The House Democrats have released their health-reform bill and, as expected, it is pretty far to the left. It raises taxes, imposes both individual and employer mandates, and creates a government-run health-care plan. This is not surprising, as the House Leadership’s strategy appears to be to pass a bill that is as far to the left as possible in order to have maximum leverage when negotiating with whatever compromise comes out of the Senate.
My friend Keith Hennessey takes a good look at the impact that the individual mandate would have on those not eligible for subsidies under the House Democrats’ approach. These people would be faced with the choice of purchasing insurance or paying an income tax penalty. Keith looks at an individual making about $50,000 and a couple making $90,000 and finds that they would likely have to pay higher taxes because of the penalty and still not have health insurance. After writing this, one of Keith’s helpful readers pointed out that Senator Obama used to make this argument as well. In a debate against Senator Clinton, who was in favor of a mandate during the 2008 campaign, Senator Obama argued that the result of the purchase or pay individual mandate in Massachusetts was that “In some cases, there are people who are paying fines and still can’t afford it, so now they’re worse off than they were. They don’t have health insurance and they’re paying a fine.” I hope that the president still holds this view.