Politifact Ignores Why ObamaCare Could Collapse
What did Politifact ignore? Only the single most important piece of context that brings home a Republican congressman's point about the potential instability of ObamaCare.
And why did Politifact ignore this crucially important point? Probably because this little hunk of context is something the Obama Administration and the media are worried might become well-known. Should Americans put two and two together as to how this law can be gamed, the entire ObamaCare system could crash.
Stay with me here…
What Politifact ruled correctly as true:
Ron DeSantis, who represents northeast Florida including St. Augustine, Daytona Beach, and areas near Jacksonville, predicted that the health care law will put negative pressure on the insurance market.
"It's structured in a way I think is going to end up failing," DeSantis said. "The tax that they put on you to buy insurance is lower than it would have cost to buy insurance, so I think a lot of people are going to pay the tax and that's going to destabilize the insurance market. And I think you will see problems with increased costs."
Politifact's correct but incomplete explanation:
The law’s individual mandate requires most adults in the U.S. to carry insurance coverage or pay a tax penalty. The tax is either a specific amount or a percentage of income, whichever is greater, and it’s phased in over time. Here is how the nonpartisan Kaiser Family Foundation summarizes it:
At most middle-income levels, the percentage of income is greater than the flat fee. Here are a few examples of what the tax would cost:
An individual with $30,000 annual income would pay a $300 penalty in 2014, $600 in 2015 and $750 in 2016.
An individual with $50,000 annual income would pay a $500 penalty in 2014, $1,000 in 2015 and $1,250 in 2016.
An individual earning $100,000 a year would pay a $1,000 penalty in 2014, $2,000 in 2015 and $2,500 in 2016.
Bottom line: ObamaCare fines are much cheaper than paying for health insurance premiums. No one disputes that. And thus far, Politifact's on point.
But here's where Politifact gets slippery:
Clint Stretch, a tax attorney in Washington, also pointed out that the penalty is not meant to be a better deal than health insurance. It’s meant to nudge the uninsured toward buying coverage.
"Assume an individual could get coverage for $3,000 or not get it and suffer a $1,000 penalty. All else being equal, the law has made the decision to buy insurance a $2,000 decision rather than a $3,000 decision," Stretch said in an email. "In effect the taxpayer’s choice is pay the Treasury or pay the insurance company – if they pay the Treasury they get no benefit." …
"If it were just a question of do I pay $2,000 (or insurance) or $700 (in a tax penalty), yeah that’s pretty much a no brainer," Jost said. "But on the other hand if I can get insurance through my employer for $200 a month and the alternative is not to do that and pay the penalty, it becomes a closer calculation."
What Politifact and its "experts" don't tell you….
What could potentially crash ObamaCare -- if the news gets out -- is the fact that it's much cheaper to pay the ObamaCare penalty than it is to pay for insurance, combined with the fact (which Politifact ignores) that ObamaCare removes the biggest incentive to purchase insurance -- the pre-existing condition clause.
Until now, people (like me) purchased and desperately held onto their health insurance out of the fear that if they got a cancer or heart attack, they could be bankrupted. Under ObamaCare, though, that incentive vanishes because insurance companies can no longer deny anyone over pre-existing conditions or increase premium costs based on the status of your personal health.
Here's the two plus two: Starting next year, you can wait until you’re sick to purchase health insurance. And if you do so, you cannot be denied or even charged a higher premium price. Here's the four: Because the ObamaCare penalty to be uninsured is much cheaper than purchasing insurance, why not do exactly that?
As I laid out in this piece, because ObamaCare allows me to game the system in this way, for the first time in over 25 years, I'm an uninsured-American. Going forward, my plan is to pay the annual penalty, which is ridiculously cheaper than insurance, and only purchase health insurance should I get sick.
As soon as the masses figure out this option under Obamacare -- that there's even less of an incentive to purchase health insurance than there was before ObamaCare passed -- that's how the system crashes.
For obvious reasons, neither the White House nor the media wants this information to become well known. They’re too invested in ObamaCare being part of the reason Obama's put on Mt. Rushmore. But it's bad law, Americans are not dumb, and I cannot think of anything more patriotic than to use civil disobedience as a way to bring the whole thing down.
We already have companies like Walmart and left-wing fever swamps denying or dropping those who likely would've received employer health insurance had Obama just left things alone. This means that even more people will be uninsured and, should these people figure out how to game the system like I have, in five years, we could have more people running around uninsured than we did before Obama spent hundreds of billions on this boondoggle.
This is Obama's nightmare come true. Which means it's the media's nightmare come true. Which means that like Politifact did, everything's going to be done to make sure no one knows about it.
Follow John Nolte on Twitter @NolteNC