The Individual Mandate

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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One World welcomes the 5-4 ruling of the Supreme Court of the United States upholding Obamacare while leaving the health safety net open for further reform in the interest of the future of health care.

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
Preamble, US Constitution

America is waiting in baited breath for the Supremes to decide the fate of the signature achievement of this presidency: Obamacare.

At the end of a long string of noble intents to provide all Americans with affordable health care – Teddy care, LBJ’s Great Society care, and Hillarycare – finally Barack Obama mandated universal health care, legislation to put the onus on the consumer to buy health insurance and to create a market where that insurance can purportedly be affordably purchased by 2014, ideally, to eradicate both the unwillingness and the inability to be insured: Willingness to Pay (WTP) and Ability to Pay (ATP).

Insurance enables risk pooling and sharing.

The case before the United States Supreme Court was the constitutionality of the federal government requiring individual Americans to buy health insurance, akin to auto insurance, if they can afford in the private markets with or without employer subsidies, or if they cannot afford – in the government created health insurance exchanges, the insurance plans constrained by the legislation to leave no health care situation not covered notwithstanding the cost.

Obamacare has indeed achieved the medical ethic and the principle.  There is nothing unconstitutional about all Americans being required to remain healthy in the general welfare of our country, when suicidal tendencies are considered mental health problems under the law.

Affordability of our general welfare, however, is at issue, both for the nation and the citizen, the willingness of the citizen to remain healthy being a Hobson’s choice. Of what use is a mandate, as noble, ideal and pragmatic as it may be, if it is not within the economic reach of all?

The president claims that 2014 and after, as the nation’s economy grows, government obligations to pay for the enforcement of the law will not be oppressive on the budgets of either the federal government or the states, and the implementation of the law will intrinsically lower health care costs because of economies of scale created by the health insurance exchanges and investments – public and private – made in improving the process efficiency of dispensing health care, more generally known by the phrase ‘health innovations.’

Health care is a mandatory government expenditure. In particular, since Lyndon Baines Johnson (LBJ)’s Great Society programs, health care has grown as a share of the federal budget. Many estimates show that despite the president’s claims, by 2032 health care costs of the government will equal the entire federal budget of 2012.

LBJ-care must be reformed to create a necessary and fiscally viable health safety net. Obamacare does not do that. At least not yet.

It is important to note here that there is no cap on how high insurance costs can rise even if all 315 million Americans in a world of 7 billion people are required to be precautionary in their preventive and primary health because the cost of insurance is determined by the cost of health care provisioning – doctors and their education, support staff and their training, medicines and pharmaceutical research, and equipment for all types of health care.

The US market alone is insufficient in scale to provide the necessary economies of scale to make a universal health care mandate – within the current public-private market structure (defined as the equilibrium between health care supply and health care demand) of the health industry – universally affordable both for the government and the private citizen in a manner insulated from the vicissitudes of business cycles unlike welfare reform.

Obamacare must, therefore, be reformed further in its details by the United States Congress before it is fully implemented at a cost to the taxpayer in 2014, especially under the current economic duress, while adhering to the essential healthcare principles the current legislation is predicated upon.

Any future reform of Obamacare must solve the problem the current law had set out to solve: lowering health care costs for the government and the citizen to be able to afford universal health care.


About Chandrashekar (Chandra) Tamirisa
This entry was posted in Economics, Health Care, Supreme Court, Transformations LLC and tagged . Bookmark the permalink.

2 Responses to The Individual Mandate

  1. Reblogged this on One World and commented:

    One World welcomes the 5-4 ruling of the Supreme Court of the United States upholding Obamacare while leaving the health safety net open for further reform in the interest of the future of health care.

  2. 44m Barack Obama ‏@BarackObama
    President Obama: “I think there is one person to make these decisions on health care, and that is you.” http://OFA.BO/EgwcQG #ACA
    Expand Reply Retweet Favorite

    3s futurespace ‏@f_uturespace
    @BarackObama When health insurance price structure correlates to income structure, tax payers save about $1 trillion in yearly expenditures.
    Collapse Reply Delete Favorite

    (When the price structure of health insurance correlates to income structure, the government, except for regulating health care, is entirely out of the health care market, saving the tax payers about $1 trillion in federal budget mandatory expenditures every year.)

    8s futurespace ‏@f_uturespace
    @BarackObama The price structure of insurance must correlate to income structure.
    Hide conversation Reply Delete Favorite
    from New York, US
    10:55 PM – 8 Aug 12 via web · Details

    1m futurespace ‏@f_uturespace
    Cost shifting in health care must be built into the price structure of insurance, not taxes. Either @BarackObama understands it or does not.
    Hide conversation Reply Delete Favorite
    from New York, US
    10:54 PM – 8 Aug 12 via web · Details

    15m futurespace ‏@f_uturespace
    @BarackObama Raise health insurance premiums on the top 20% to lower them on the bottom 4 income quintiles progressively for same services.
    Hide conversation Reply Delete Favorite
    from New York, US
    9:49 PM – 8 Aug 12 via web · Details

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