Obamacare cannot simply be “amended;” here’s why

The central operating plan for Obamacare is the personal mandate that young healthy people must buy health insurance at rates higher than their risk pool justifies in order to fund insurance for older less healthy people, and to fund insurance for those with pre-existng conditions. This results in a massive distortion in the risk pool for insurance companies to have to deal with. They have responded by rasing premiums and deductibles to heights never dreamed of. Some have simply dropped out of the Obamacare insurance exchanges.

This is an unconstitutonal provision in the Obamacare statute, plain and simple to most Constitution scholars except Chief Justice John Roberts. The four liberals who voted with him to uphold Obamacare are hightly partison poltiicians in black robes so I don’t count them as Constitutional scholars.

The mandate is thus a transfer of wealth from the young and healthy to the old and sick. Well, so what, isn’t the Social Security Ponzi scheme also such a transfer of wealth from young to old? Yes, but. The “but” is that it was established long before the current young and healthy were born, and there is nothing they can do about it anyway. Their money it taken from them the same way all taxes are collected, at the point of a gun. (Not right away, but if you owe taxes you manage not to pay at some point men with guns will come to your house. So it is accurate to say taxes are collected at the point of a gun).

Social Security “tranfer payments” so far haven’t not resulted in riots, although adding new transfer payments in the form of Obamacare has met massive resistance. The young and healthy actually have to do something, in this case buy an insurance policy they cannot afford and should not have to afford. They are refusing to cooperate.  To be sure, their refusal results in a fine they have to pay when they file their income tax return, but the penalty is less than the insurance premiums will be. Besides, Obama’s policies have saved many of them from even paying the penalty. Many of them don’t have a job, thanks to Obama, so they don’t need to file a tax return. The government has no other way of collecting the fine, at least no convient way.

Trump has said he is considering keeping this part of Obamacare.  Keeping this, the worst part?  He’ll have to re-think that, and I have no doubt he will.

The simple truth is that the problem of uninsured people with pre-existing conditions cannot be solved with insurance. Insurance companies cannot and should not be expected to pay for it because this group presents a risk that is not insurable.

While nothing can be done insurance wise for the current generation of people with pre-existing conditions, there is a ready solution for the next generation of those who are healthy now but will suffer crippling illness at some future date. That is to bring back something that used to be common in the health insurance business before government got involved, about the time Medicare was enacted. Back then, there was something called “guaranteed renewable and non-cancellable to age 65” health insurance. Back then, before about 1970, if you were young and healthy you could buy health insurance while you were healthy, at low-risk rates. So long as you kept your policy in force, paying only the premium increases according to the general risk for your age group of healthy individuals, your policy would conuintue to cover you if you contracted a catastrophic disease or illness. The premiun would remain the same as for healthy people.

This is an insurable risk for insurance companies. Their actuaries can determine the risk they are insuring at the time the policy is first issued. The premium is calculated to cover the risk of an actuarially expected number of people out of 1,000 likely to contract serious illness before age 65.

With all the wonderful improvements in staying healthy that have occured since then, such as a much lower number of people smoking, the premium for a healthy 25-year old would be a pretty good deal for a policy that would cover him all the way to age 65, no matter what health problems he suffered along the way. If only we had a government policy that would step aside and allow the free market to create this scenario, we’d be on our way to a sensible national health insurance market. Government could help by making all insurance premiums tax deductible, in parity with employer-providing insurance.

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