{"id":5322,"date":"2012-04-01T18:43:46","date_gmt":"2012-04-01T22:43:46","guid":{"rendered":"http:\/\/www.thedailygouge.com\/?p=5322"},"modified":"2012-04-01T18:44:46","modified_gmt":"2012-04-01T22:44:46","slug":"the-daily-gouge-monday-april-2nd-2012","status":"publish","type":"post","link":"https:\/\/www.thedailygouge.com\/?p=5322","title":{"rendered":"The Daily Gouge, Monday, April 2nd, 2012"},"content":{"rendered":"

It’s Monday, April 2nd, 2012….and here’s The Gouge!<\/strong><\/strong><\/p>\n

Leading off the first edition of April, the reality of the individual insurance mandate, courtesy of Chris Conover writing in The Enterprise Blog<\/em>….<\/strong><\/p>\n

Alito\u2019s correct: The individual mandate was never about saving money\u00a0<\/span><\/h1>\n

 <\/p>\n

According to Justice Ginsburg, the central justification for the individual mandate is to prevent \u201cfree riding\u201d by the uninsured, who allegedly impose a cost of more than $1,000 apiece on other health insurance market participants. But the dirty little secret of American healthcare is that the mandate wouldn\u2019t save taxpayers a dime. Why?<\/span> Because the tax subsidies for people with health insurance are bigger than the unpaid medical bills left behind by the uninsured<\/em><\/span>.<\/strong><\/span><\/p>\n

I reported earlier that, on average, uninsured Americans in 2011 generated $1,078 apiece in uncompensated care losses. With 49.9 million uninsured (A bogus figure to begin with; the actual number is less than 14 million)<\/strong><\/span>, this amounted to $53.8 billion last year. Leave aside the fact that the mandate will not apply to everyone (e.g., those qualifying for Medicaid) and that careful analysis has shown that the actual amount of uncompensated care that would be averted through a mandate is more likely to be 30% of the total amount of uncompensated care attributable to the uninsured. As the following analysis shows, even if we generously assume that the mandate will eliminate all<\/em> uncompensated care losses for the uninsured, it will not save taxpayers a single penny!<\/strong><\/span><\/p>\n

It turns out that three quarters of the uncompensated care generated by those without coverage is financed by taxpayers, or about $728 per uninsured in 2011. However, for the 169 million Americans with employer-based health plans, federal and state taxpayers finance an average of $1,890 apiece for their health insurance coverage. That is, Uncle Sam (and states) encourages people to buy employer-provided health insurance by not taxing it, a subsidy that amounts to about 36% of premiums for employer-provided family coverage. The $1,890 represents the tax savings provided to those who purchase health insurance rather than receive the same dollar amount in cash wages. In short, most privately insured Americans cost the U.S. taxpayer at least $1,100 more apiece than their uninsured counterparts! So who is doing the free riding here?<\/span> Admittedly, only three quarters of the uninsured are workers or their dependents, so not all<\/em> of the uninsured would qualify for the subsidies for employer-sponsored coverage if they obtained insurance. But even taking this into account, this simple analysis demonstrates that it would cost taxpayers about $700 more per uninsured if this \u201cfree riding\u201d ended than if it continued<\/em><\/span>.<\/span><\/strong><\/span>* Note that I am only referring to existing<\/em> tax subsidies for employer-provided health insurance under current law. If we took into account the much more lavish subsidies that will be provided to newly covered individuals under the Affordable Care Act, the figure would be much higher than $700 per previously uninsured individual.<\/p>\n

But what about the one quarter of uncompensated care costs not<\/em> paid by taxpayers?<\/span><\/strong> This amounts to $250 per uninsured and purportedly is borne by those with private health insurance. Subtracting this amount from $700 doesn\u2019t change the conclusion that the typical insured individual costs society\/taxpayers more in subsidies than the typical uninsured individual. Nevertheless, it does seem unfair that those with private insurance should bear this burden. But how big is this burden in actuality?<\/strong><\/span> As I demonstrated yesterday, cost-shifting by all the uninsured adds about 20 cents a day to the premiums of the average person with private health insurance coverage.<\/span> But when we exclude all the uninsured individuals who will not be affected by the mandate, the maximum increase in premiums that might be averted by the mandate is only 6 cents a day, or $23 a year!<\/span> Thus, the actual burden on the average privately insured family that the mandate will avert is less than $100 annually\u2014far, far below the mythical $1,000 figure repeatedly cited this week by Justice Ginsburg<\/em><\/span>.<\/span><\/strong><\/p>\n

But using the same logic, the $700 in added taxpayer spending per uninsured would, as a very rough approximation, translate into an added cost of $175 in the taxes paid per privately insured individual\u2014or about $700 per privately insured family of four (this isn\u2019t quite fair, since it does not account for taxpayers with Medicare and Medicaid, but in the grand scheme of things, the amount of taxes paid by such individuals is not that large). Thus, even the privately insured (the group supposedly \u201cburdened\u201d by the free riding of uninsured patients) would pay more<\/em> if \u201cfree riding\u201d were eliminated through an individual mandate than if it continued!<\/strong><\/span><\/p>\n

So if the mandate was not about saving money, what was it about?<\/strong><\/span> It was about forcing predominantly young people, whose annual healthcare costs are about $850 a year, to purchase coverage costing many thousands of dollars. The mandate was about forcing these individuals to pay for the care of other people (older and sicker) rather than their own care<\/em><\/span>, a point that Justice Alito seems to have grasped quite astutely.<\/span><\/strong><\/span> But if that\u2019s true, then the individual mandate had nothing to do with a legitimate exercise of the Commerce Clause, but instead was an end-around Congress\u2019s taxing powers. The mandate is a hidden tax cloaked in the guise of making people responsible for their own health bills<\/em><\/span>.<\/span><\/strong><\/span><\/p>\n

This is the knotty question now facing the Supreme Court. The mandate was a way of avoiding Congress having to impose additional taxes of $360 billion on Americans. The designers of Obamacare were well aware that if the true costs of the bill were accurately identified and taxes transparently increased to cover them, the public never would have supported health reform.<\/span><\/strong><\/span> (Was there ever a time they did?)<\/span><\/strong> This is why they resorted to all manner of smoke and mirrors to hide the true costs and to reliance on hidden taxes such as the individual mandate to further hide from view the burden this plan would impose on Americans. To their credit, the American public appears not to have been fooled. Since the law was passed nearly two year ago, RealClearPolitics.com has tracked more than 100 different polls on the issue. With the exception of one lone CBS\/New York Times poll conducted in January 2011, every single poll has shown that those favoring repeal of the health law outnumber those who oppose repeal by margins that in some polls have reached as high as 31 percent.<\/strong><\/span> In all but 8 polls, an absolute majority of those surveyed favored repeal. In light of the reality that the individual mandate would actually increase rather than reduce the burden posed by today\u2019s uninsured, it will be interesting to see what the Court ultimately decides about this contentious mandate.<\/span><\/p>\n

But frankly, polling data on ObamaScare should have no place in the SCOTUS decision; neither should the facts belying the lies promulgated regarding its mythical economic benefits.\u00a0 A requirement for individuals to purchase health insurance from private companies is unconstitutional, end of argument.<\/strong><\/p>\n

The President and the Dimocratic leadership could, could<\/em><\/span>, mind you, have constructed a health care reform bill which fell within the limits of the powers granted Congress and the President by the Constitution; but it would have required (a) massive new tax increases to pay for it, and (b) a complete and obvious takeover of the entire healthcare system by the federal government.<\/strong><\/p>\n

But they lacked the political courage, intestinal fortitude, veracity and, most importantly, public support for the honest approach, so they went with Plan “A”, hoping a combination of outright lies, oral obfuscation and overwhelming MSM support would carry the day.<\/strong><\/p>\n

And frankly, they’re probably more surprised its come to this than anyone.<\/strong><\/p>\n

In a related item, Jonah Goldberg’s thoughts on the subject courtesy of National Review Online<\/em>:<\/strong><\/p>\n

Conservative interpretations<\/span><\/h1>\n

It\u2019s not the Supreme Court\u2019s job to design our health-care system<\/span><\/h3>\n

 <\/p>\n

Supreme Court Justice Ruth Bader Ginsburg likes the Indian Health Care Improvement Act and other ingredients of the Patient Protection and Affordable Care Act, aka \u201cObamacare.\u201d Why, she asked toward the end of three days of hearings, shouldn\u2019t the court keep the good stuff in Obamacare and just dump the unconstitutional bits?<\/p>\n

The court, she explained, is presented with \u201ca choice between a wrecking operation . . .\u00a0 or a salvage job. And the more conservative approach would be salvage rather than throwing out everything.\u201d<\/p>\n

\u201cConservative\u201d is a funny word. It can mean lots of different things.<\/span> It reminds me of that line from G. K. Chesterton about the word \u201cgood.\u201d \u201cThe word \u2018good\u2019 has many meanings,\u201d he observed.<\/span> \u201cFor example, if a man were to shoot his grandmother at a range of 500 yards, I should call him a good shot, but not necessarily a good man<\/span><\/em>.\u201d<\/strong><\/span><\/p>\n

Conservative can mean cautious in temperament \u2014 a man who wears belts and suspenders. Similarly, it sometimes suggests someone who\u2019s averse to change. It can also refer to the political ideology or philosophy founded by Edmund Burke and popularized and Americanized by people like Barry Goldwater, Ronald Reagan, William F. Buckley, and George Will.<\/strong><\/span> Things can get complicated because these different meanings can overlap. Many strident liberals can have conservative temperaments, and many philosophical conservatives can have private lives that make a brothel during Fleet Week seem like a retirement-home chess club.<\/strong><\/span> Conservatives in America love the free market, which is the greatest source of change in human history. Liberals, alleged lovers of change and \u201cprogress,\u201d often champion an agenda dedicated to preserving the past.<\/span> Just consider how much of the Democratic party\u2019s rhetoric is dedicated to preserving a policy regime implemented by Franklin Roosevelt nearly 80 years ago<\/em><\/span>.<\/strong><\/span><\/p>\n

You can also be conservative with respect to a given institution while being un-conservative in every other respect. The most ardent Communists in the Chinese or Cuban politburos are often described as \u201cconservatives.\u201d The same holds true for every left-wing institution in America: Someone has to be the \u201cconservative\u201d at PETA or Planned Parenthood \u2014 i.e., the person who is risk-averse when it comes to scarce resources or the group\u2019s reputation.<\/p>\n

Anyway, sometimes people like to play games with the indeterminacy of the word \u201cconservative\u201d in order to sell a liberal agenda (and in fairness, conservatives often do the same thing with \u201cprogressive\u201d).<\/p>\n

Which brings us back to Justice Ginsburg. She would have people believe that if the Court rules the individual mandate unconstitutional, the conservative thing to do would be to preserve the rest of Obamacare.<\/span> She suggests that \u201cwrecking\u201d the whole thing would be an act of judicial activism, while \u201csalvaging\u201d it would be an act of conservation.<\/strong><\/span><\/p>\n

In other words, she\u2019s playing games with the word<\/em><\/span>.<\/strong><\/span> The Supreme Court is supposed to be a conservative institution in that it serves as a backstop for the excesses of the other branches. Political conservatives, by extension, argue that the court should defer to Congress, the most democratic branch, when constitutional issues are not at stake.<\/span> Hence, liberals contend, a \u201cconservative\u201d court should take a scalpel to Obamacare, not an axe<\/em><\/span>.<\/strong><\/span><\/p>\n

It sounds reasonable, but it isn\u2019t<\/em><\/span>.<\/strong><\/span> As Justices Scalia, Kennedy, and Roberts noted, if the court simply removes the requirement that everyone buy health insurance, they are left with the task of essentially rewriting the act. That prospect caused Justice Scalia to exclaim, \u201cWhat happened to the Eighth Amendment [barring cruel and unusual punishment]? You really want us to go through these 2,700 pages? . . . Is this not totally unrealistic? That we are going to go through this enormous bill item by item and decide each one?\u201d<\/p>\n

The conservative thing to do \u2014 and I don\u2019t mean politically conservative \u2014 is to send the whole thing back to Congress and have it done right. Leaving aside the fact that Obamacare largely falls apart if you remove the mandate, it\u2019s not the Supreme Court\u2019s job to design our health-care system from the scraps Congress dumps in its lap.<\/span> What Ginsburg proposes is akin to a student handing in a sloppy, error-filled term paper, and the professor rewriting it so as to give the student an A<\/em><\/span>.<\/strong><\/span><\/p>\n

Some liberals note that one option Congress could pursue would be to pass a far more left-wing piece of legislation that mandates a single-payer system, i.e., socialized medicine. That would \u2014 or at least could \u2014 be constitutional.<\/span> And that\u2019s true: Congress could<\/span> do that, and I\u2019m sure Justice Ginsburg would be pleased if it did<\/span><\/em>.<\/strong><\/span> And if that happened, the right and conservative thing for the court to do would be to let it happen.<\/strong><\/span><\/p>\n

But Congressional Dimocrats didn’t….and now they can’t<\/em><\/span>.\u00a0 Seriously, does anyone doubt were such a plan possible Pelosi and Reid would have passed it in a New York minute when Dimocrats enjoyed unassailable majorities in both the House and Senate?\u00a0 Of course they would have; but they couldn’t….because they didn’t have the support then, even within their own party.\u00a0 And now, the party’s over.<\/strong><\/p>\n

Speaking of the Overreach of the Century is giving Progressives across the country pause to ponder, as this next item by Molly Ball in The Atlantic<\/em> details:<\/strong><\/p>\n

If Obamacare Is Overturned, Can Democrats Recover?<\/span><\/h1>\n

A Supreme Court rejection of the president’s signature domestic accomplishment would deal a severe, long-lasting blow to the progressive ideal.<\/em><\/span><\/h3>\n

 <\/p>\n

\"\"<\/a><\/p>\n

There’s a reason liberals are freaking out about the Supreme Court this week.<\/p>\n

If part or all of the health-care reform law is thrown out, a central goal of the progressive project will have been dealt a possibly fatal setback. The dream of universal health care — pursued for decades, frustrated again and again — that seemed finally to have come to fruition in 2009 will have been derailed before it could even be fully implemented. For liberals and their allies, it will be a crushing blow from which there is no easily foreseeable recovery.<\/p>\n

“It would be a particularly bitter pill to swallow to get [health-care reform] all the way through the legislative process and, because of the partisan leanings of five people who happen to be justices of the Supreme Court, not get universal health care,” said Neera Tanden, president of the Center for American Progress and a former Obama administration adviser who helped see the bill through Congress. (Note in Tanden’s warped world, a SCOTUS finding that\u00a0 ObamaScare is unconstitutional will have had nothing to do with the bill’s contents and everything to do with the “partisan leanings of five people who happen to be justices of the Supreme Court”.<\/span><\/strong><\/span><\/p>\n

Tanden does not believe the whole bill will be thrown out, but based on the questioning and debate in this week’s oral arguments, she sees parts of the law, such as the insurance mandate, in unexpected peril from the court’s conservative wing.<\/p>\n

\"\"<\/a><\/p>\n

If the entire law gets thrown out, she said, “I think my head would explode.”<\/strong><\/span> (To borrow a phrase from Dickens, Tanden should do it quickly and decrease the surplus population!)<\/strong><\/span> But even if only the mandate is rejected, the fundamental achievement of the legislation would change, she said: “Without the mandate, I don’t believe it is a universal health-care bill.”<\/p>\n

For Republicans, a court decision invalidating part or all of Obamacare would be a powerful talking point, cited as a stinging rejection of the president’s agenda and proof that Obama — a former constitutional law professor — doesn’t understand or respect the Constitution, a cherished belief of the Tea Party<\/span><\/em>.<\/strong><\/span> (Res ipsa loquitur, baby!)<\/span><\/strong> In policy terms, too, the president’s central domestic accomplishment would suddenly cease to exist or else limp forward in badly maimed form.<\/p>\n

“If the whole thing goes down, I think it’s pretty tough for the president,” said Howard Dean, the physician and former Democratic National Committee chairman. “I think he’s probably going to win reelection anyway, but does he want to start all over again?” On the heels of a court rejection, he said, “I don’t think [health-care reform] could come back. Not the whole thing.” (Dean, however, believes the mandate isn’t necessary and could be removed from the law without consequence.)<\/span> (Yeah….Howard Dean….<\/span><\/strong><\/span><\/p>\n