January 19, 2013
You gotta love a guy sitting around thinking of ways to kill a bill that extends health insurance to people who don’t have it and ensures that people who have insurance and then lose their job due to illness, can continue to be insured. That’s what George Will does for a living and he is very happy today because he thinks he has a way to kill the Affordable Care Act (ACA).
Will looked at Chief Justice Roberts’ rationale for casting the 5th and deciding vote in support of the constitutionality of the ACA. He says that it rested on the idea that the penalty for not buying insurance was relatively modest. Therefore people might opt to pay the penalty rather than buy insurance, which means it was not actually forcing people to buy insurance. Will argues that this logic will prevent Congress from ever increasing the size of the penalty.
Will then does some arithmetic and points out that for someone earning $100,000 a year the penalty for not buying insurance will be $200 a month whereas a basic insurance policy would cost $400. He then notes that if someone gets seriously ill they could always then opt to buy insurance. Since $200 is less than $400, Will says large numbers of healthy people will opt not to buy insurance. This will force up the price, since the people buying insurance are relatively unhealthy, leading more people to pay the penalty. This will cause more healthy people to opt out and pay the penalty, giving us a wonderful death spiral and making George Will very happy.
There are two problems with Will’s logic. First, the insurance will likely pay for many non-serious illnesses that even healthy people would otherwise have to cover out of pocket. In other words, it is not a question of paying $400 for nothing as opposed to paying $200 for nothing. It is a question of paying $400 for insurance or $200 for nothing. It is not clear that many people will make the choice that Will wants them to make.
The more important problem with Will’s thinking is that there are an endless number of ways to slice and dice the restrictions so that the option of not buying insurance is less attractive. For example, the cost of buying insurance can be made higher for those who had previously opted not to buy into the system. Suppose the cost of later buying into the system rose 25 percent for each year that a person opted not to buy in. (Medicare Part B works this way and the vast majority of beneficiaries do chose to buy in when they first become eligible.) This would make the arithmetic of opting out much less favorable.
The rules can also be changed to make pre-existing conditions uncovered for the first 2 years after buying insurance for those who opted to pay the penalty rather than buy into the system. Neither of these measures would in any obvious way run afoul of Justice Roberts’ argument for the constitutionality of the ACA.
Of course if the Republicans continue to maintain a majority in the House and they are determined to prevent any legislation that can address problems that arise with the ACA, then Will may get his wish and the ACA may be undermined. However that route would have nothing to do with the constitutional restrictions put in place by Roberts. So score this one as a big strikeout for George Will.
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