One Upside of Obamacare Delay: Obama Cut Taxes!

December 20th, 2013

As I noted last night, the Administration cut the taxes for 500,000 people (by their estimate, probably somewhere in the millions)  who had their insurance policies cancelled. How you ask? Well, we all know that there is no Obamacare mandate. There is just a tax on going uninsured. So, because Secretary Sebelius determined that Obamacare was a hardship, and made it too expensive to buy Obamacare, she waived the tax imposed on those who do not sign up for Obamacare. By pure executive fiat, perhaps millions of Americans got a a tax cut! Huzzah!

But why stop here?

They won’t stop here. This improvisational government will soon be nudged to give hardship exemptions to millions of others who cannot afford Obamacare, because of Obamacare.

Update: Politico offers six questions POTUS should be asked during a press conference. Man, when you lose Politico:

2) Why did you exempt so many people from the individual mandate after your administration fought all the way to the Supreme Court to protect it? And then why wait until Dec. 19 after families worried for months about losing their coverage?

In a surprise announcement late Thursday, the administration issued a ruling that people who had their health plans canceled would be exempt from the individual mandate under Obamacare.

The move aimed to further defuse some of the public anger over Obama’s failed pledge that Americans who like their insurance plans can keep them. But it raised serious questions about the strength of the individual mandate, which is the glue that keeps the law together.

Making catastrophic health plans more broadly available poses problems for insurers. It could disrupt the insurance pools, since insurers and actuaries had assumed that people shifting from the old individual market would go into the new bronze, silver or gold plans on the Obamacare exchanges.

A senior administration official described the move as a transition policy. The administration does not expect many people will take up the new option, but wants to ensure that it is available to those who had plans canceled.

But it immediately provided new ammunition to Republican opponents of the health law who will want to hear why Obama initiated this change with only four days until the deadline for obtaining coverage Jan. 1.

Update: And more questions from Seth Chandler:

2. Your Solicitor General argued to the Supreme Court that the individual mandate, what you called the minimum coverage provision, was crucial to the Affordable Care Act, that it, unlike other provisions of the ACA were inseverable.  Here are quotes from pages 46 and 47 of the brief filed by your Solicitor General:

It is evident that Congress would not have intended the guaranteed-issue and community-rating reforms to stand if the minimum coverage provision that it twice described as essential to their success were held unconstitutional.

It is well known that community-rating and guaranteed issue coupled with voluntary insurance tends to lead to a death spiral of individual insurance.

Given the arguments made on your behalf, which may well have been correct, why are you not concerned that exempting more individuals from the individual mandate will not, as the insurance industry is complaining, destabilize the insurance markets and threaten the success of your legislation?