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Home Publications Blogs Beat the Press George Will Will be Horribly Disappointed that His Scheme to Kill the Affordable Care Act Will Not Work

George Will Will be Horribly Disappointed that His Scheme to Kill the Affordable Care Act Will Not Work

Saturday, 19 January 2013 17:35

You gotta love a guy sitting around thinking of ways to kill a bill that extends health insurance to people who don't have it and ensures that people who have insurance and then lose their job due to illness, can continue to be insured. That's what George Will does for a living and he is very happy today because he thinks he has a way to kill the Affordable Care Act (ACA).

Will looked at Chief Justice Roberts' rationale for casting the 5th and deciding vote in support of the constitutionality of the ACA. He says that it rested on the idea that the penalty for not buying insurance was relatively modest. Therefore people might opt to pay the penalty rather than buy insurance, which means it was not actually forcing people to buy insurance. Will argues that this logic will prevent Congress from ever increasing the size of the penalty.

Will then does some arithmetic and points out that for someone earning $100,000 a year the penalty for not buying insurance will be $200 a month whereas a basic insurance policy would cost $400. He then notes that if someone gets seriously ill they could always then opt to buy insurance. Since $200 is less than $400, Will says large numbers of healthy people will opt not to buy insurance. This will force up the price, since the people buying insurance are relatively unhealthy, leading more people to pay the penalty. This will cause more healthy people to opt out and pay the penalty, giving us a wonderful death spiral and making George Will very happy.

There are two problems with Will's logic. First, the insurance will likely pay for many non-serious illnesses that even healthy people would otherwise have to cover out of pocket. In other words, it is not a question of paying $400 for nothing as opposed to paying $200 for nothing. It is a question of paying $400 for insurance or $200 for nothing. It is not clear that many people will make the choice that Will wants them to make.

The more important problem with Will's thinking is that there are an endless number of ways to slice and dice the restrictions so that the option of not buying insurance is less attractive. For example, the cost of buying insurance can be made higher for those who had previously opted not to buy into the system. Suppose the cost of later buying into the system rose 25 percent for each year that a person opted not to buy in. (Medicare Part B works this way and the vast majority of beneficiaries do chose to buy in when they first become eligible.) This would make the arithmetic of opting out much less favorable.

The rules can also be changed to make pre-existing conditions uncovered for the first 2 years after buying insurance for those who opted to pay the penalty rather than buy into the system. Neither of these measures would in any obvious way run afoul of Justice Roberts' argument for the constitutionality of the ACA. 

Of course if the Republicans continue to maintain a majority in the House and they are determined to prevent any legislation that can address problems that arise with the ACA, then Will may get his wish and the ACA may be undermined. However that route would have nothing to do with the constitutional restrictions put in place by Roberts. So score this one as a big strikeout for George Will.  


Comments (15)Add Comment
Mandatory health insurance
written by Jennifer, January 19, 2013 8:17
The obsession in some circles with the insurance mandate never ceases to amaze me. While the media always manages to find some people who insist they don't want insurance the vast majority of the population is concerned about GETTING insurance. There are certainty issues with insurance costs increases as lowering the overall cost of health care was the weakest component of the ACA. However I think it is the hope for many of us that as coverage increases and more people are brought into the system the law will evolve, hopefully to include the public option that should have been there in the first place. Apparently, this does not include George Will.
written by watermelonpunch, January 19, 2013 8:18
I've never been a believer in this idea that huge swathes of people will opt out simply because the math works in the short term and they "like the odds".

(This blog desperately needs an "eye rolling" smiley! ha ha)

That type of thinking may be typical of stock traders and wealthy people who can play with their money, and make rational penny ante decisions with surplus funds, in hopes of a gambling pay-off. Because, you know, it doesn't really impact their day-to-day lives or their health, survival, or even their general comfort.

I think it is NOT the kind of thinking done by the vast majority of ordinary people making decisions that effect their health, well being, and the quality of their lives, or maybe even their survival.

Ordinary people simply want to be able to go to the doctor when they get a UTI, without having to worry about shelling out $250 on the fly because it hurts to use the bathroom, & they're worried about sepsis from a kidney infection down the line.

I'm fully convinced that most people who are often living generally paycheck to paycheck (be it paycheck to paycheck at $25,000 a year or $95,000 a year)... will recognize that paying $400, or even $800, over the course of a year is FAR preferable than paying $200 once a year, & having even once or twice a year, a nasty surprise payment of $200-500 because of a "routine" but necessary-to-treat-now medical need crop up because they get a sinus infection, sprain an ankle, or contract an STD (all things quite likely for even young healthy people!!)...

I don't buy the "gaming theory" as being very relevant.
All that theory does is showcase the total disconnect from the vast majority of Americans on the part of the person suggesting it.

Most of us don't have the luxury of playing games with our money when our health depends upon it.
written by watermelonpunch, January 19, 2013 8:25
Oh, and thanks, I actually didn't know that about Medicare Part B.

I've never personally heard of anyone opting out... Most often I've personally heard people really happily celebrating their 65th birthday because of their gained Medicare eligibility!!

But then, most of the people I know, are you know, average Americans. (ie: meaning much like most Americans!!)
George Will is Afraid Consumer Choices Can Replace Insurance Choices
written by Last Mover, January 19, 2013 9:36
George Will can't even appreciate the individual mandate was put in place to keep his beloved extortionist private health insurers in business rather than have a public option or other forms of competition.

Will appears terrified that consumers and health providers will be making decisions that insurance companies were making for them before ACA.

Given no pre-existing limits and community ratings, the death spiral set up by Will is likely backwards and many consumers once shut out will likely line up to get insurance not necessarily because they're unhealthy, but simply due to new rules that prevent the bait and switch tactics that rendered much insurance useless before ACA.
A much-too-idealized view of medicine, overlooking the regressiveness of the mandate
written by Rachel, January 20, 2013 7:57

There are many people for whom adequate health care is not accessible. Insurance is available. Adequate care is not. So the mandate forces these people to purchase overpriced catastrophic care. This contributes to the unresponsiveness of the medical market.

Moreover, since lower-income people are the ones most likely to have trouble accessing health care, the mandate is regressive. It makes America more unequal. So it's another big step down a path where we've gone much too far already.

written by skeptonomist, January 20, 2013 8:57
Will is being especially stupid, even for him, because he fails to recognize that it is in the interest of insurance companies to have people buy insurance, rather than pay a penalty or tax to the government. As Last Mover says, the mandate is for insurance companies. Thus they will promote slicing and dicing so that the maximum number of people buy insurance. The downside is that changes going forward are likely to be in favor of increasing insurance company profits, rather than providing better service - this is the normal course of legislation. The ACA is still a Rube Goldberg solution to health care, even if it doesn't fail on this particular point.
Subtitle for this post: "Will Sends In Another Dispatch from RW Fantasy-land"
written by Matt, January 20, 2013 11:05
I suspect the people who decide to "game" the insurance system must live in the same RW fantasy-land as the people who can simply reduce their economic output when their taxes go up.

Why anybody regards Will, a consistent reporter from that plane unconnected to our own, as a commentator worth reading in reference to policies here in REALITY is a mystery.
written by Robert Waldmann, January 20, 2013 11:26
My impression is that Will is out of touch with American reality (I am sitting in Rome typing). How many uninsured people have family income around $100,000 or roughly twice median family income. I am tempted to go on and on about out of touch pundits (especially conservatives) who don't realize how absurdly rich they are, but I suspect that he is just cheating and knows perfectly well that his example is untypical.

On the other hand, he over looked a key argument. The penalty for not getting insurance and not paying the penalty tax is -- nothing. The IRS is specifically forbidden from garnishing paychecks or liens on property or, well anything really.

The horrible tyrannical unconstitutional mandate is based on moral suasion (plus maybe bills in the mail which can be thrown straight in the trash).

In a way this is 22 dimensional chess -- Obama (through sheer luck I'm sure) got the insurance companies to claim they supported reform (and not fight it as openly and effectively as in 1993-4) by threatening to propose reform without a mandate. Then Democrats in the Senate mostly watered the mandate down to nothing much.

It's paying $400 dollars for nothing or paying $0 dollars and ignoring complaints from the IRS which can't be enforced in any meaningful way.
On a tangent
written by Nassim Sabba, January 20, 2013 2:40
I had a question that I don't know where to look for a solutions, maybe someone can place a link to such an organization.

I am wondering what if groups of people had cooperative non-profit insurance organizations. Like cooperatives, people would pay dues and volunteer in some aspects of the running of the organization, not to save money, but to get members involved and keep things on the level.

Another possibility is an "insurance union" compared to a "credit union".

Would such member-insuring organizations be anti-social? Would they help the overall goal of insuring everyone?

They would have the power to negotiate prices with providers, monitor providers, and publish reports on providers.

My doctor recently announced his retirement when the wind of exposing those getting kick-back from pharam industry hit his sail the wrong way. The above type of organizations could monitor that out of their own interest and keep providers honest and lower cost of medication by making it less pervasively used.

Anyhow, are such organization legal and what are the draw-backs. I am surprised that labor unions don't self insure. What is the law or arithmetic against that?
Thesaurus George
written by jumpinjezebel, January 20, 2013 2:42
Ol' George is wrong again as usual. Of course he starts out the piece by using data and ideas from that paragon of evenhandedness the CATO Institute. This group of Billionaire funded RWNJ's is a terrorist organization against the Middle Class as NOTHING that has ever been done for them has their stamp of approval - only those ideas and policies that benefit their benefactors - the super rich.
I'm thinking that those paying $200 for nothing . . .
written by Carolyn Kay, January 20, 2013 6:07
. . . will eventually want something instead of nothing.

In other words, they may want public option insurance in return for their penalty payments.

Jan Schakowsky and others are already introducing a public option bill.

Carolyn Kay
written by Eric377, January 21, 2013 8:26
Will is daydreaming for sure, but anyone already thinking about changes to make it work better is daydreaming, too. This law, as enacted, has to work well enough so that Dems do not get pounded come November 2014. It's tiring for sure to always think this thing has another date with doom, but sadly, it really and truly does. Make it work now, not sometime after a public option is added or whatever.
written by watermelonpunch, January 21, 2013 12:59
@ Rachel: begging your pardon, but I think you're overlooking some of the bigger picture issues, and focusing all your attention in one place that really doesn't give the whole story.

While the argument you are repeating might sound good on the surface...
Considering many of the other details of the law, as well as many of the details of why a lot of people don't buy insurance now, and the situation that healthcare providers, employers, and individuals are in right now, sheds more light on what looks to you to be counter-intuitive.

As for this:
There are many people for whom adequate health care is not accessible. Insurance is available. Adequate care is not.

I see it as the exact opposite.
written by watermelonpunch, January 21, 2013 1:21
@ skeptonomist
You may be making a very valid point about the quality of care vs. profits. And it's a scary prospect, and bound to cause a long painful road ahead.

But a too large part of the population of citizens see crappy care as preferable over no care at all.
For example, Deamonte Driver might still be alive today if the local barber shop was legally allowed to pull a tooth for a small fee, like in the olden days.

Of course I'm not advocating that barbers go back into the dental business. I'm just using that as a very extreme example of "inferior care" that could be better than none at all, from some perspectives.

@ Nassim Sabba
Interesting questions. I don't have the answers. I'll check back if I find any.
written by Pat, January 22, 2013 5:10
I don't at all disagree, but I do hope the next Democrat takes Will's point just barely seriously, just marginally enough that the next revision to the penalty is of the form:

"Any W-2 employee paying FICA taxes who fails to obtain private health insurance will be enrolled in the Medicare system as a current subscriber, in addition to future beneficiary. FICA taxes for such employee will increase $___ per month."

Impossible for even the Randy Barnetts of the world to make a trivial constitutional argument against that (knocking wood...).

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.