Reflex: November 9, 2011

Grace-Marie Turner says Obamacare is fatally flawed. “The 11th Circuit Court of Appeals, which ruled against the individual mandate in August, accurately described it as ‘toothless.’ The penalties—$695 a year or 2.5% of income once fully implemented in 2016—are too weak to induce people to sign up for insurance policies that the Congressional Budget Office estimates could cost $20,000 a year for a family of four.” Austin’s comment: Of course, if that’s the objection and the flaw, Congress (or the states if the mandate is struck down or repealed) could, in principle, change the penalty. The ACA penalty is, on average, higher than that in Massachusetts. Meanwhile, evidence in the state of an adverse selection problem, which is different than churning or failure to purchase insurance, is low. (H/t Steve Parente.)

The D.C. Court of Appeals upheld the legality of the Affordable Care Act, writes John Schwartz. Notably, the opinion was written by a prominent conservative jurist. Don’s comment: I am not a lawyer, gather that it seems nearly inevitable that the Supreme Court will accept a case to review the individual mandate, and expect that Kevin Outterson will write about this case at some point in TIE. As a health policy guy, I am baffled by the entire episode. In teaching intro to the U.S. health system this semester at Duke, how to teach the individual mandate has been a big challenge. In the past it was the favored approach of Conservatives; once adopted by the ACA, it became an affront to the Constitution, per the same Conservatives. 

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