-insure or buy actual insurance. By actual insurance I mean catastrophic insurance, not prepaid health care that calls itself insurance. Catastrophic insurance policies will promise to keep their buyers safely out of a single payer system which will be afflicted by rationing and abuses much worse than in Britain’s current NHS.

    When government picks a fight with markets, the markets always win. Progressives’ effort to defeat market forces in health care will have the unintended consequence of restoring market-based health care. Unexpectedly.

    • Well, I certainly hope so! Market-based healthcare is less wasteful, too. For instance, when I had insurance, the docs always included a 20 week ultrasound, because insurance covered it. Now that I’m uninsured, I discover that those are not actually medically necessary! $500 is a lot for some extra scrapbook pictures!

  26. On a tangential note, what HTML tags are valid in comments? I just discovered quote doesn’t work, though it appears blockquote does…

  27. ObamaCare put up for adoption

    It happened in the dark of night. The Democrat president and the Democrat congress had consensual relations. And out of that coupling, a law was conceived. The proud parents decided to call it the Affordable Care Act but it goes by the nickname: ObamaCare. When the advent was announced the Greek chorus in the media burst into glad hosannas. Their savior had brought medical heaven on earth. This miraculous offspring was perfect.

    The infant baby ObamaCare would provide insurance for everyone, healthy or sick, lame or blind, young and old and it would make everyone’s insurance bill fall by $2500 per year.

    If for some reason you were happy with your rotten old doctor and your rotten old insurance you could keep it; you Neanderthal.

    It would take care of the deficit (remember that promise?)

    It would lower the oceans and heal the planet. No, I made that up. The oceans began to recede and the planet to heal when Obama was elected. That was even before ObamaCare was a gleam in Obama’s eye.

    And those evil, dastardly, racist, bigoted, homophobic Republicans wanted to abort this beautiful baby.

    But they did not get their way and ObamaCare was born.

    Strangely enough, (or as Glenn Reynolds likes to say “unexpectedly”) the baby did not live up to its promises. In fact he did not live up to any of its promises. Surprise: no universal coverage, premiums are up, health care plans were dropped and changed right and left, doctors (those not retiring) are changing their practice to eliminate insurance payments, and the deficit and the debt continue to rise. It turns out that costs are so high that only really stupid young healthy people would sign up for ObamaCare.

    This is one ugly baby.

    So the proud parents and their Greek chorus want to put their baby up for adoption. How do I know? The press, in the person of my local paper, the Virginian Pilot (a charter member of the Obama Greek chorus) has suddenly announced that “Congress Must Fix Healthcare.” After taking the obligatory shots at conservatives, they make the astounding concession that their toddler may be “fundamentally unworkable,” even “wildly overcomplicated.” They profess to see “major surprises” as implementation moves forward. They are gob smacked that taking control of one-sixth of the US economy is not going to be smooth and simple because the ones in charge are the “ones we have been waiting for.”

    So they now want “congress” to fix it. But “congress” did not conceive it; Democrats did. The act was not consummated as a ménage a trois. Republicans were not invited to participate as this wedding was consummated. There is no question about this baby’s parents. No DNA tests are needed.

    What the press means by “congress” is really: “Republicans.” They want Republicans to adopt this infant Frankenstein and help it grow. But repeal it and start over? No way. This is their baby, the one they wanted, their precious snowflake. They just want to pretend that the way it came out isn’t their fault. They want somebody else to take the responsibility for keeping it alive and raising it.

    And if Republicans fall for this they will once again prove that they are the stupid party.

  28. Why on earth do you think handing out unwarranted subsidisies and being unable to retrieve them is a FLAW?

    I suspect it’s working as designed. If they could get people to vote for Obama by giving them free phones, how many can they get to vote with this loot?

  29. What CAN be clawed back and what WILL be clawed back are two different numbers, since each clawback will cost one vote.

  30. “Obviously, the preference of the law’s supporters is to hemorrhage cash. Just go ahead and hand out subsidies indiscriminately, the better to build political support to block repeal. But this seems . . . well, I’m struggling for kinder words, but I can’t find any. It seems wildly irresponsible. Not to mention a fundamental betrayal of the promises that were made to get the law passed in the first place.”

    Cloward-Piven? There is so much of this indiscriminate handing out of subsidies and benefits in this administration that it’s hard not to believe they are following the advice of the two leftist sociologists and to achieve the same ends.

  31. I wonder if the Supreme Court anticipated the Obama administration would take advantage of the lack of standing in the California gay rights case to ignore black letter law. Notice these announcement of changes in ObamaCare have come after that decision.

    Is it not ironic that the Supreme Court in “upholding the law” has encouraged lawlessness by executive branches everywhere?

  32. All the printing presses in the world couldn’t print money fast enough to pay for the “machine” that the commenter deems that the Regime will finally CONcoct, once the Constitution and other laws are finally tossed into the ashcan of history.

  33. You have mentioned a couple of times (particularly in a previous post) the IRS’ inability to monitor/verify income in real time for verification purposes. That is true. The only way that I see that being possible (absent employer verification) is with information from the Social Security Administration (SSA). While witholding amounts are set to some extent by the wage earner, the amount taken out for Social Security is not. Soc Sec witholding information would give an indication as to what the individual was making. Now comes the hard part (particularly from an IT perspective). The SSA databases must be huge, and they have been around forever. Integrating that with the IRS (which went through tremendous growing pains – and lawsuits against the prime contractor – when they tried to upgrade their IT systems) would be a daunting task. Oh, and the security and PPI (protected personal information) issues would also be “fun” for any integrator.

    PS. I can’t tell if you were being honest, cynical, sarcastic or ironic when you made mention of your feelings regarding the government’s promises regarding PPACA, but it should be remembered that government representatives testified in Congress that the Social Security number would never be used as a form of identification. Enough said.

    PPS. Regarding your earlier comment about separating health insurance from employment, it should be remembered that this all started to counter government intervention in the economy during WWII. FDR wanted to minimize the disruptions to war production caused by workers leaving one job for another as employers competed for labor through wage hikes. To do this, he instituted wage controls. To get around this, Kaiser Industries started offering health benefits to workers (since they couldn’t raise wages). This practice caught on to the point where it has now assumed the status of a “right”, and those employers who don’t offer it are now held up for scorn.

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