How ObamaCare Might Be Repealed

As long as Obama is president, it is unlikely that the recently-passed health care law will be explicitly repealed. However, it is quite possible that if certain constituent parts of the law begin to fail a radical transformation could take place.

The longer-term Achilles’ heel of the law is the health insurance mandate. Following closely in terms of vulnerability, but a more short-run concern,  is the projected Medicare savings.

Each of these can and will likely be picked apart.

First, without mandating the purchase of health insurance by every person in the US, the much-touted prohibition against excluding pre-existing conditions from insurance coverage will not work. Individuals would just wait until they get sick to buy insurance. The whole insurance system would collapse when the complete pre-existing conditions reform comes into being.

It is possible, though not likely, that the courts will hold that Congress has no authority to mandate the purchase of officially-sanctioned health insurance. Let that pass for now.

Will the fines already included in the law be adequate to induce purchase of insurance by young, healthy individuals? There is reasonable doubt that they are. If they are not, Obama will have to come to Congress to raise the fines. After November, he will not succeed.

Who will enforce the fines? This is unclear in the law. (The police?!) Will the Internal Revenue Service have enough manpower? Some have argued that the IRS cannot, with current budgets and employees, enforce this. After November Obama will not likely get this expansion. (Furthermore, will these violators be able to pay the fines?)

If the enforcement of the mandate fails, the system collapses.

Second, the hundreds of millions of dollars of projected Medicare savings do not yet have the force of law. These will require substantial reductions in the goodies seniors get from their Medicare Advantage plans and well as other tightening in the Medicare program itself (e.g., doctors’ fees). The elderly will scream and the Congress will fall to its knees – especially as the “irresponsible” politicians play that card. The deficit will expand just as interest rates will be rising from the stimulus, thus retarding economic recovery and growth.

In addition, Medicaid will be under increasing pressure both as coverage expands and state budgets become tighter. Other state expenditures (say, on education) will have to fall to pay for this. The various interests groups will protest.

So in the final analysis the system can be picked apart. Obama will be asking the Congress to reform the reform. If the “reforms” he wants can be closed off then the death of a thousand cuts will begin.

The story of ObamaCare is not over.

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About Mario Rizzo 75 Articles

Affiliation: New York University

Dr. Mario J. Rizzo is associate professor of economics and co-director of the Austrian Economics Program at New York University. He was also a fellow in law and economics at the University of Chicago and at Yale University.

Professor Rizzo's major fields of research has been law-and economics and ethics-and economics, as well as Austrian economics. He has been the director of at least fifteen major research conferences, the proceedings of which have often been published.

Professor Rizzo received his BA from Fordham University, and his MA and PhD from the University of Chicago.

Visit: Mario Rizzo's Page

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