The Health Care Reform Law: What’s the Big Deal?

I’m not an attorney, so I cannot help the federal judges struggling to figure out whether the individual insurance mandate in President Obama’s healthcare law violates the interstate commerce clause of the U.S. Constitution. But as a taxpayer (and formerly a professor of public policy), it’s hard for me to understand what all the fuss is about.

The Patient Protection and Affordable Care Act created a monetary incentive for all taxpayers to obtain health insurance. Beginning in 2014, people without insurance will pay more to the IRS than people with insurance. Like the tax code as a whole, the rules for calculating the size of the penalty are incredibly complex. But once the penalty is fully activated in 2016, a single individual with no dependents will pay an extra $695, or 2.5% of his or her applicable income, whichever is higher. An uninsured family of four with annual income of less than $110,000 will typically pay $2,085 more than it would if insured.

This tax penalty is known as “the individual mandate.” It’s an important part of the new law because starting in 2014, insurers are prohibited from denying coverage or charging higher rates based on preexisting conditions. Without the mandate, people might wait to buy insurance until they needed medical care. To keep insurance affordable for patients and profitable for insurers, healthy people need to pay for coverage before they get sick.

Various courts have viewed the tax penalty in different ways. But some have concluded that it is a huge encroachment on individual rights. As a ruling from the U.S. 11th Circuit Court of Appeals put it, “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy.”

This is the part of the debate that I find so curious. There is nothing novel or coercive about linking taxes to the purchase of specific types of goods or services. As any taxpayer probably knows, there are many tax provisions that raise or lower your tax bill depending on what you have bought and what you have elected not to buy.

“Obamacare” is unusual, perhaps even unique, in that it uses a penalty to encourage a purchase. Usually we use penalties to discourage a purchase and subsidies to encourage a purchase.

Obamacare flips this around, which is probably why people react to it so viscerally. We grumble when we pay excise taxes. We sigh when we see others getting tax breaks that don’t apply to us. But we roar when a penalty impels us to buy something we don’t want.

To my sober economist’s mind, however, there is little difference between a penalty and a subsidy. Either way, the government is rewarding or penalizing you depending on what you buy and what you don’t buy. And the resulting difference in taxes can be huge.

The most important of these provisions allows homeowners to deduct from their taxable income the money they spend on mortgage interest. For a typical homeowner, this can reduce taxes by hundreds or thousands of dollars. Those of us who choose to rent instead of buying with a mortgage from a bank are in effect penalized, and we pay this penalty every year of our lives until we either die or buy a house on credit.

Having spent half a day last April doing my family’s taxes, I’m all too aware of the other individual mandates built into our federal laws. Here’s a partial list of the specific purchases that my tax preparation software inquired about when it “interviewed” me while preparing my federal return: moving expenses, charitable contributions, student loan interest, tuition, safe-deposit fees, legal expenses, investment expenses, hobby expenses, hybrid cars, child care and, notably, medical expenses and health insurance premiums. Without this information about my retail activity, the IRS apparently couldn’t calculate how much money my family owed Uncle Sam for 2010.

In California, where we have both a state income tax and a sales tax, the list goes on. Californians are taxed differently depending on whether they buy low-emission vehicles, solar panels, California-grown rice straw, habitat restoration supplies for salmon and steelhead trout, and components to build the Joint Strike Fighter aircraft.

Every tax creates winners and losers. To evaluate whether a specific tax is good public policy, all we can do is judge whether it distributes the tax burden fairly and whether it creates positive economic incentives.

It makes sense for governments to use tax laws and other types of economic incentives to encourage behaviors that are good for society or that increase overall economic welfare, and to discourage behaviors that cause general economic harm.

When pundits oppose a particular economic incentive, they often refer to it derisively as “social engineering.” The label is apt because the legislator’s goal is indeed to engineer society by providing tangible monetary incentives that reward desirable behavior while penalizing behavior that harms the economy or other social goals.

By creating the insurance mandate, Congress intended to discourage a behavior it deemed harmful. Deadbeat patients who consume subsidized healthcare without paying into the system impose unfair costs on the rest of society.

At the same time, Congress intended to encourage behavior it deemed socially and economically desirable. According to a landmark study published in July, people chosen at random to receive Medicaid insurance in Oregon were already healthier just one year later. They also had fewer unpaid medical bills sent to collection agencies. Over time, people with health insurance will probably miss fewer days of work, spend less time on welfare and avoid defaulting on their debts through personal bankruptcy.

The bottom line: There really is no such thing as an individual health insurance mandate. No one gets carted off to jail if they fail to buy insurance. Instead, they pay a tax penalty just like the tax penalties we face for other commercial decisions we make each day. Under Obamacare, Americans are free to choose whether or not to buy insurance, just as they are free to choose whether to buy a house, or solar panels, or hybrid cars, or child care or cigarettes. Let’s stop suggesting otherwise, and start referring to the individual health insurance incentive.

William D. Leach has taught public policy and economics at Cal State Sacramento and UC Davis. This piece first appeared in the Los Angeles Times.

62 replies »

  1. You know what Barbara, you and everyone advocating for business as usual can stuff it! Resistance is futile and my colleagues by in large have been assimilated by the Borg of business aliens.

    It is all about money, volume, and quantity assessments, there is no individuality and personable care anymore. Health care is fucked, and I am wasting my time discussing it here with political lackies and self serving agenda seekers.

    Insurance mandates by states is not an equal analogy to what PPACA is pursing. Another lie trying to be rammed down our throats.

    Good luck in your health care pursuits, people!

  2. Really barbara? How many 5 year olds in Virginia have auto insurance? Virginias who drive on public roads are required to have auto insurance. You can buy a car and drive all over your farm and not carry insurance. Auto insurance is nothing like health insurance.

  3. Virginians are required to buy car insurance or suffer a penalty. Seems to me this is exactly the same as that. So I’m sorry but you’re first point is invalid, making the whole rest of the argument specious.

    Overall, you are not enriching the debate with your comments on this blog. You are only inflammatory.

  4. Again, my comment was not directed specifically to you, and I offer my sincere respect for your efforts to support your family members.

    That said, the comment isn’t directed to people like you who take responsibility in such matters. Unfortunately, there are a sizable number who do NOT want responsibility nor accountability.

    Hence the financial crisis that is Medicare.

  5. to “BobbyG” – leaving aside the other mud-wrestling in this thread, you have my sympathy for the end-of-life challenges you have faced in caring for your family.

  6. “Hey, what is wrong with arguing we should not help people live longer who have come to the end of their lives”

    Nothing, except where it extends to impugning the motives of other.

    Doctor, I am POA on my mother (since 2004). She’s approaching 90 and in long-term care, for going on 4 years now. Private pay to the tune of about $6,500 a month, I might add. I specifically forbade my elder care attorney to even bring up the topic of estate “asset protection.”

    She has a DNR, and strict “no-transfer / comfort care only” orders in her chart. I was also my late father’s legal guardian (he was in long-term care with dementia). He too had a DNR, and strict “no-transfer / comfort care only” orders in his chart.

    I also had POA on my late daughter. I’m just a wee tad familiar with end-of-life issues with respect to geriatric issues and terminal disease issues.

    Again, none of this is exactly news. See, e.g., Elhauge’s “Allocating Health Care Morally,” 1994.

  7. Lety’s?


    no idea what your trying to say, poor grammer makes it hard to communicate, an extra second spell checking can save a minute repeating yourself.

  8. So, you surmise that I advocate for limits and accountability makes me inappropriate to be a physician?

    Honestly, ask your physician colleagues who practice clinical care at least 80% of their work week this question:

    Would you matriculate into medical school back when you did if you knew where health care would be as of October 2012?

    If they would look you in the eye and be brutally candid, I would make a gentleman’s wager with you no better than 50% would say yes. But, to insure an honest reply, those who have kids, how many of them encourage their children to pursue a career as a doctor, and say yes to the question above at the same time?

    Remember sir, if you were a reader here for the last year or more, I was originally known as ExhaustedMD. But, I came to realize that if I caved in to compromise and indifference, I would be no better than those who are out to screw medicine. So, I am now DeterminedMD.

    Interpret my comments as angry and confused. Some may actually disagree, they might see them as driven and committed. Or, determined?

  9. Some societies put addicts to death. Yeah, that is a harsh assumption at moment one for all addicts, but, what do you do with the terminal addicts of society, who never want to change, who do not accept recovery, have no concern with what their consequences bear on those around them?

    Oh, I was talking about those addicted to power and money. Those with chemical addiction without change, just ship them to the nearest deserted island? Maybe there are poppies on them.

    Poppies, lots and lots of poppies. Is this what the Wall Street greedos go to sleep counting in their efforts to dream the night away?

  10. So, by your retort that not trusting polls is unreasonable, what, we are to assume every poll question is unbiased and objective? Yeah, as long as it supports your argument/position.

    I said in the comment, “do polls interview all the residents in the state” to infer that talking to several hundred people in a state of what, 2 million ?, that is not going to guarantee an accurate portrayal of the population. I did not even try to claim the percentage would be the opposite, but you seem to infer that 20% of the population not satisfied is inconsequential. Yeah, unless you are in that 20% group! And if it was closer to a third, would you not quote the poll to support your position?

    Your political affiliation, sir?

  11. Hey, what is wrong with arguing we should not help people live longer who have come to the end of their lives, when it is on society’s dime and not the patient’s or families pushing for full court presses? Per this crowd who argue vehemently to keep the status quo with social security, Medicare, and what PPACA has to offer as in place, there are only 3 real conclusions to their arguments to do so:

    naive and terminal optimism that the realities of life will override the logisticaly boundaries of nature and finite financial options, or, personal agendas that only benefit the supporters that will not be negatively impacted before their deaths, or, sheer political/party gain that is not at all interested in public welfare at the end of the day.

    Really, if my conclusions aren’t true, we all await your alternative explanation that has merit and validity to why the status quo has no consequences for this country by the middle of 2020’s.

    Still waiting in an earlier comment in this thread one commenter’s political affiliation to prove me wrong their repeated rebuttals are not politically driven.

    By the way, Nate, be the mensch and stick to the facts as best able, so if gives strength to rebuttals that are factual yet dissenting. Yeah, I have been guilty in the past for violating this request, but trying not be dragged into the proverbial gutter of the “hear the damn lie enough already and accept it as truth” crowd who has no tolerance for dissention!

  12. “2.I know all about the Liverpool Care Pathways, and your suggestion that they constitute “death panels” or that they have anything to do with Romneycare is absurd.”

    First I never said they had anything to do with Romney care, I responded to your erronous claim that republicans respond to comparitive effectiveness as death panels. This is a lie.

    Second how does a set of guidelines that suggest withholding food and water from patients not a death panel?

    “I have no problem with the government taxing my income in order to pay for our defense forces, for our border patrols, for the NIH, for Medicare, for Social Security, or for a host of other functions essential to our functioning as a modern society.”

    Then why don’t you and the people like you contribute more instead of trying to take everyone else’s money to pay for your failed dogma? If you believe in Medicare and SS then you pay for it, let those of us smart enough to see they are not sustainable opt out.

    ” It is hard for individual states to control medical costs because Medicare is controlled by the federal government, not the states,”

    Medicare which is 25% of the population and only 30%ish of total spending. Some states it represents less then 20%, how exactly does medicare drive inflation for the entire state? And how does an insurance program that reimburses care drive the cost of that care? Logic would state supply and cost would be much bigger drivers. A high tax state would have higher income which would mean providers have to charge higher prices. Small state with expensive real estate. CON programs that restricted supply or created monopolies. Maybe on page 2 around item 100 would be Medicare.

    ” insurers work across state lines,”

    What does this have to do with anything? Every state licensed insurance company is licensed by the state and must comply with that states regulations, how does it matter to anything if they also operate in other states?

    “state regulations are subject to the “race to the bottom” phenomenon, etc.”

    This is an even dumber statement then the one above. Race to the bottom, that is why cost continues to increase? Its a race to the top to see who can regulate their insurance market out of existance first. Who would ever claim that NY, MA, HI regulate to the bottom?

    “That is why the Obama reforms contain hundreds of cost-control programs that are not possible at the state level.”


  13. what part of middle school math don’t you understand?

    Before you mischaracterize the facts I am not saying we shouldn’t help people live longer. I’m just saying lets not be idiots about it and claim we are saving money while in fact greatly increasing future liabilities. I know you Keynesians and liberals don’t understand consequence but its real, unlike most of your science.

    It’s been said the first person to live to the age of 150 has been born. That means it is likely under current law this individual will work for 30 to 35 years and collect Social Security and Medicare for 80 years. As I hope even you realize that will not work. So if we are going to engage in efforts to extend life lets also be honest and figure out how we pay for it, claiming we are saving money is irresponsible.

  14. It’d be cheaper to simply kill everyone who gets arrested, as well.

    A number of societies have tried just that. All the Due Process stuff is an expensive pain.

  15. It appears to be “nate’s” position that preventative medicine can never reduce healthcare costs because a person who is prevented from having diabetes or a cholesterol-induced infarction at age 40, will eventually die of something else at age 70, when inflation has inevitably increased the cost of health. Indeed, according to Nate, it is more cost-effective not to keep people from having medical problems at a young age, since their disease is cheaper now than it will be later on.

    That makes no sense to me.

  16. Wow, Robert Wood center for propoganda, well if they say so it must be true. Lets throw out your junk science and look at real numbers, something I can do becuase I actually administer the health plans so I know for a fact what does and does not save money. Preventative care and wellness does not save a penny in total cost, it might delay or push it off on someone else but it never saves. If they don’t die of a heart attack at 50 then they will die of cancer or something worse at 80. Are you really going to argue there is no cost incurred in those 30 years? Are you really going to argue with medical inflation that death of just about anything 30 years from now is going to be a heck of a lot more expensive then death now?

    You failed to even logically consider the argument.

    I’ll debunk the rest when I get done actually managing a health plan, not studing my own work from 4 degrees away

  17. Putting aside the vulgar personal attacks in Nate’s post:
    1. He is completely wrong that preventative programs (like smoking cessation, obesity control, childhood immunizations, low-dose aspirin, etc.) See,, e.g.,:
    2.I know all about the Liverpool Care Pathways, and your suggestion that they constitute “death panels” or that they have anything to do with Romneycare is absurd.
    3. Your Ayn Rand-ian rant about government as a “confiscator” betrays your extremist sentiments. I have no problem with the government taxing my income in order to pay for our defense forces, for our border patrols, for the NIH, for Medicare, for Social Security, or for a host of other functions essential to our functioning as a modern society.
    4. You are correct that it would be unfortunate if funding for worthwhile social programs such as Romneycare support for working-class families were cut or eliminated. That is an argument for not cutting or eliminating such funding, and not for your view that good programs should never be initiated because they might be cut at some later time.
    5. Mass spends more on healthcare per capita than Utah because it has older, sicker, poorer residents, as well as a network of extremely expensive, albeit high-quality hospitals. It spent more than Utah before Romneycare, and it spends more after Romney care. It is hard for individual states to control medical costs because Medicare is controlled by the federal government, not the states, Medicaid is largely controlled by the federal government, insurers work across state lines, state regulations are subject to the “race to the bottom” phenomenon, etc. That is why the Obama reforms contain hundreds of cost-control programs that are not possible at the state level.

  18. ““Nate” says that Romneycare is a success”

    No Nate never said that, Romney care is a failure on many levels, one of which is out of control cost.

    “So what?”

    Well I would think if I was one of those individuals that was dependent on these State programs and it was taken away that would be a problem. Giving people benefits then taking them away depending on the election year and whims of polls is not a very humane way to treat the lower classes. Its also very inefficient to spend billions improving the health of a group of people to then yank it away and start over 5 years later. Why spend the money in the first place.

    “State governments are badly designed as revenue-generating mechanisms.”

    Wonder if this has anything to do with the fact government is not suppose to be a revenue generator and in most cases there is no such thing as government generated revenue only government confiscated revenue?

    “And state-level controls over the rate of medical inflation are extremely difficult to implement,”

    That’s pretty ignorant. A small self funded plan with 50 employees can control medical inflation but a state with millions can not? Might want to step into the actual world one in awhile. It’s very easy to control Medical inflation you only have a couple variables, # enrollees, utilization per enrollee, and amount paid for services.

    “medical inflation is largely a national phenomenon.”

    More ignorance, please do explain then why Mass spends 2-3 times more then Utah. Why does Cleveland cost 30% more then Columbus? Medical inflation is distinct down to the county or city. Have you never heard of area factors in rating? Why would they exist if healthcare was at a national level?

    “But it wasn’t designed to.”

    No one said it was designed to, that doesn’t make the point it is unsustainable any less valid. You want to trot out opinion polls that prove giving away money is popular, no really, you needed a poll to tell you that? If I gave out $10,000 a day even Bobby G would like me, once I run out of money where would I be though? Mass is borrowing heavily and living off federal tax payors to provide a program that would not exist without the charity. When that charity ends, any year now, the program will crash, by most measures that would be called a failure.

    “the encouragement of preventative medicine”

    Wow your a talking sound bite, FYI preventative medicine has never been shown to save money, it increases quality of life but have never saved a penny and never will.

    Pull your head from your backside and learn what the Liverpool care pathways are before you make any more ignorant comments about death panels. Just because you’re not smart enough to understand an argument doesn’t make it less valid. Its what’s done with comparative effectiveness and how its used that can create a death panel, not the existence of the studies. No one on the right has opposed comparative effectiveness, they have opposed how the liberals wanted to use it. Obviously a distinction over your head.

  19. let’s see now:
    1.”DeterminedMD” says that we can’t rely on polls to judge the popularity of Romneycare because the polls don’t “interview all the residents of the state.” Isn’t much I can say in response to that.
    2. “Nate” says that Romneycare is a success only because it depended on some federal support for some of its funding. But that is true of hundreds of state programs across the country. State governments are badly designed as revenue-generating mechanisms. That is why so many programs depend on federal grants for support. So what?
    3. Somewhat more to the point, he points out that the Romneycare didn’t reduce the rate of cost increases. But it wasn’t designed to. And state-level controls over the rate of medical inflation are extremely difficult to implement, since medical inflation is largely a national phenomenon. That is why the Obama reforms (unlike the Romney plan) contain hundreds of pages of scalable programs for reducing medical costs – like the establishment of “medical homes,” the encouragement of preventative medicine, and the “bundling” of Medicare payments. Oh, and also the radical idea of comprehensively studying which treatments work and which do not. That is an idea which we borrowed from the Republicans, but which, they now hysterically denounce as “death panels.”

  20. “Yet somehow we have not tumbled down the slippery slope into Stallinist tyranny. I wonder why?”

    Its a long slope and while we have fallen far we have not yet hit bottom….not sure thats something to celebrate. I think most democracy loving americans would prefer to stop the slide and start climbing up before we turn into a full fledged communist/marxist/socialist what ever the ideology de jaur of the clueless is these days.

  21. “the fact that so many American families no longer worry that they are one medical crisis away from financial ruin may not seem important to you, but it does to me.”

    That’s because the entire state is one year of reduced federal support from financial ruin.

    Federal Medicaid Assistance Percentage (FMAP)
    ARRA and subsequent federal jobs legislation increased the Federal Medicaid Assistance Percentage (FMAP) received for Medicaid payments in Massachusetts to 61.59%, from a pre-ARRA level of 50%. These funds have allowed the state to maintain critical health-care services to our citizens. FMAP dollars allowed many budget areas in the Commonwealth to experience a smaller reduction than would have been possible without FMAP funds, and also allowed for a modest increase in spending in some areas. For example, although the MassHealth program did not increase reimbursement rates for the majority of providers, it was able to sustain eligibility for an increased caseload of 1.2 million members in fiscal year 2009 and fiscal year 2010.

    Just becuase someone steps in to pay your bills doesn’t mean your any safer from financial ruin, its just means your wholely reliant on one person

  22. Doc, you and I share WAY more concerns than your reflexive unfocused anger allows to surface.

    “one doctor who smells a rat and seems to be one of the few who is willing to speak out”


    Keep up the good fight.

  23. To tie in both the above NYP comment and the last retort from Mr G at 7:12PM regarding reading his blog comment of Nov 2009, statistics can be twisted to support a cause if one is slick enough to throw out as many different perpectives to confuse and deflect from the original concern. I mean, really, that mortgage deduction tangent in the middle of this thread, what was that about? Do polls interview all the residents of the state? If they could and people understood the poll question, if presented as unbiased and objectively as possible, you think that number would still be 21%? And if it was then 35%, if a third of the public was unhappy, they should just be simply dismissed? And a 98% insurance rate infers full satisfaction? If you are now forced to pay 10-15% more for the same coverage people in New York or New Hampshire are paying, people in Massachusetts should be thanking Mitt Romney? And I am not a political expert, so are your supposed examples of mandates previously in place accurate comparisons to what the PPACA mandate is to enforce? Your political affiliation, did not read that reply? And per the New York Times article, about 60% of physicians are not willing to participate in this new offering by the Mass. government, so that will not impact on the public if such MDs choose to dig in and fight it voraciously?

    And per Mr G’s reply, I tried to read that lengthy missive dated November 2009, before the legislation was passed if I am correct, so if the final bill fully mirrors your comments, which I sincerely doubt, my instinct that insurers, pharma, AMA, AARP, etc of supporters, do not have a stake in this legislation that will benefit THEM first, and the public second if not last is completely off base? And your writings are the gospel to make me slow down and believe otherwise?

    Hey, my writings are not gospel, nor political expertise, nor spokesman for the profession of medicine, but of one doctor who smells a rat and seems to be one of the few who is willing to speak out, even if under an alias.

    If I am right, PPACA survives the Supreme Court review, and then ends up causing harm to many Americans who put their faith in their representatives back in 2009-2010, shrugging your shoulders and saying, “well, I guess that DeterminedMD guy must have seen something we underestimated” will undo all that damage?

    Yeah, I’ll go on to surmise most saying that will be on those island sanctuaries savoring the profits on the blood they helped spill to gain those profits.

    What I said back in the 1990s: if you want to make a profit, invest in oil, not blood!

  24. romneycare is popular because it is financiallybeing bailed out by the federal government repeatedly… including a gimmick in the HC law that redefines certain Mass hospitals to get them an extra $400 million.

    if it needed to be self-sustaining— it would never have been implemented— just like the CLASS act…

  25. to “determinedMD”:
    1. Polling data show that only 21% of Mass residents oppose the Romney health reforms. http://www.hsph.harvard.edu/news/press-releases/files/blendon_topline_6.6.11.pdf
    2. And now Mass has a 98% insurance rate. the fact that so many American families no longer worry that they are one medical crisis away from financial ruin may not seem important to you, but it does to me.
    3. we have had “mandates” in federal law ever since the first congress required citizens to purchase firearms in the 1792 Militia Act, and the Second Congress required merchant seamen to purchase health insurance in the 1798 “Act for Relief of Sick & Disabled Seamen”. Yet somehow we have not tumbled down the slippery slope into Stallinist tyranny. I wonder why?

  26. “You really think insurers, big pharma, hell, even the AMA would willingly sacrifice profit for the sake of the public? If you really, honestly believe so and would say yes, I would rather be angry than delusional.”

    SLOW DOWN, and take some fucking time to actually READ what I’ve researched and written on the topic.


    Good Lord.

  27. No, not everything and everyone, just those who support a worthless cause that does not have an agenda to improve our society’s health.

    A partisan legislation that is supported by organizations that such law superficially would take away sizeable financial support from said orgs?

    You really think insurers, big pharma, hell, even the AMA would willingly sacrifice profit for the sake of the public? If you really, honestly believe so and would say yes, I would rather be angry than delusional.

    The Occupy Wall Street crowd always seem to be smiling and having a good time in their protests. But, fighting for a cause is not fun, if the enemy you are refuting is soulless and unconcerned for the well being of the many. Profit seeking and looking out for the common good are incongurent end points.

    Hey, I’m just following good ol’ Nancy P’s advice: now that it is passed, we’re finding out what is in it. One big ol’ stinky diaper, eh?

    And if my interpretation is right about Global payments = capitation, just throw around that latter word with physicians at your next social event.

    Doubt many people will be hanging out with you after that expletive!

  28. See if you “like” this and share it with your physician pals:


    Yesterday’s NYTimes article. “Global Payments”. Is this the new word to replace “capitation” that was so effective and well received back in the 1990s? Gee, we saw how well the word stimulus survived and supported Obama’s newest offer to save the economy.

    Yes, Massachusetts’ experiment is the poster child of what PPACA will metastasize into. Screwing the very people needed to keep the health care system afloat. Are you supporters of PPACA starting to get a little afraid that the Supreme Court may not rule in your favor?

    Hey, I have an idea, reroute the Occupy Wall Street crowd to start protesting in front of the Supreme Court Building. Mobs do influence opinion, eh?

  29. Go to Paul Levy’s most recent post prior to this one and just highlight the sentence “hear the lie enough and it becomes the truth” and just run an endless loop after your comments so no one can reply.

    I guess you can’t shout down your detractors at a web site, so the best alternative is keep repeating your refuting my concern and hope everyone will buy it. Care for a little transparency, NYP? Your political affiliation?

    Mine has and will be until I die as fierce independent. My allegiance is to people, not a party or political gain.

    You live and pratice in Massachusetts to say this per first hand experience? If so, that would give you some substance to adequately refute the Massachusetts opinion. Not hearing people in that state standing up to echo your opinion as a joyous choir.

    And why would people of political expertise keep saying this is the first example of federal mandates? Your retort is basically calling them liars and misrepresenting the truth? Good luck with that claim!

  30. to “determinedMD”:
    1. you don’t really address the obvious flaws in your “slippery slope” argument. The law books are filled with laws that have slippery slopes. Under its commerce clause powers the Congress could pass a law requiring every car sold in America to have a soda dispenser. What keeps it from passing absurd or oppressive laws is a little thing called democracy.
    2. Mitt Romney’s Massachusetts health law is extremely popular. It should say something to you that there is no major politician in the Commonwealth who advocates it repeal. Perhaps that’s because Massachusetts now has, on a percentage basis, fewer families without adequate health insurance than any other state in the nation.

  31. here is the issue — if it really was a tax (and I will not discuss the merits, or lack thereof of the government being able to make a distinction)…

    the cbo would have had to score the bill where ALL OF THE PREMIUMS WERE COUNTED IN THE COSTS OF THE BILL.

    This was what happened to Clinton reform effort in 1992.

    If that happened, the chance of passing with a price tag in the multiple trillions would never have passed. It is as simple as this.

    Not sure if Mr. Leach understands this fact, but would be interested to know.

    That fact, along with the protestations of the President and members of Congress to claims it was a tax— make the tax claim unlikely to prevail (as it has failed everywhere but in the 4th circuit).

    Mr. Leach is an attorney and of course knows that words matter in the law– and often differ with ‘plain meaning’ as we would use it conversationally.

    My only conclusion is that he either does not know the cbo scoring requirements, or is merely making an obscuring legal argument.

  32. “The individual mandate is a means of keeping free riders from taking advantage of the healthcare system.”

    Really? You sure about that? First off why would someone buy a $5000+ policy instead of paying a $700 tax? The policies are still guaranteed issue so you can pay your $700 tax, pocket the $4300 savings then when you get sick buy insurance. You haven’t “kept” any freeriders out of the system you just codified how to cheat, we all know how well that worked in SS Disability, Welfare, tax code and every where else.

    Second, due to your lack of insurance knowledge your not even aware of who the problem free loaders are. The healthy 25 year old male who goes without insurance for 6 months between jobs doesn’t cost the system anything. The overweight smoking individual with uncontrolled diabetes who gets subsidized insurance and thus feels no need to improve their health cost hundreds of thousands. Welfare and foodstamps have shown if you give people enough public assistance to live off of they will live off it. What incentives does an unhealthy person have to get better or control their cost if healthy people are now paying their bills?

    Next we have the problem of rate sopread between 20 year olds and 64 year olds. Social Security and Medicare are already the largest intergenerational theft of wealth in the history of the world. Trillions stolen from kids to pay for grandparents who consume 3+ times what they put in. PPACA furthers that by forcing the young who already make substantially less to further subsidize the premiums of older workers who make considerably more and have lower needs. Who are the freeloaders?

    Great on paper you solved the problem of the free loaders that don’t cost money while ignoring the individuals spoending all the money. And you plan to force the healthy into the system wont work anyways you just showed them how to cheat the system and make it easier.

  33. The mortgage interest deduction only can be claimed if you itemize your return, not what most moderate income taxpayers are able to do – so the “rich” get the subsidy.

    The penalty for not buying health insurance attempts to force you to buy the most expensive product in the world – is that an incentive? It’ll come down to what subsidy you may get against the policy cost as opposed to just the penalty, which is pretty small. Notice that employees with company paid insurance don’t get taxed on the benefit.

  34. I find your site informative. I am an internist in a large health corporation. I would like to contribute.
    Jeff Balke, MD
    Board Certified Internal Medicine
    Chief Resident University of Minnesota 1992/3

  35. Jonathan,
    I don’t view tax funded universal health care as a penalty, since there are benefits received in return for the taxation. In the current arrangement, the 695 does not buy you anything. If you have no insurance and show up at the ER, they will not deduct 695 from your charges.

    You are correct regarding my dislike of the penalty not being dependent on its value. It is the principle that I object to.

  36. Margalit,

    You don’t like the structure of the reform program. It really has nothing to do with $695. If the minimum penalty number was $500 or $5,000, or the maximum was 1% or 5% of income, it wouldn’t make you like it any more. If the value of the penalty was set by a committee of behavioral economists who estimated the optimal values of penalties and subsidies to get 99% coverage, you still wouldn’t like it.

    Structurally, how is the approach you prefer different from a mandate from which one cannot withdraw, and so no penalty for non-participation can be received, but instead a “penalty” in the form of additional taxes is necessarily drawn from all who pay the tax.

  37. Jonathan,

    I do criticize the fact that the 695 is a political number because I do not agree with the compromise that necessitated a political number to be created. I do understand that there was no way for anybody to pass Medicare for all, which is my solution of choice, but there could have been options other than the one that Candidate Obama publicly opposed.
    I don’t like the mandate and I don’t like the constant vacillation between “it’s a tax” and “it’s under the commerce clause”. I think it’s just plain indefensible, and I think the President knows that, and I am deeply frustrated with this type of governance, and I am not alone.

    Political whiplash? More like a broken neck….

  38. ” I agree that the price of homes increases to offset the value of the tax break, but that was not the intention.”

    Zero sum game, pretty much. Any government “incentive” ends up like that (including my current REC initiative, honestly).

  39. No, we are talking about the public, not the Occupy Wall Street party in Boston. Hey readers, check out the editorial in tomorrow’s Washington Examiner:


    If you don’t want to check it out for the literal 90 seconds of reading it will require, I’ll just paste this part of it to have someone say what I have been saying fairly much since day 1 being here:

    “So how many other false claims did Obama, Reid and company make in their desperate attempt to push Obamacare through Congress over the outraged objections of clear majorities of the American people? We know they made a lot of them, beginning with the biggest Obamacare fib of them all: “If you like your health insurance, you can keep it.” Not only did Democrats use the CLASS Act as a cynical accounting gimmick to create a fictional $70 billion savings, but they also double-counted about $800 billion in savings from Medicare over the 10-year period starting in 2012. In fact, according to the Medicare program’s chief actuary, a very large share of these savings should not have been counted even once, because they are purely imaginary.”

    No matter how you interpret what Nancy Pelosi said back in March 2010 about passing the bill to find out what is in it, the fact that CLASS has been hopefully removed shows the truth to this legislation is more fraud than fact. And to all you blind faith supporters who want to continue propagating this lie forced on us by one party, you are disgusting people, because it is first and foremost about what is best for the Democrat Party, oh, and if America happens to benefit by chance, well good for them.

    And just to show you all I have no invested interest in an alternate party, thank you all you Republican blind faith supporters for putting us in at least one unnecessary war that has killed hundreds of thousands of people, just not on our soil.

    I leave all you pathetic party patriots with this little fact: the majority minority of voters in the US as of today are independents, and if there are people of merit and concern for what is to be in America come November 2012, it will be 2 things accomplished: a third party presidential candidate who will at least embarass the unilateral agenda of Republocrats, and, the majority of incumbents running for re-election both federally and in all states will be voted out of office. Even if that number is 50.001%.

    The truth always seems to come out, unfortunately sometimes too late to fix the immediate problem, but, it does come to the surface. PPACA is a fraud propagated by a fraudulant bunch of narcissistic, arrogant, insensitive lot of schmucks who call themselves representatives of the people. Who now want to try to put this foolish movement of the Occupy Wall Street as their poster children.

    I screwed up earlier with the sentence “you deserve the representation you deserve”. It should have been “you deserve the representation you elect”, but, now I see my failure, that should now read: you deserve the representation you SERVE!!!

  40. I forgot to mention that the interest deduction also serves the interests of real estate agents, in addition to home builders (who are more nearly the “intended” beneficiaries than banks).

    And how’s this for irony? From socialist France:

    France does not allow a home mortgage interest deduction. In 2007, newly-elected President Nicolas Sarkozy proposed creating the deduction as part of his legislative plan for sparking the French economy.[4] In August 2007, the Constitutional Council, the highest court in France, struck down the mortgage interest deduction as unconstitutionally creating a tax advantage that goes far beyond its stated goal of encouraging non-homeowners to buy homes. The Court noted that the deduction would apply to people who already own homes. (wikipedia)

    This argument is on the one hand totally in sync with the argument in this blog post (the mortgage tax deduction is just another tax incentive to encourage one kind of behavior and penalize another), and on the other hand totally out of sync in that it appears to rule all such efforts unconstitutional. Political whiplash, anyone?

  41. Margalit,

    Why point to the fact that the $695 number is a political compromise? Pretty much any dollar value in any tax or incentive plan is a political compromise. Criticize it for being too low or too high given your political objectives or your assessment of its causal effectiveness, but don’t criticize it for being a political product.

    Also, it is false that the mortgage interest deduction was “intended” mainly to maintain demand for bank loans. My understanding of the history is that it was originally intended to help with taking out loans of all kinds (which most directly benefited small business owners) and then was restricted in 1986 to home mortgages only, on the theory that it was good to encourage home ownership. The policy may primarily serve the interests of the banks these days, and I agree that the price of homes increases to offset the value of the tax break, but that was not the intention.

  42. “By creating the insurance mandate, Congress intended to discourage a behavior it deemed harmful. Deadbeat patients who consume subsidized healthcare without paying into the system impose unfair costs on the rest of society.”

    Is deadbeat patients an accurate representation of the uninsured? I thought these were poor, vulnerable populations….. If they are just deadbeat patients who choose not to pay their fair share, we could collect that fair share after they used the system, as easily as we can collect taxes, no?

    And how did we arrive at the magic number 695? Did we estimate the publicly paid health care expenditures for all the deadbeats and divided by the number of deadbeats? Or just pulled something out of a hat?

    Deducting mortgage interest from income is mainly intended to maintain “healthy” demand for bank loans and mostly benefits banks. The health care “incentive” is mainly intended to maintain “healthy” demand for insurance companies. Two wrongs do not make a right.

  43. Yeah, how’s that party in Massachusetts going? Last I hear, not exactly the poster child for Obamacare hope and faith. And so far no one is lamenting the loss of the CLASS section of the legislation.

    Deflect and distract. Gee, it really sucks when facts get in the way of false promises of saving the public.

  44. Never a concern or worry, until, it directly affects the supporter?

    If Congress were to pass a law tomorrow that directly affected your wallet or freedoms, are you just going to sit there and say, “oh well, that’s just the way it is”.

    Listen to the next lyric of the Bruce Hornsby song, “Ah, but don’t you believe them”. Wow, another example of hearing the lie enough and it becomes the truth. How many Neville Chamberlains in the health care field are there!?!?

    Go find the Larsen cartoon of lemmings running down a slope into the water, except one has an inner tube around himself and looking at the viewer, saying in no words “I may have to go in, but I’m not goin’ down.”

    Wow, all that false hope and faith wasted on an insincere Congress…

  45. DeterminedMD’s “slippery slope” argument makes no sense to me. The individual mandate is a means of keeping free riders from taking advantage of the healthcare system. When they show up in the ER the rest of us taxpayers have to pay for their care. The mandate simply means that the cannot shift risk onto the rest of us instead of handling it responsibly through insurance. In any event, the statute books are filled with laws grounded on rationales that, if taken to absurd extremes, could lead to “eat your broccoli” results. Congress certainly has the power to regulate interstate long-haul trucking. If it ever wanted to do something foolish, it could, theoretically, require all long-haul trucks to be domestically produced. Do the absurd result mean that Congress can’t regulate long-haul trucking?
    By the way – no one questions the right of Mitt Romney’s Massachusetts to impose an individual mandate on its residents. In the five years since it was enacted, has the Massachusetts legislature imposed the slew of liberty-crushing additional mandates that DeterminedMD worries about? Perhaps there is a lesson to be drawn ….

  46. Gooooolllllllly, Andy! Mayberry won’t never be the same! Do you think they will send us a doctor,too? I aint never seen no doctor. I have been to that thar publik skool.

  47. Here is at least one provider’s “issue” with PPACA, if you really wrote this piece to stimulate dialogue and alternate perspectives:

    1. Mandating every one has to purchase SOMETHING that has never been done before is a scary premise with the current lot of politicians who are not representing us, but just resenting us to have to come to the public to satisfy this “vote” policy that the Constitution mandates of leadership. If they get away with mandating people HAVE to buy health care insurance, (or to satisfy the petty retorts of otherwise, fine, pay the fine if you don’t) I guarantee you that in the next 5-10 years, government will be back with more mandates. The road to hell is paved with good intentions, see how many politicians understand it much less aren’t giving you the baffled look of a confused dog when hearing the adage.

    2. A panel to oversee the management of health care that is NOT accountable to anyone unless a super majority of Congress votes to eradicate this panel. If that premise does not scare the stool out of anyone who has any educational and attentive skills, well, you deserve the representation you deserve.

    3. Now allegedly NOT an issue, but, for the CLASS portion to have survived the voting process to put it into the bill, which by the way Nancy Peolosi did know of it but didn’t want anyone else to scrutinize it, shows how f—ing clueless these Democrats were in the first place.

    The beauty of life is two people can stand next to each other and view a scene or incident and come to completely different conclusions. However, if one says it is good to risk harm and chaos for the sake of the few who benefit, because the viewer is in that minority group, do you really have to give validation to such a limited and marginalizing point of view?

    Read these threads for a month, you’ll see what I mean once you get to know the players who are pro and con. As I joked earlier, if pro is the opposite of con, what is the opposite of progress?

    Really not so funny when you live out the joke!!!

  48. “Let’s stop suggesting otherwise, and start referring to the individual health insurance incentive.”

    Good luck with that idea (though I agree, but, “incentives” work better in some markets relative to others, and are, in the main, more speculative than objective).

    But, some SCOTUS watchers I read predict 5-3 to uphold, Kagan recusing. Scalia, Alioto, and Thomas in dissent.

    “The most important of these provisions allows homeowners to deduct from their taxable income the money they spend on mortgage interest. For a typical homeowner, this can reduce taxes by hundreds or thousands of dollars.”

    This has always smelled to me like a zero-sum game, a chimera. The tax “benefit” you get is likely precisely reflected in the cost and market value of your home.

    On the “mandate” thing. I agree that we have to have “everyone in the pool.” The way PPACA goes about it, while a reflection of political relality, is a gordian knot of corporate welfare and outright “welfare.”

    I followed every draft every step along the way.