When the GOP suggested President Obama delay the individual mandate for a year, the media brought out the pitch forks and torches while screaming, “Freak! Racist! Extremist! Arsonist! Anarchist!” But now that a reality is fast-approaching that could see people fined/taxed for not buying ObamaCare through websites that don’t work, Jonathan Chait’s New York Magazine is joining the FreakyRacistExtremist brigade by suggesting a delay of the individual mandate:
The real upside here is that, because it doesn’t require Congress, the administration could use a mandate delay to actually improve the functioning of the law, as opposed to using it to destroy the law, as Republicans in Congress have suggested. The Republican’s mandate-delay plan was to pass a fixed-length mandate delay — they proposed this before any website failures became public — as a condition for reopening the federal government, and then just continue to trade mandate delays for bills reopening government, so that the mandate would be delayed indefinitely. That’s rank sabotage.
The problem with Chait’s rationalization is that his delay is really just another form of “sabotage,” and probably one more effective than anything the GOP-who-can’t-shoot-straight could come up with.
If the administration takes Chait’s advice and suspends the mandate, the only people who will sign up are those desperate for insurance — the drains on the system who are old and sick.
In order to avoid a financial death spiral, ObamaCare needs young and healthy Invincibles to pay for health care they do not need. Without the stick of the mandate, the Invincibles are even less likely to sign up than they are now. And without them, ObamaCare collapses.
The death spiral works like this: If only the old and sick flood the market, the insurance companies have to increase everyone’s premiums to offset the cost. If premiums increase, even more healthy people drop out, and the problem grows exponentially until a collapse occurs.
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