Wednesday, July 18, 2012

Mandate, Shmandate?

Regular readers know that, come 2014, it'll be more economically efficient to drop their health insurance than to keep it, since plans will be guaranteed issue with no exclusions for pre-existing conditions. Since the ObamaTax is (at least initially) going to be a lot less than one's premium, why would one purchase insurance before a claim?

Now you may be thinking: "But Henry, if I don't buy coverage I'm going to have to pay that tax or I'll be in hot water with the IRS."

Um, maybe not so much. Reason's Jacob Sullum makes the case:
"Even paying the penalty is effectively optional, because Congress ... barred the Internal Revenue Service from using its most effective tools — liens, forfeiture, and prosecution — to collect it... the IRS, confronted by uninsured taxpayers who refuse to pay the penalty, must instead resort to "scary letters and threats to withhold tax refunds."
Hmm, scary letters? I can handle that. As I think most people could.

The problem here is that Mr Sullum's just not thinking this through. If millions (or tens of millions) of Americans "opt out" and also refuse to pay the penalty tax, what's left of the system falls apart. For the Obamastration, this is a feature, not a bug, because it paves the way for what they really want.

[Hat Tip: FoIB Holly R]
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