With dire reports of the
Health economists Nicholas Bagley and Austin Frakt say no. But they do have a workable plan for saving Obamacare from the website's meltdown. Here's the best news: It doesn't require action by Congress.
The proposal is not to delay the mandate but to waive the penalty for going without coverage, which hits people who don't have insurance by next April 1. The law sets the penalty for 2014 at $95 per person or 1% of household income, whichever is greater. (It rises in subsequent years to $695 per person, or 2.5% of household income in 2016, and thereafter by the rate of inflation.)
Bagley, of the University of Michigan, and Frakt, of the
Some technicalities would need to be addressed, Bagley and Frakt say. The law requires that individual hardship exemptions be granted to people once they apply for coverage, and since the website is what's preventing people from applying, some workaround is needed. But they say the law grants HHS Secretary
The penalty waiver is a better option than delaying the individual mandate, which is a much further-reaching change in the law's requirements. In states where the sign-up process is going well, the penalty would remain in force. That would moderate an important downside of deferring the penalty, which is that it would encourage younger and healthier individuals to defer coverage. That in turn risks saddling insurance companies with the dreaded adverse selection--a profusion of sicker, older, and relatively more costly policy holders, driving up premiums--which is what the Affordable Care Act is designed to avoid.
Whether the Bagley/Frakt option will be necessary is unclear. President
The botched rollout threatens to overshadow the Affordable Care Act's real virtues, which include remaking the standards of health insurance to remove exclusions for preexisting conditions and increases in premiums for people who get sick. If temporarily waiving the individual penalty takes the heat off the system in these first months of implementation, that may be the way to go.