A Back-Door Individual Mandate

GOP leaders embrace Obamacare’s least popular provision.

The good news is House Speaker Paul Ryan and colleagues are planning to formally repeal Obamacare’s individual mandate.

The bad news is they want to replace it with a back-door version of the same thing.

Sigh.

And they wonder why liberty-minded voters are disillusioned with them.

In a recently leaked draft of their “Repeal Plus” health care reform package, dated Feb. 10, Ryan and company propose, in addition to individual mandate repeal, two new policies that together amount to an individual mandate by another name:

  1. A new “continuous coverage” penalty that jacks up your health insurance premiums by 30 percent if your coverage has lapsed for any reason for more than 60 days during the past 12 months.
  2. A new “refundable” health insurance tax credit (essentially a voucher) worth thousands of dollars a year, that you must buy government-approved health insurance to obtain, and which, if you decline it, means you forgo those thousands of dollars—in other words, a nominal carrot with the effect of a stick.

Ugh.

To be sure, the credit is not quite as problematic as the mandate. The credit, at least, is voluntary. And its existence would reduce the current tax code’s discrimination against individually purchased insurance—which would be good.

But when you combine generous refundable tax credits with a continuous coverage mandate, in the context of intrusive federal insurance mandates, well, the combination becomes profoundly coercive—basically, an individual mandate by another name.

The sad thing is, it’s unnecessary.

If we repeal all of Obamacare’s mandates and send health care regulation and subsidies back to the states, where the Constitution wisely leaves them, there’s no need for federal coercion.

Happily, it’s not that hard to fix Paul Ryan’s ‘Obamacare Lite’ plan.

But why should we have to?

Dean Clancy, a former senior official in the White House and Congress, writes on U.S. health reform, budget, and constitutional issues. Follow him at deanclancy.com or on twitter @deanclancy.

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