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Repeal of Individual Mandate Was Obama’s Plan All Along

From the diaries by Leon…

With news that a federal judge in Florida has declared the entirety of Obamacare to be unconstitutional, the left has reacted with predictable outrage. Cries of “activism” have echoed throughout the editorial pages, news networks, and university halls, and just about everywhere else liberals dominate. But while Democrats express their near uniform consternation, there is one notable leftist who is hoping for at least a partial repeal of Obamacare, and that would be President Obama himself. Ironically, the section he wishes to be repealed is the section his justice department argued in federal court to be the most important: the individual mandate, which forces every American to buy health insurance. The President wants it repealed because only it stands between him and his dream of a single payer system.

To understand how and why, one must first understand the purpose of the individual mandate. In short, it forces younger, healthier people to buy insurance, even though in most cases that would be more expensive for them than simply paying out of pocket. The insurance company, after all, is simply a middleman, and it is always less expensive to pay for something directly than to pay a middleman.

But Obamacare forces those healthier people to buy health insurance they don’t need specifically because these people will pay far more in premiums than they will collect in benefits. This creates a large surplus of money for the insurance companies. This is needed to offset the losses the insurance companies will suffer by Obamacare’s requirement that the insurance companies offer policies to people with preexisting medical conditions (i.e., people who are already unhealthy) at the same price as policies for everyone else. This price parity is required even though the unhealthy class uses far more resources, meaning that the unhealthy people will pay much less in premiums than they will collect in benefits.

This, effectively, converts the insurance companies into charities. The result is that the insurance companies are left with no choice but to increase the rates for everyone else, in order to cover the losses they will sustain due to the new enrollees who are not paying nearly as much as they take out. So, the healthier members of the insurance pool are forced to pay not only for their own medical care, but also to partially subsidize the care of the new, unhealthy members of the group.

When this was tried in New York in the early nineties without an individual mandate, the healthier people already in the insurance pool soon figured out that it was less expensive simply to pay for their medical care out of pocket rather than pay the insurance companies’ increased rates, and they opted out of their plans. This meant there were less healthy people left in the insurance pool to subsidize the sicker members, so rates had to be raised even more on the remaining members. When the rates continued to increase, more people dropped out, resulting in more rate increases, etc., etc., etc., thereby placing the insurance companies spiraling down a one way street to bankruptcy.

The individual mandate in Obamacare exists to solve this problem, forcing people to buy in and stay in, whether they like it or not, not for their own benefit really, but because their premium payments are necessary to subsidize the charity cases. Effectively, it’s a government imposed tax, with private insurance companies being conscripted to act both as the IRS and as entitlement programs. Obama didn’t need to win a public option, he simply turned the insurance companies into the public option.

But that was never Obama’s endgame. Prior to becoming president, Obama made it clear that his goal was to establish a single payer system where the government would have an absolute monopoly on healthcare (as though a monopoly ever benefits the consumer). On June 30, 2003, speaking to an AFL-CIO Conference, he said “I happen to be a proponent of single payer universal health care plans. . . A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately.” Then, in a 2007 interview with the Service Employees International Union, he stated: “I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process, I can envision in a decade out, or fifteen years out, or twenty years out.”

Obama, however, was being pessimistic. Again, as the bill is currently composed, only the individual mandate stands between Obama and his goal of destroying the private insurance companies. The mandate was never his idea in the first place (in the Democrat primaries, Hillary Clinton favored it, Obama explicitly did not), and it was only included in the final bill because Congress would not support Obamacare otherwise. They, apparently, were not as eager as the President to bankrupt an entire industry, and along with it, one seventh of the American economy.

But the Supreme Court may just do Obama the favor that Congress would not. Two federal courts have already ruled the individual mandate unconstitutional, saying Congress has no authority to force Americans to buy anything. But unlike the Florida court, which voided the entire bill, a federal judge in Virginia ruled that while the individual mandate was unconstitutional and must be stricken, the remainder of the bill could be preserved. Given the ideological divide on the present Supreme Court — four conservatives, four liberals, and one moderate — it seems very possible, if not entirely likely, that this would be just the sort of compromise that the nine justices would reach.

If so, it would be the exact result that the President is hoping for, and when one considers that Obama is a former professor of constitutional law, it is hard to believe he did not plan it this way all along. It may well be that the only miscalculation he made was how long it would all take to come to fruition. Indeed, if the Supreme Court accommodates him, a single payer government monopoly will result much sooner than Obama’s fifteen to twenty year projection.

Buyer beware.

By Jordan B. Rickards

www.RickardsReview.com

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