My colleague Phil Klein made the following case for attaching higher taxes to a repeal of the individual mandate:
Obama knows that the mandate is politically unpopular – which is why he opposed it during the 2008 campaign — but he also knows it’s an essential component of his vision for universal health care, which is why he reversed himself as president and his legal team is furiously defending it in court as essential to the law.
If the mandate fell, it would unravel the insurance regulations, most notably, the requirement that insurers cover those with pre-existing conditions. … There’s no way that Obama would put his biggest accomplishment at risk, so I can’t see this deal actually happening.
I guess I just don’t see how repealing the mandate would “unravel the insurance regulations” and put Obama’s “biggest accomplishment at risk.”
As Phil notes, Obama never even really liked the mandate. That is one reason why the actual mandate in the legislation is so weak. Repealing it would make health insurance marginally more expensive … but so does everything else in Obamacare from guaranteed issue (insurance companies must ensure all comers) to community rating (insurance companies must charge everyone similar rates).
Everything about Obamacare is simply unsustainable: the CLASS Act, the Medicaid expansion, the and shrinking Medicaid and Medicare reimbursement rates, the rising taxes on health insurance plans, the health insurance exchange subsidies, etc.
Obama knows this. That is why he has repeatedly said Obamacare is not perfect and will need future reforms. He has always be open to tinkering with it.
But Obama also knows that Obamacare will do nothing to control health care costs and, therefore, higher taxes will be needed to pay for it. That is why a mandate-tax trigger is such a bad idea: it allows Obama to kill two birds with one stone: he gets both higher taxes and gets rid of the most unpopular part of Obamacare, the mandate.
But the core of Obamacare (the Medicaid expansion and the new health insurance subsidy entitlement) would remain perfectly intact ... and with higher taxes to pay for it to boot.