Supporters of the president's unpopular health care mandate tax are now trying to justify it on the theory that those who go uninsured later impose large costs on the rest of us through emergency rooms. But the truth is emergency rooms are crowded not by the uninsured, but by Medicaid patients. Far from alleviating the problem, the president's law dumps millions of people into a failed Medicaid system. It's the opposite of reform.
The original purpose of the mandate was not to reduce the costs of uncompensated care, but rather to extract revenue from young, healthy people who go uninsured because they are low utilizers of health care. Legal expert Steven G. Bradbury summarized: "The individual mandate was originally enacted to compel millions of Americans to pay more for health insurance than they receive in benefits as a means to subsidize the costs that the Act's guaranteed-issue and community-rating requirements will impose on private insurance companies."
In other words, a free-rider problem was created by the law's requirement that insurance companies issue a policy to anyone, even after they are sick (guaranteed-issue), at the same premiums as healthy people (community rating). The significant purpose of the mandate was to force people who don't use health care to pay premiums to subsidize these new costs.
Democrats cut a corrupt deal with the insurance industry: the industry would accept expensive regulations in exchange for a mandate forcing millions of new customers to buy their product. That's why the insurance industry - contrary to popular political misconception - advertised heavily in favor of the law.
The newly created, after-the-fact argument that the mandate is about reducing emergency room "free riding" doesn't make sense. If you're uninsured, you're likely to go to the emergency room only in the event of a genuinely serious emergency that would justify paying the bill or facing bankruptcy.
That's not the case for Medicaid patients, whose bills are paid by taxpayers and who are unlikely to have better options than the emergency room because of how badly the program is failing.
Phil Kerpen is president of American Commitment, a columnist on Fox News Opinion, chairman of the Internet Freedom Coalition, and author of the 2011 book Democracy Denied.
American Commitment is dedicated to restoring and protecting America’s core commitment to free markets, economic growth, Constitutionally-limited government, property rights, and individual freedom.
Washingtonian magazine named Mr. Kerpen to their "Guest List" in 2008 and The Hill newspaper named Mr. Kerpen a "Top Grassroots Lobbyist" in 2011.
Mr. Kerpen's op-eds have run in newspapers across the country and he is a frequent radio and television commentator on economic growth issues.
Prior to joining American Commitment, Mr. Kerpen served as vice president for policy at Americans for Prosperity. Mr. Kerpen has also previously worked as an analyst and researcher for the Free Enterprise Fund, the Club for Growth, and the Cato Institute.
A native of Brooklyn, N.Y., Mr. Kerpen currently resides in Washington, D.C. with his wife Joanna and their daughter Lilly.
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