People who didn’t know the late Susan B. Waters or have the opportunity to hear her speak really missed out on one of the leading lights of the insurance...
The individual mandate, Obamacare's requirement that all Americans have health insurance that includes "minimum essential coverage," has been in effect for two weeks now. No one has noticed because nothing has happened. But it will.
The mandate is the heart of Obamacare; without it, supporters believe, the system won't work. So the Obama administration hopes millions of Americans will voluntarily comply with the mandate and purchase government-approved coverage. If they don't do it voluntarily, they'll be punished.
Starting next year, the government will collect a penalty -- the administration calls it a "shared responsibility payment" -- from Americans who don't go along with the Obamacare edict. The penalty starts small -- just $95 per adult and $47.50 per child this year -- but could conceivably reach thousands of dollars per family per year once the fee scale is fully in effect.
The threat of coercion lies behind the entire Obamacare scheme. The question for the coming year is, how coercive will the government be?
The Democrats who wrote the Affordable Care Act in 2009 gave the Internal Revenue Service power to collect Obamacare penalties. Many Americans are quite familiar with how coercive the IRS can be. Fearing public opposition to IRS threats, the law's authors forbade the IRS from bringing criminal charges or seizing houses and property from those who don't buy government-defined "minimum essential coverage." But Democrats still gave the IRS significant authority.
"Although the Act provides that the IRS may not use criminal prosecutions, notices of federal tax liens, or levies on property to collect an unpaid penalty, the IRS may employ offsets against federal tax refunds," the Obama administration wrote in its 2012 Supreme Court brief in defense of the mandate. "The IRS also may seek payment through correspondence or phone calls from IRS employees."
The main leverage the IRS will have is the refund "offset." That simply means if a taxpayer is due a refund, but has also incurred an Obamacare penalty, the penalty will be subtracted from the refund. So a taxpayer who has a $500 refund coming but incurs a $695 Obamacare penalty will receive no refund.
In addition, that taxpayer might face a letter and a phone call - - or a series of them -- from the IRS telling him to pay the rest. Anyone who has received a letter or phone call from the IRS knows the experience can be quite intimidating. Or, in the words of the administration's Supreme Court brief: "Offsets, correspondence, and phone calls are consistently some of the most productive tools in the federal tax collection process."
Will the government really do that? The answer is not clear, or at least not publicly clear. (In response to inquiries, IRS officials sent boilerplate, non-enlightening clips from IRS publications.) But the administration's level of aggressiveness will likely be determined by how many Americans voluntarily comply with the law.
Obamacare needs a lot of them to survive. In the last few months, discussion often focused on the prediction that the system needed to enroll seven million people by the time open enrollment is over at the end of March. But even if Obamacare reaches that goal -- and it's doubtful right now -- that is just the start. To work, Obamacare must keep growing. A lot.
"I think we're going to ultimately need about 20 million people for a sustainable pool," health care analyst Robert Laszewski told the Washington Post recently. "So when I hear people talk about the goal being seven million, I think, 'time out.' This needs to be 20 million people within three years."
How does it get there? Well, if Obamacare is a great deal that millions of Americans love, it will reach the goal with no problem. If, on the other hand, it presents Americans with policies that don't fit their needs, are too expensive, have cripplingly high deductibles, and narrow choices of doctors -- well, many Americans will balk at buying such a product.
It's not that they will reject health coverage; it's that they'll reject health coverage that's a bad deal.
And if that happens, the question of 2015 will be how far the Obama administration will go to force Americans to buy policies they don't want. "The government will be hard-pressed to collect a fine on something lots of people don't believe has value," says Laszewski. "This is when it will become a huge political albatross."
Such a scenario could create enormous political pressure to scrap the individual mandate. And at that point, the future of Obamacare would be very much in doubt.