The individual mandate for health insurance, upheld by the Supreme Court a year and a half ago, is now leading to millions of policy cancellations in the individual insurance market. The mandate overrides any existing policy which does not provide minimum coverage. The employer mandate, stipulating that any business with 50 or more employees must provide health insurance for all fulltime employees, has caused many businesses to replace fulltime employees with part-timers.
But these are not the only forms of coercion under Obamacare. As reported in yesterday’s New York Times, “Court Confronts Religious Rights of Corporations”, the Supreme Court is expected to accept a case involving the Hobby Lobby’s refusal, on religious grounds, to pay for insurance coverage for the contraceptive coverage which is required to meet minimum standards.
It would be much better to replace all of these coercive mandates with economic incentives. This could actually be done in such a way that would also make healthcare less expensive, thereby giving a big boost to our economy. Here is one way to do this, as I discussed in my November 14, 2013 post:
- Provide a flat and universal tax credit for health insurance coverage which applies to everyone and not just for employer provided healthcare. The (refundable) credit would be roughly the amount necessary for catastrophic insurance coverage.
- Convert Medicare and Medicaid into a means-based addition to this tax credit.
- Everyone with continuous coverage (paid for by the tax credit) would be protected from price spikes or cancellations if they get sick. This provides a strong incentive for everyone to buy and retain coverage.
It is entitlement spending which is driving our country’s fiscal crisis. And healthcare programs such as Medicare and Medicaid make up a big part of entitlements. In order to get these costs under control, we need to first get the cost of private healthcare under control. The best way to do this is with economic incentives rather than coercive mandates.
Obamacare doesn’t need to be repealed. It could just as well be modified and improved as described above.