# Would it be OK for local governments to penalize residents for not buying health insurance? **URL:** \ **Category:** Great Debates\ **Created:** [October 16, 2010, 3:00am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314 "2010-10-16T03:00:15Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [October 17, 2010, 3:38am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/21 "2010-10-17T03:38:11Z")
> [@jtgain](#): > > > [@Grumman](#): > > > > c) Compulsary car insurance is insurance for harm to _other people_. Obamacare is more like if you were required to buy insurance for damage to _your own_ car. > > True enough. But do you believe that it would be unconstitutional for a state government to require full coverage auto insurance? Forget whether or not is is unwise. Would it be against any provision of the Constitution? You do realize that there is a difference between what states can do and what the federal government can do, right? States can do plenty that would be considered unconstitutional for the federal government to do. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [October 17, 2010, 3:43am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/22 "2010-10-17T03:43:16Z")
> [@Fear\_Itself](#): > > If I am hospitalized, I will default of the bill because I have no insurance, and your premiums and costs go up to cover my bill. > > Pay me now, or pay me later. But you will pay me. In a few cases, sure. But you’re ignoring two things 1. Before you default, your assets will all be lost - most people will not _want_ this outcome and will try to avoid it. That’s what catastrophic insurance is for. 2. There are many \*rich \*old people. There’s a reasonable case for subsidizing poor old people, but there’s no reason young people should be subsidizing rich old people. And as your statement points out, we’d be subsidizing poor old people in a system mandatory insurance. So ironically, you proved that lack of a mandate works - it already accomplishes all the subsidies that are morally defensible. It just happens to avoid a whole bunch of distorted incentives and unjustifiable subsidies. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [October 17, 2010, 3:46am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/23 "2010-10-17T03:46:30Z")
> [@foolsguinea](#): > > I keep seeing this bizarre argument that the PPACA (“Obamacare”) is unconstitutional because Congress doesn’t have the authority to make individuals buy a given product. > > I’m bewildered at the thinking here: > > 1a) PPACA massively expands Medicaid eligibility, so those who can’t afford health insurance should be able to get it from the government. > 1b) Why the hell would anyone who can afford health insurance not want it? when people like me were calling for single-payer, the middle class were all, “but private health insurance is so _cheap_ (by middle-class standards). Everyone should just buy that!” Is there some large contingent of middle-class people who want to just be put down like lame horses if they ever get ill? > > Is this at all about being forced to buy insurance, or something else? > > 1. When we bring up that states require car insurance for drivers, then two arguments get thrown around: > a) Well, the law doesn’t make you buy a car. (I live in small-town central US. _Reality_ makes people buy cars.) > b) Congress supposedly doesn’t have the right to pass laws except in very specific limited domains, because of the Tenth Amendment. State governments are supposed to be sovereign. > > So, then, would it be OK for the state or city government to demand you buy health insurance? Would that be hunky-dory with you? If so, why? Of course states can demand that you buy health insurance. Luckily we, as residents, have the ability to leave a state whose laws we do not like and live in another state. Why even compare state requirements to federal requirements? Claiming that states can require auto insurance does not argue for the ability for the feds to require anything. You are comparing apples and oranges. ---
**Author:** ![InterestedObserver](https://avatars.discourse-cdn.com/v4/letter/i/838e76/32.png) [@InterestedObserver](https://boards.straightdope.com/u/InterestedObserver)\ **Post date:** [October 17, 2010, 4:50am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/24 "2010-10-17T04:50:09Z")
A crucial point is being overlooked. There is, in fact, NO mandate that individuals purchase or otherwise obtain health insurance. Such a federal requirement MIGHT, in fact, prove unconstitutional. But, like the “death panels”, no such provision exists in the legislation as passed. As written, those who DO acquire health insurance would receive tax benefits to offset the cost. Those who do not would be assesed tax penalties (“fines”). Such an approach is no more unconstitutional than the REST of the tax code, in which exemptions and rates are tied to certain conditions (parenthood, marital status, home ownership, income level, investments, etc…) Hey, the government is not FORCING you to buy a home when it allows for tax breaks for those who do, or MANDATING that you pop out a few kids when they dangle that carrot of exemptions. Nor are they PUNISHING you in an unconstitutional manner by taxing you at a higher rate for filing single, say. The very idea that those who crafted and passed and signed this legislation into law (many of them lawyers, including President Obama, a Constitutional SCHOLAR for cripe’s sake:smack:) would somehow screw up so badly as to overlook some glaring, sure to be struck down unconstitutional element…:rolleyes: The move on the part of (mostly Republican) Attorney Generals to challenge the constitutionality of this legislation is nothing more than a cheap (actually very costly, to the taxpayers) political ploy. They know damned good and well it is perfectly constitutional, being lawyers themselves. ---
**Author:** ![hansel](https://avatars.discourse-cdn.com/v4/letter/h/6bbea6/32.png) [@hansel](https://boards.straightdope.com/u/hansel)\ **Post date:** [October 17, 2010, 6:26am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/25 "2010-10-17T06:26:53Z")
> [@Grumman](#): > > > [@hansel](#): > > > > If overcharging them now and discounting them later leads to lower lifetime costs both personally and society wide, who’s being stupid? > > Cite? > > And just to clarify, I mean the “Pay your dues” bullshit of overcharging young people so that you can discount for old people. As pretty much every country with UHC demonstrates, charging everyone and covering everyone costs about half as much, and leads to longer life expectancies. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [October 17, 2010, 7:38am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/26 "2010-10-17T07:38:49Z")
> [@hansel](#): > > > [@Grumman](#): > > > > Cite? > > > > And just to clarify, I mean the “Pay your dues” bullshit of overcharging young people so that you can discount for old people. > > As pretty much every country with UHC demonstrates, charging everyone and covering everyone costs about half as much, and leads to longer life expectancies. _facepalm_ Just to clarify _again_ because you apparently didn’t get it the first time, the post you replied to was explicitly about the practice of treating young people’s insurance as a source of money with which to subsidise older people’s insurance. A non-cite that says “UHC is good” has nothing to do with that question. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 17, 2010, 11:49am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/27 "2010-10-17T11:49:22Z")
> [@InterestedObserver](#): > > A crucial point is being overlooked. There is, in fact, NO mandate that individuals purchase or otherwise obtain health insurance. Such a federal requirement MIGHT, in fact, prove unconstitutional. > > But, like the “death panels”, no such provision exists in the legislation as passed. > > As written, those who DO acquire health insurance would receive tax benefits to offset the cost. Those who do not would be assesed tax penalties (“fines”). > > Such an approach is no more unconstitutional than the REST of the tax code, in which exemptions and rates are tied to certain conditions (parenthood, marital status, home ownership, income level, investments, etc..) > > Hey, the government is not FORCING you to buy a home when it allows for tax breaks for those who do, or MANDATING that you pop out a few kids when they dangle that carrot of exemptions. Nor are they PUNISHING you in an unconstitutional manner by taxing you at a higher rate for filing single, say. Can you quote the part of the legislation that calls the penalty a tax? > [@](#): > > The very idea that those who crafted and passed and signed this legislation into law (many of them lawyers, including President Obama, a Constitutional SCHOLAR for cripe’s sake:smack:) would somehow screw up so badly as to overlook some glaring, sure to be struck down unconstitutional element…:rolleyes: John Roberts is also a Constitutional SCHOLAR. Do you think he has the same ideas of what the constitution means that Obama does? Whose ideas matter more? ---
**Author:** ![Mr\_Smashy](https://avatars.discourse-cdn.com/v4/letter/m/2bfe46/32.png) [@Mr\_Smashy](https://boards.straightdope.com/u/Mr_Smashy)\ **Post date:** [October 17, 2010, 3:43pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/28 "2010-10-17T15:43:02Z")
> [@foolsguinea](#): > > Mr Smashy, I don’t think the federal rights/state rights distinction has meant a damn thing since the 14th Amendment. Correct me if I’m wrong on this. If we were talking about citizenship, due process, or equal protection, then you’d be right. We’re not. Consider yourself corrected. ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [October 17, 2010, 4:26pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/29 "2010-10-17T16:26:09Z")
> [@Grumman](#): > > > [@hansel](#): > > > > If overcharging them now and discounting them later leads to lower lifetime costs both personally and society wide, who’s being stupid? > > Cite? > > And just to clarify, I mean the “Pay your dues” bullshit of overcharging young people so that you can discount for old people. Think of it as overcharging _yourself_ in the present so you don’t have to pay as much in the future. It’s no different from pro-rating a heating bill. You know you’re going to pay a lot more in the winter, so you can either pay the costs as they occur (mot much now, and a lot later), or average it out over time (same amount every payment). This has the appearance that you’re overpaying in the summer, but then you underpay in the winter. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 17, 2010, 5:56pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/30 "2010-10-17T17:56:19Z")
> [@Sunspace](#): > > > [@Grumman](#): > > > > Cite? > > > > And just to clarify, I mean the “Pay your dues” bullshit of overcharging young people so that you can discount for old people. > > Think of it as overcharging _yourself_ in the present so you don’t have to pay as much in the future. It’s no different from pro-rating a heating bill. You know you’re going to pay a lot more in the winter, so you can either pay the costs as they occur (mot much now, and a lot later), or average it out over time (same amount every payment). This has the appearance that you’re overpaying in the summer, but then you underpay in the winter. That makes a lot of sense since older people typically have more money than younger people. Overcharge me when I have less money, but make it up to me undercharging me when I have more money. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [October 17, 2010, 8:16pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/31 "2010-10-17T20:16:13Z")
And why is it a worthy effort to coerce people into making an intertemporal transfer to themselves? (As **John Mace** points out, it’s not just a transfer but a crappy one at that.) ---
**Author:** ![carm](https://avatars.discourse-cdn.com/v4/letter/c/c2a13f/32.png) [@carm](https://boards.straightdope.com/u/carm)\ **Post date:** [October 17, 2010, 10:24pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/32 "2010-10-17T22:24:40Z")
> [@John\_Mace](#): > > > [@Sunspace](#): > > > > Think of it as overcharging _yourself_ in the present so you don’t have to pay as much in the future. It’s no different from pro-rating a heating bill. You know you’re going to pay a lot more in the winter, so you can either pay the costs as they occur (mot much now, and a lot later), or average it out over time (same amount every payment). This has the appearance that you’re overpaying in the summer, but then you underpay in the winter. > > That makes a lot of sense since older people typically have more money than younger people. Overcharge me when I have less money, but make it up to me undercharging me when I have more money. Young people have much more earning potential though. I imagine being retired and faced with ever-increasing medical bills is a pretty daunting prospect; much better to have the bulk of it paid already. Also, what about poor old people? If they can’t pay, then society has to either let them die or cover the cost for them. May as well take it from them when they are actually _earning_ money rather than when they’re retired, and paying out of a dwindling savings account. Not to mention that it’s cheaper for everyone this way. . . ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 17, 2010, 10:31pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/33 "2010-10-17T22:31:11Z")
> [@carm](#): > > > [@John\_Mace](#): > > > > That makes a lot of sense since older people typically have more money than younger people. Overcharge me when I have less money, but make it up to me undercharging me when I have more money. > > Young people have much more earning potential though. I imagine being retired and faced with ever-increasing medical bills is a pretty daunting prospect; much better to have the bulk of it paid already. > > Also, what about poor old people? If they can’t pay, then society has to either let them die or cover the cost for them. May as well take it from them when they are actually _earning_ money rather than when they’re retired, and paying out of a dwindling savings account. > Not to mention that it’s cheaper for everyone this way. . . We’re talking about people in the aggregate. Obviously, individual circumstances will vary. But trying to reason your way out of the current situation by saying younger people are getting a deal that they will appreciate 30 years hence isn’t much of an argument. Fact is, it is extremely tempting for young people to not have health insurance. Charging them more to make up for others isn’t a good way to fight that temptation. ---
**Author:** ![Blalron](https://avatars.discourse-cdn.com/v4/letter/b/35a633/32.png) [@Blalron](https://boards.straightdope.com/u/Blalron)\ **Post date:** [October 17, 2010, 10:49pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/34 "2010-10-17T22:49:10Z")
> [@athelas](#): > > And why is it a worthy effort to coerce people into making an intertemporal transfer to themselves? (As **John Mace** points out, it’s not just a transfer but a crappy one at that.) You and I have very different ideas of what constitutes coercion. The 2.5% penalty for not being insured is pretty damned weak, especially considering what insurance actually costs on average (considering that health care takes up 17% of our GDP). Even though 18-30 year olds have less actuarial risk than older adults, they still have _some_ risk that they, in the aggregate, are shouldering on others by refusing to be insured. 2.5% is a reasonable price to pay for this risk. As far as “intertemporal transfers”, there’s already precedent for that: Medicare and Social Security. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 17, 2010, 11:37pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/35 "2010-10-17T23:37:44Z")
> [@](#): > > Fact is, it is extremely tempting for young people to not have health insurance. Which is exactly why the mandate is necessary, since it’s necessary for young folks to pay for the system to work. If you don’t like it, then we could go to a different system, such as single-payer. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [October 17, 2010, 11:44pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/36 "2010-10-17T23:44:17Z")
> [@yorick73](#): > > You do realize that there is a difference between what states can do and what the federal government can do, right? States can do plenty that would be considered unconstitutional for the federal government to do. **Name one thing.** > [@badlyburnttoast](#): > > I really, really hate the ‘individual mandate’ but I can’t think of a better solution. It’s a bad situation all around with no easy answers. Wow, I can. Index the cost of insurance as a fixed percentage of income, as the Germans do. > [@athelas](#): > > It’s not gaming the system, it’s refusing to buy a service that isn’t providing value for them. Young people have no obligation to subsidize the healthcare of the old. So you agree that Medicare & Social Security should be abolished ASAP? > [@athelas](#): > > 1. Before you default, your assets will all be lost - most people will not _want_ this outcome and will try to avoid it. That’s what catastrophic insurance is for. > > 2. There are many \*rich \*old people. There’s a reasonable case for subsidizing poor old people, but there’s no reason young people should be subsidizing rich old people. And as your statement points out, we’d be subsidizing poor old people in a system mandatory insurance. So ironically, you proved that lack of a mandate works - it already accomplishes all the subsidies that are morally defensible. It just happens to avoid a whole bunch of distorted incentives and unjustifiable subsidies. I assume it’s still the case that young, healthy people pay less for health insurance on the individual market. Actuarial data & all that. I get the impression athelas wants to outlaw actuarial insurance–as well as Social Security. Wow, living in the First World must just be hell. :rolleyes: ---
**Author:** ![Notchimine](https://avatars.discourse-cdn.com/v4/letter/n/bcef8e/32.png) [@Notchimine](https://boards.straightdope.com/u/Notchimine)\ **Post date:** [October 17, 2010, 11:45pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/37 "2010-10-17T23:45:55Z")
> [@foolsguinea](#): > > 1b) Why the hell would anyone who can afford health insurance not want it? who want to just be put down like lame horses if they ever get ill? Being in the biz I will say that MANY people that can afford health insurance do not get it. They’d rather get the new car or the nice vacation and not pay the money for a risk they think of as slight. So many of these people are outraged at the “greed” of the clinicians who are unwilling to perform a procedure with a handshake and a promise to pay as soon as possible. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [October 17, 2010, 11:54pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/38 "2010-10-17T23:54:35Z")
> [@foolsguinea](#): > > > [@yorick73](#): > > > > You do realize that there is a difference between what states can do and what the federal government can do, right? States can do plenty that would be considered unconstitutional for the federal government to do. > > \*\*Name one thing. Please tell me you are kidding. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [October 17, 2010, 11:57pm UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/39 "2010-10-17T23:57:48Z")
> [@foolsguinea](#): > > I assume it’s still the case that young, healthy people pay less for health insurance on the individual market. Actuarial data & all that. I get the impression athelas wants to outlaw actuarial insurance–as well as Social Security. Wow, living in the First World must just be hell. :rolleyes: Outlawing things is a strawman of your invention. I say, let the consumer decide whether it’s worth buying health insurance or not, as we do in almost all the economy. You’re saying that the consumer has no right to decide - that the answer must always be “yes.” (I see a general tendency of leftists to think that they can sit back with the back of an envelope and decide what the “right” price for something is, and then force prices to adhere to their estimates. This is wrong for the same reason that Soviet-style central planning failed - the market [has more information](http://en.wikipedia.org/wiki/Spontaneous_order#Markets) than even the cleverest and best-informed central planner. Russians are not known for being crappy mathematicians, yet they failed miserably at dictating “fair” market prices.) > [@](#): > > You and I have very different ideas of what constitutes coercion. The 2.5% penalty for not being insured is pretty damned weak, especially considering what insurance actually costs on average (considering that health care takes up 17% of our GDP). A weak step in the wrong direction is still a step in the wrong direction. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 18, 2010, 12:13am UTC](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314/40 "2010-10-18T00:13:11Z")
> [@Chronos](#): > > > [@](#): > > > > Fact is, it is extremely tempting for young people to not have health insurance. > > Which is exactly why the mandate is necessary, since it’s necessary for young folks to pay for the system to work. If you don’t like it, then we could go to a different system, such as single-payer. That’s really out of the realm of the discussion I was having. But since you bring it up, there are other systems besides single payer, including the one we had previous to the HCR bill passed. No mandate required for that system to work. [Previous page](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314.md?page=1) [Next page](https://boards.straightdope.com/t/would-it-be-ok-for-local-governments-to-penalize-residents-for-not-buying-health-insurance/557314.md?page=3)