Repealing the Individual Mandate Without Repealing ObamaCare Is Dumb

Posted at 11:00 am on November 15, 2017 by Patterico

You have already heard me rant and rave about how the GOP tax bill is a tax hike on the middle class (primarily the professional middle class in large urban areas) to pay for tax breaks for the super-rich. The Senate version of the bill is no different in that respect — in fact, it’s worse, eliminating deductions for all property taxes without even the $10,000 cap included in the House bill. But the Senate version released yesterday comes with yet another stupid idea: repealing the ObamaCare individual mandate . . . without repealing ObamaCare.

You’ll find no more fierce opponent of ObamaCare than myself. It’s exactly the sort of Frankenstein monster you’d expect when central planners assume control over a huge of the economy. But you can’t fix the monster by giving him a new right arm, three new toes on his left foot, and tightening the bolts on his neck. The monster has to be destroyed.

The problem is not, as some might try to tell you, that ObamaCare “won’t work” if the individual mandate is repealed. ObamaCare won’t work and can’t work, period, no matter what — because central planning can’t work. What ObamaCare does is monkey with supply and demand for a product: health insurance. The law mandates it be supplied at prices that would be unavailable in a truly free market (guaranteed issue). This is effectively a form of price control, which generally creates a shortage. The law then tries to compensate for the effects of the price control by mandating purchase of the product by legal fiat.

The unpopular mandated purchase provisions do compensate somewhat for the popular price controls, but in the absence of a free market any such central attempt to balance prices is always doomed to fail. It’s hubris on the part of the central planners to think they can succeed. The key lessons of the failed experiments in socialism in the 20th century have not been learned — and probably never will be.

The market is a wondrous mechanism that ensures, almost as if by magic, that demand for goods is balanced by a supply of the desired goods. But thanks to various forms of government intervention, including federal tax policy and federal and state regulations, we had not had an actual free market in health care or health insurance for a long time, even before ObamaCare.

ObamaCare’s dog’s breakfast of mandates will never be a sustainable, functioning mechanism, and removing one mandate does not solve the problem of skyrocketing health care costs and rising premiums. It will almost certainly make it worse. This is why previous efforts to repeal only the individual mandate while leaving the rest of ObamaCare in place have gone down to ignominious defeat. It’s horrendous policy, and no honest person can really dispute this.

But when it comes to doling out tax breaks to the rich, horrendous policy is just the ticket. Anything to provide a paper credit to balance the goodies handed out to big donors.

And the public will like it. Nobody will analyze this from first principles, the way I just did. They’ll just say: “hur hur, they’re gutting ObamaCare, hur hur, ah like it!”

Hooray for the GOP!

P.S. Increasingly, I don’t feel that bad about the prospect of the Democrats picking up another Senate seat in Alabama for three years. After all: genuine ObamaCare repeal has not happened and never will no matter who is in charge. Yes, Dems love to hike taxes, but Trump would probably veto their tax hikes while he would sign the GOP tax hike — so one more vote against the GOP version of a tax hike is fine by me. And the GOP will still have its majority to confirm good judges. Win-win! I’m not getting tired of all the winning yet! How about you?

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