• Post-decision two cents

    As you can imagine, everyone has an opinion on this, including me. I’ve already written two pieces, and when they are posted, I will link to them. As an aside, my concerns from my pre-decision two cents remain unchanged.

    On the whole, the court went the way I’ve long argued Congress should have in the first place. Make the mandate part of a tax, not a penalty. I’m a little more surprised by the Medicaid decision, but as I’ll explain soon, I think it will be hard for states to not comply.

    Regardless, there is much work to do. I look forward to when we can focus on that.

    @aaronecarroll

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    • Isn’t it the job of Congress when they write and pass the bill to make it a tax, not of the court to interpret it as one after the fact? After Congress and the President specifically say it is not…

      • That’s semantics and politics, and (as I’ve said on this blog over and over again – go check) I couldn’t care less about it. If you’re upset about whether it’s called a “tax” or a “penalty” you need to go to a political blog and argue about it.

        The ACA needs a mechanism to avoid adverse selection and gaming. I couldn’t care less what they call it.

    • “The ACA needs a mechanism to avoid adverse selection and gaming.”

      So we pick the most gamed method of collection in existance?

      http://money.cnn.com/2012/01/06/news/economy/tax_gap/index.htm

      “Close to 15% of federal taxes — or $385 billion — went unpaid in 2006, according to new estimates by the IRS.

      That’s the net tax gap number — meaning what didn’t get paid even after the $65 billion the IRS managed to collect through audits.”

      As far as a $100 tax preventing adverse selection, present reality doesn’t support that at all. I have numberous clients that can’t get employees to sign up and they only charge them $10-$20 a month. Assuming a $100 penalty will get people to pay 9% of their income when they wont part with $120-$240 now is a stretch.

      I have one client now that was in a death spiral, no matter what they did they can’t get people to take the medical plan. The only way they can meet particiaption is to buy a $10,000 deductible plan for everyone, give it to them for free, then allow them to buy up. Unfortuntently this will be illegal come 2014 but that is another problem for another day.

      Under the current system if any of these people waived coverage they would be pre-ex and not covered. now they will be able to come on next enrollment menaing there is even less risk to gamiling the system.

      Roadmaps on how to game the system never result in fewer people gaming the system and higher taxes never result in higher compliance with taxes.

      There is a reason pre-ex and underwriting became the defacto norm in insurance, it was the most efficent and effective method of avoiding adverse selection and funding the system.

      • If adverse selection and gaming are the concern we should build on what we know works from the private system, 40+ years and trial and error.

        Develope prices for Medicaid, would suggest at least down to the Metro area. Community rating is fine but need atleast 4-5 times age band or you will run off all the young healthy.

        If you don’t have other coverage, we already report most of our population to CMS for MSP, IRS could take that data or screw us and have us report to IRS as well like a 1099, the cost of Medicaid is deducted from your tax return, no refund earned income credits or anything until it is paid.

        It is important that Medicaid stay cheap crappy coverage or to many people will just accept it and we’ll have another 100 trillion in unfunded liabilities.

        This solves the EMTALA problem as far as provders not getting paid. Truly solves the adverse selection problem. Prevents people from gaming the system as much. Still a problem of those that don’t pay taxes.