From a contributor at the Daily Dish:
I do not understand why Democrats don't embrace the newly defined "tax", saying: you bet we raised taxes, but not on the hard-working, responsible middle class. This is a tax on those deadbeats who don't pay for their own insurance but still expect care when they show up at emergency rooms. It's a tax, all right, and I think we should agree to raise it even higher so they have more of an incentive to buy their own damned insurance and leave the rest of us alone. Let the Republicans protect the rights of deadbeats; Democrats are fighting for people who play by the rules.This. This is exactly the right approach.
Matt, in the comments to the last post, asked a good question:
What is to stop people from paying a marginal penalty until they get a catastrophic disease, and then applying for insurance? This seems like rational behavior that will undercut the whole premise of "insurance". If I could buy car insurance with "pre-existing conditions" I'd never buy it until after I was in an accident.Fair question. As I understand it there are two factors that make people willing to sign up for insurance when they are still healthy. The first is simply risk aversion. If you get hit by the proverbial bus or have any unexpected medical emergency, you can't sign up for insurance that day, or retroactively. So the possibility of a financially crippling medical emergency looms if you are healthy and uninsured. In fact, I believe you can't sign up until the next open enrollment period, which I think is every six months. You could be on the hook for quite a bit of medical expense (or denial of care) as a result. This should be a powerful motivation.
The second motivation is that in most cases, people want insurance. Sure, there are some objectors, but by and large, people perceive healthcare insurance to be a desirable thing to have. So the penalty is an incentive to buy something you already want to have. Would you rather pay $1000 and get nothing, or pay some higher number and have the thing that you actually wanted? Of course this doesn't work absent the subsidies that make the insurance affordable for working families and the medicaid expansion.
The Massachusetts experience is that about 2% of people choose to pay the penalty, either because they are gaming the system, conscientious objectors, or in a particular financial hardship. If that number is replicated nationally, it's probably not enough to create a serious adverse selection death spiral.