When Is A Mandate NOT A Mandate?...When It Was Designed Never To Be Enforced...

I wrote to President Obama a couple weeks ago, advising him to consider trading a budget resolution and a debt-ceiling increase for a one-year delay in the individual mandate. I suggested there were both solid political reasons and substantive reasons for doing so.

He never got back to me. I mean, I understand; he's been a little busy...

Then last week, without acknowledging that the roll-out of new federal health exchange has been a multi-dimensional disaster, The White House released the news that there will be a six-week delay in the enforcement of the individual mandate. People will have until March 31, 2014, to apply for qualified health coverage before facing a potential penalty.

What penalty?...

I have to say, it has been three years since I read (parts of...well, the personally-relevant parts of) the legislation itself. So I was rather surprised to catch a rant by Lawrence O'Donnell, former Senate staffer, TV consultant (he helped make The West Wing seem like it could really happen), and now host of The Last Word on MSNBC, in which he shattered all the silliness surrounding the "delay Obamacare" shenanigans of the Tea Party and the feckless, follow-any-shiny-object fixation of the media on the roll-out, by pointing out that there really isn't a mandate in the law, except on paper...because the mandate was designed never to be enforced.

First, O'Donnell showed a portion of a White House press conference, in which an intrepid correspondent asked Press Secretary Jay Carney if the recent roll-out snafu would be severe enough to warrant a one-year delay in PPACA's individual mandate, which requires that all individuals either sign up for a health plan or pay a penalty.

Carney gave an answer that would make a Jesuit proud . In short words and simple sentences, Carney said essentially this: "The law is very clear. Individuals will not be subject to a penalty if they live in a state which has refused to participate in Medicaid expansion, as many states with republican governors have done, or if they live in an area which does not provide them with access to affordable health coverage."

The reporter asked for clarification: Might this be taken to mean that someone who can't buy health coverage because the marketplace website doesn't work be considered to live in a place which doesn't have access to affordable health coverage?

Carney repeated his answer.

In other words, yes: if the exchange website isn't working, nobody will be penalized.

But here is the real gem. The law takes great pains to enumerate the fines that might be levied over time upon individuals or employer groups who do not take the steps required by law. Much has been written and reported on that subject.

But the agency tasked with collecting those fines is the Internal Revenue Service. And here's the guidance the law gives to the IRS, from page 131 of PPACA:

"Section 5000 A Title 26- IRS Code Chapter 48- Maintenance of minimum essential coverage:
(A) Waiver of criminal penalties-
     In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.
B) Limitation on liens and levies-
     The Secretary shall not-
          ( i) file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section , or (ii) levy on any such property with respect to such failure."

Okay, so, I'm not a lawyer, but I know how to read, and it sure seems to me that, written into the law, there is a "get out of jail free" card for anybody who might, for whatever reason, fail to comply with PPACA's mandate. And given that "taxpayer" is a term which can apply equally to an individual or a corporation (which, as I understand it, is now a person, too), it seems to me that the law pretty explicitly says that no one will ever be required to pay a fine for non-compliance with the PPACA mandate...ever.

So, when is a mandate not a mandate? When the law it's written into clearly and explicitly forbids the enforcement agency from ever collecting any fine, ot taking any other adverse action, against anyone who doesn't comply with the mandate. Ever.

I'm not sure how aware of this provision Our Friends In Government might want people to be of this little magic trick. I'm sure supporters of the law would rather not know that people can freely avoid signing up for a health plan, since there's no penalty for not doing so: that might affect enrollment.

And chances are opponents of the law won't want people to know about it. either. That would mean that some Republican lawmaker would have to take to the ramparts and insist that the law be changed to require the IRS to levy and collect those fines, liens and judgments...which, of course, would be tantamount to a Republican insisting that the government raise taxes.

But for now, I know. And if you've read this, you know. And we have friends. Let's educate them, shall we?...

Dear President Obama...Give Your Opponents A Delay Of The Individual Mandate...And Watch 'Em Choke On it...

Dear President Obama:

We haven't met. For several years, as your PPACA was being formulated, I tried to share some advice with you about elements having to do with small business, health exchanges, and how to handle the issue of a mandate. You didn't take me up on any of it, but that's okay; I'm a consultant, so I'm used to giving folks advice that they're free to ignore.

I'm not a big fan of the law. I think it's an object lesson in political overreach, and too much of it depends for its effectiveness on organizations, advisory panels, and technical capabilities which don't exist yet.

But I will give you credit: the insurance reforms you put in place are generally helpful to real people. And the exchanges, though you're having some problems, are going to change forever (hopefully for the better) the way health coverage is bought and sold; I'm a big fan of that.

But now you're sorta stuck. The "Loyal Opposition" has closed down the Government, and we're nearing a debt ceiling crisis, and the parties are pretty dug in on their respective positions. Not cool...

I'm not in your shoes, but I HAVE had some experience in political negotiations with recalcitrant adversaries. And I've found that, in some circumstances, a good tactic is to give my opponents what they want, and watch them choke on it.. This might be one of those times.

If I WERE in your shoes, here's what I'd consider: I'd trade away a one-year suspension of the individual mandate in exchange for a clean Budget Resolution AND a long-term fix of the debt-ceiling. It would either break the impasse, or show your opponents up as complete dopes (as if more evidence were necessary).
And it would be a good deal for you. Here's why:

1) The big reason, of course, is that it would enable you and yours to get the country on a better long-term financial footing. That, I think, is the desired result. I hope you have the long-term interests of the country at stake, and this isn't just a penis-measuring contest. I'll take your word that it's not;

2) You've already pretty much unilaterally granted temporary exemptions to certain key constituencies...and big ones. Big Labor. Big Business. Even employers with more than 50 employees. So you've set a precedent; you WILL compromise PPACA when you deem it to be in your interests to do so. Right now, it's the little guys, individuals and small businesses...who are set up to take it in the teeth because of the mandate. These are the folks who most need the help that PPACA purports to provide. Why not give the little guys that same break you've already given most of the Big Guys?;

3) You already know that the Government is not currently in a position to administer the effects of the mandate effectively. You're relying on "self-reporting" income to the IRS as it relates to calculating taxpayer subsidies. And the means you wish to use to enforce the mandate...specifically, fines on those who don't purchase coverage...are hard to understand and currently impossible to administer. Seems to me a good time to give in on a point...when you don't know how you're going to follow through on it anyway;

4) Granting an exemption from the mandate will not keep anybody who WANTS to buy health care coverage from shopping for and obtaining coverage via the exchanges, be they public or private. I have argued (unsuccessfully, so far) that the vast majority of Americans WANT to have health coverage, and will buy it (especially with the help of subsidies) if it's available. My advice years ago was that, before you drop the hammer of a mandate, it would be wise to make sure the voluntary marketplace is working as well as it can, THEN drop the hammer on the relatively small number of folks who could buy coverage, and have it available, but choose not to purchase it. Judging by the early volume of folks rushing to check out the exchanges, there are PLENTY of folks who are looking to purchase coverage, and are willing to pay for it;

5) Your experts keep telling you that the mandate is necessary to get everyone "into the pool," that the young and healthy MUST buy into the system in great numbers in order to subsidize those who are not so young and not so healthy. The demographics of the "young invincibles" suggest that, even if they all signed up tomorrow, you'd still be short of break-even by about fifty percent, if your goal is six healthy people for every one of the one percent of big utilizers, and three healthy people for the top five percent of utilizers. The numbers never HAVE worked. And if you buy Item #4, and you let everybody who wants to buy coverage in the voluntary marketplace to do so, the sting of the mandate might not hurt so much, and;

6) A year from now, the exchanges will be operating a lot better, you'll have at least a few million folks signed up, we'll know better who they are, what rates they're paying, and have a few insights into their utilization of services. You'll simply have a much better story to tell...and maybe you'll have figured out how actually to administer the mandate.

To me, this looks like a pretty good deal for you. You right the country. Everybody who wants to buy health coverage can do so. You have time to get systems operating properly. An additional few million people get covered. You "cave" on one matter of "principle" which might be based on faulty assumptions anyway...But it seems to me that principle has sorta flown out the window a ling time ago.

I recognize that this argument might be entirely too sensible to succeed in Washington. But if you think about it for about 60 seconds, I think you'll see the value.

And imagine the looks on your adversaries' faces when they figure out you've gotten everything you wanted in exchange for bargaining away something which is of relatively little value, and might even make your signature legislative achievement better.

Don't thank me, JJP

President Obama DARES Supreme Court To Throw Out PPACA...Who's Advising This Guy?...

I've long believed that if we held conversations only about what we knew, and not what we thought, those conversations would be a lot shorter.

So I was going to keep my big trap shut rather than join the chorus of talking heads and partisans of both persuasions about the possible outcome of the Supreme Court's review of PPACA's constitutionality.

But then The President goes and does something really, really dumb...

In remarks yesterday, President Obama declared that for the Justices to overturn PPACA on constitutional grounds would be a new high water mark for judicial activism. And that nine unelected judges shouldn't be permitted to overturn a law which had been enacted by a duly-elected Congress.

THEN he said that, since the linchpin of PPACA is the individual mandate, invalidating the mandate would essentially invalidate the law.

Set aside for a moment that, as my Mom would often comment, "What do you EXPECT the guy to say?". He is, after all, defending what he sees as the hallmark of his term.

But I'm astonished at the politically maladroit nature of his speech, and what those remarks imply about the nature and quality of the advice Obama is receiving from his handlers.

First, while the First Sports Fan is undoubtedly familiar with the term "a win is a win is a win," it's very clear to those of us at the grass roots that the passage of PPACA was a narrow partisan exercise. The law passed by one vote...hardly (you should pardon the expression)a mandate.

Second, there's growing evidence that, even though many Americans (seniors, dependent children and young adults, those with pre-existing health conditions whose coverage might otherwise be discontinued) have benefited significantly from the early enactment of provisions of the law, PPACA remains quite unpopular with voters. Perhaps because there hasn't been any REAL debate on the law's merits. The Administration has done a lousy job of making its case in the court of public opinion, instead banking on the smug position that once people understand how great the law is, they'll support it. I don't see that happening, do you?...At least not in the two years since its passage.

Then, to substance: Irrespective of whether the individual mandate was initially a trope of conservatives, it is just that: a trope, a commonly-stated idea which has been adopted as truth, despite there being little evidence to support it.

The mandate was a political tool, a sop to liberals who were seeking a "public option" for health coverage. Despite its being lionized on the left and vilified on the right, I've seen nothing from a credible third party which suggests that the economics of a mandate would lead to lower utilization of services or less cost-shifting from the uninsured to the insured. I've written about this before, here: http://polkiananalysis.blogspot.com/2011/01/what-difference-does-mandate-make.htmlt

My objection to the mandate has nothing to do with liberty. It's that the mandate will not achieve the economic goal it's been enacted to achieve, and that the enactment of the mandate will blow the lid off premiums, since the cost of coverage will no longer matter; the government says you have to have coverage, not that coverage needs to be affordable.

Finally, there's the issue of "severability." Virtually every piece of legislation incorporates a provision which states that parts of the law might be changed without invalidating the rest of the law.

What GENIUS in the Administration decided to leave severability language out of PPACA? I hope he or she is no longer employed. I'm sure it sounded like a swell idea at the time; "This way, if anybody decides to attack a component of the law they don't like, we can get right up in their faces and say, 'Oh yeah?...Well, just TRY to toss that provision out. You can't do that without throwing out the whole thing'."

And what GENIUS said, "That seems like a GREAT idea!"?

Even with all that, The President KNOWS the Supreme Court has essentially three options: they can maintain the entire law as constitutional; they can throw out the mandate and a couple related provisions and let the rest of the law stand; or they can toss the whole thing out.

Seems to me The President has DARED the Court to throw the whole law out the window, by making the political (not the economic) case that without the mandate the rest of the law can't stand.

And they might just accommodate him, and use his own words against him.

What do I THINK is going to happen? I think the Court will toss out the mandate, plus guaranteed issue and community rating, preserve those elements of the insurance reforms which have already taken effect (since, theoretically, the associated costs have already been baked into their rates, and say it's too early to make judgments on the rest of the law, since most of the provisions have yet to be enacted.

What do YOU think is going to happen, and what facts do you use to support your position?