• Secretary Sebelius has the authority to delay the individual mandate

    If website woes necessitate a delay, no congressional authorization is required. Want the details? Of course you do! Go read them in the new Bloomberg column by Nick Bagley and me.


    • Two wise men, Bagley and Frakt, the perfect combination of resourceful lawyer and thoughtful economist. I’ve come around to the Obama view: we don’t need a mandate; for those with short memories, Obama opposed the mandate during the 2008 campaign. Would a poor person reject thousands of dollars in subsidies for the security of having health insurance because there’s no “penalty” if he doesn’t buy the insurance? Would a rational person? That’s what this is about: what is the necessary inducement to get those who are young, healthy, and have lower income to buy insurance. The problems with the federal exchange are mostly attributable to two factors: the resistance of thirty something states to create their own exchanges and the decision of the administration not to adopt federal (uniform) standards for health insurance. Eventually, most every state will create an exchange and eventually the administration, but not this administration, will be able to adopt federal standards (I say eventually because the adverse selection, death spiral dilemma will have disappeared with all those young and healthy insureds). In the meantime, rational behavior will induce enough young and healthy people to buy insurance so that the mandate won’t be necessary. And once we have federal (uniform) standards, insurers won’t be able to game the system by offering a long list of plans with only marginal differences – managing risk they would call it.

      • I don’t agree that rational young people will always be insured. I’ve known many well-educated, intelligent people who’ve gone without insurance for periods of time. It’s always viewed as temporary. And it’s a bet that they won’t get sick in the time it takes them to get a new job where they can afford insurance.

        Add in guaranteed issue, and that’s a better bet. If you’re uninsured and you get lupus or cancer, you can sign up for insurance. Particularly if you add in a window between insurance. Lose your old insurance and you have 3 months to sign up for Obamacare. Well, that means you’re assured that if you get sick, you can get insurance, making skipping insurance and better bet.

    • NIck
      Can a state with a functioning state-based exchange preempt any federal rule making and still require its own individual mandate?

      If subsidies flow, and folks can access the plans, I would think the state would withstand any legal challenge.

      Presumably though, any legal challenge, and I am sure they will come, will have little standing one the HIX functions on a national level. I would think in a year or so, worst case scenario.