The Ryan budget’s awkward embrace of the individual mandate
Obvious question: Does the Republican budget have an individual mandate? Obvious answer: Of course not. Republicans think imposing a tax penalty on people who don’t purchase health-care insurance is an unconstitutional assault on liberty.
Correct answer: It has two.
There are all sorts of reasons that health-care experts think an individual mandate is worth having, but they’re not relevant to this post. For this post, you just need to understand how the individual mandate works. Under the Affordable Care Act, if you’re not covered by some government program, and your income is above a certain level, you either have to purchase a very basic level of insurance coverage or the IRS will impose a fine, either 2.5 percent of your income or about $700, whichever is greater.
Here’s how the Ryan plan works: If you’re an individual who’s not covered by Medicare, you’re eligible for a tax credit up to $2,300 to purchase insurance. If you don’t purchase insurance, you get nothing. So, in practice, there’s a $2,300 penalty for not purchasing insurance. In essence, you’re giving the government $2,300, and you only get it back if you buy health-care insurance. It’s slightly more roundabout than an individual mandate, but it’s the same idea.
His plan for Medicare is even closer to an individual mandate. There, everyone has to pay into the system through payroll taxes. When you’re 65 years old, you get a voucher that will pay part of the cost of health-care insurance. If you decide not to use the voucher, or the voucher is insufficient, all the taxes you paid into the system are forfeit. Either you buy insurance as a senior, or you face a tremendous lifetime tax penalty.
Simon Lazarus has much more here. It’s not surprising, of course, that Republicans are still coming up with ideas that are similar in execution and intent to the individual mandate. The individual mandate, after all, was a Republican idea, the theory being that the right way to achieve universal health care and prevent people from gaming the system was to use the tax code to encourage personal responsibility and discourage people from waiting till they were sick to buy insurance, or to pass the costs onto the rest of us. They’ve not come up with anything better in the past few years, and so they’re awkwardly trying out new variants of the individual mandate even as they fight the mandate itself in the courts.
Correction: It turns out that Lazarus was assuming a policy from the Roadmap had been brought to the budget, which isn’t necessarily true. So it looks like there’s one individual mandate in the GOP budget, not two. More explanation here.