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Comment by importantbrian | Hacker News Reader

The part I don't like about ACA is the mandate. I really don't think the government should be mandating people purchase a product from a private company. There is a simple solution to this though. Just expand Medicare and make everyone in the country eligible for it. No one is forced to participate in Medicare, but if you delay your enrollment you have to pay penalties when you join. This is a simple way to handle the healthy people won't join until they need it problem. Most people will join to avoid paying the penalties. Medicare is one of the most popular government programs. I don't understand how this isn't being talked about as a solution.

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It is being talked about, and has been talked about for years. But the reality is that to expand Medicare, you need around 65 Democratic Senators, a comfortable Democratic majority in the House, and a Democratic President.

The problem is that we mandate that hospitals treat the indigent.

Without a mandate for everyone to carry insurance, we have one industry footing the bill for what should really be paid by the government.

Instead, the indigent have insurance (in theory), and they can get healthcare other than at the emergency room, hopefully at lower cost.

The alternative is to end the mandate for hospitals to treat everyone.

That was one of the arguments for the ACA. Hospital emergency rooms are a very expensive way to treat minor problems, and an very ineffective way to treat chronic ones. This is why each homeless person in SF costs the medical system about $10K a year.

Prior to 1986, hospitals were not required to treat the uninsured, but most nonprofit hospitals did anyway.[1] For-profit hospitals tried to dump them on nonprofit and charity institutions. The 1986 law makes all hospitals that take any Federal funding treat uninsured people with emergency conditions.

[1] https://en.wikipedia.org/wiki/Emergency_Medical_Treatment_an...

Or have a public option...

A public option is just a mandate by another name, it has to be paid for by higher taxes: still a mandate. But yes, we should do it that way.

Yes, taxes would go up, but would most people really notice? You are basically shifting from paying a premium to a private insurer to paying a tax to the government. It's kinda six one half dozen the other.

Thank joe Lieberman (a democrat) for why we don't.

Lieberman was an independent, though he caucused with the democrats.

Yes, but not always. He opposed the government option. Quoting the article [0]:

> ... "if the bill remains what it is now, I will not be able to support a cloture motion before final passage." In other words, Lieberman will support a filibuster. "I can't see a way in which I could vote for cloture on any bill that contained a creation of a government-operated-run insurance company," Lieberman said.

[0] http://www.slate.com/articles/news_and_politics/prescription...

It's not a mandate, it's a tax incentive. I'm not forced to buy a house, but if I choose not to have a mortgage, then I forgo the federal tax benefits. If you accept that the mortgage deduction is within the scope of the government's powers, then I am not really sure I see the difference. Am I missing something?

As an aside, I agree that Medicare expansion would have been a better policy. Good luck getting that through congress, though.

Do you get fined for not buying a house??

Because you do get fined for not buying health insurance.

We can argue the semantics of the word 'mandate' all day, but your analogy is upside down.

Yes, tax rates are arbitrary so not qualifying for an exemption is mathematically equivalent to being fined. It's just presented in the reverse.

You are being fined for not paying mortgage interest. You are being fined for each kid you don't have. Buy your house and have your kids or you will continue paying more in taxes!

Where can I apply for an exemption to the not owning a house penalty?

Suppose Person A lives in a house with a mortgage, and Person B lives in an apartment with a lease. Suppose -- it's unlikely, but for sake of the hypothetical -- Person A's monthly mortgage and Person B's monthly rent payment are the same dollar amount and their gross annual income is the same.

Person B -- the renter -- will pay more income tax, because Person B does not get to deduct mortgage interest while Person A does.

In much the same way, if Person A carries insurance all year and Person B doesn't, Person B will pay more income tax.

So yes, you do get "fined" for not buying a house. We just spin it as "encouraging the dream of home ownership" instead of as a "fine", a "penalty", as "the government holding a gun to your head and forcing you to buy a house", etc.

How would a renter feel if their rent increased because their landlord was unable to take a mortgage deduction? In other words, is the deduction implicitly distributed pro-rata to the supporting renters via market force?

In the US, the home mortgage interest deduction does not apply to rental properties. To qualify for the deduction, you either have to use the home as your residence for a minimum period each year, or rent only part of it (and meet requirements for renting part of the home: you can't have more than two tenants, and the part of the home they live in can't have its own separate kitchen or toilet facilities).

But that's the home deduction. Apartment buildings, for example, are investment property for which mortgage interest is a deductible expense. https://www.irs.gov/publications/p527/ch01.html

Then you concede that taking away the home mortgage interest deduction (making the homeowner-who-resides-in-the-owned-home and the renter equal for tax purposes) would not drive up rents, and your original comment was at worst wrong and at best a non sequitur.

I'm positing false equivalence. Taking away the home mortgage interest deduction would make the homeowner and renter unequal. Doing so would not drive up rents, just as eliminating the mortgage deduction on investment property wouldn't impact house prices.

You said:

How would a renter feel if their rent increased because their landlord was unable to take a mortgage deduction?

I countered that the home mortgage interest deduction doesn't apply to rental properties. Renters and homeowners are thus currently unequal from a tax standpoint, since renters effectively pay a higher tax rate than homeowners. Removing the deduction would thus not create a new inequality; it would remedy an existing one.

The home mortgage interest deduction specifically doesn't, but mortgage interest on rental properties is still generally deductible.

https://www.irs.gov/publications/p527/ch01.html

I wholeheartedly disagree.

If I choose to live rent-free in my parents' basement, I will not get fined for doing so. I keep ALL of my cash. But I'll STILL get fined for having not buying myself insurance.

I'm not sure what logical fallacy you're throwing here, some form of "Denying the antecedent" or something along those lines, but it's not the same situation.

In both cases, A does something and B does not, and the result is B pays more income tax than A despite A and B having equal income.

Why people insist the two cases are conceptually different (i.e., that one and only one of them is a "fine" for not doing the thing), I do not know.

I don't think the issue is purely semantic. The government provides a financial incentive to buy houses. I can decide whether I want to be $x richer and have a mortgage to pay. I can similarly decide if I want to be $y richer and have a health insurance plan.

I don't mean this as a rhetorical question, so I apologize if it comes across as snide, but from the point of view of economics, what is the difference? I'm trying to understand why one kind of tax incentive is objectionable and not the other.

There is a huge difference between a fine and not receiving an incentive.

If I have $1000 in my pocket right now, I will still have $1000 in my pocket if I choose not to go after an incentive.

But if I have $1000 in my pocket right now, I will not have $1000 in my pocket even if I choose not to buy any health insurance.

In my eyes, being punished for peacefully doing absolutely nothing is as anti-American as it comes. That's another argument, but my point is that the analogy is off the mark.

> Do you get fined for not buying a house??

There is a tax penalty for not having a home mortgage, so it's mandatory in exactly the same sense that health insurance under the ACA is.

How is it a tax PENALTY?

You have to spend money on interest to have a portion of that reduced in taxes. It's not a penalty.

It's not a 'tax penalty'. You're keeping more of your money by not paying interest, and pay normal taxes on those. It's not a penalty.

That's really bizarre (although unfortunately, common) thinking.

Just because you don't understand the difference between a penalty and an incentive doesn't make your analogy suddenly correct.

There's an incentive for having a home mortgage under certain conditions only, and you do not owe anyone additional money if you have no outstanding mortgages on properties.

The same is not true for the ACA. You are fined for not owning something - e.g. if your net worth was $0, you could go into the negative for not having insurance.

If you don't own a mortgage, you cannot be fined into the negative.

> Just because you don't understand the difference between a penalty and an incentive doesn't make your analogy suddenly correct.

There is no difference between a tax penalty and a tax incentive (more precisely, a tax incentive is exactly identical to a general tax cut plus a tax penalty for everyone who doesn't qualify for the incentive, and a tax penalty is equivalent to a general tax increase plus a tax incentive for everyone not subject to the penalty; so, except as concerns the general level of taxation, penalties are exactly the same as incentives.)

> If you don't own a mortgage, you cannot be fined into the negative

Since having a mortgage or not can make the difference between owing net income taxes or not, if you have $0 net worth before a particular year's taxes are considered, you absolutely can be "fined into the negative" for not paying interest on a mortgage (lenders, not borrowers, own mortgages.)

Not to go off on a tangent, but I actually don't agree with the mortgage deduction either. I don't think the government should be using the tax code to try and incentivize or disincentivize behavior. The congress has shown itself to be monumentally incompetent in choosing what behavior should and should not be rewarded. The mortgage tax deduction being one. We found out the hard way during the mortgage crisis that not everyone should be incentivized to own a home, and even now it continues to survive.

The mortgage interest deduction is in fact federal spending, as it is a subsidy.

The healthcare mandate is a tax. What many people object to here is that most taxes tax an activity (making money, buying things, owning things, etc.), such that one does not HAVE to do any of those things, but if one CHOOSES to, they become subject to the tax. Here on the other-hand they are being TAXED for NOT doing something.

Using your analogy, the healthcare mandate is the same as taxing people for not owning a home.

Yes and I do think more needs to be done to incentivize people to live healthier. It's one thing for all of us to cover the costs of others for congenital defects and accidents outside their control. It's another thing entirely if they cannot be bothered to exercise at all, eat even remotely healthy, or smoke cigarettes (I think you do in fact get charged a higher premium in a separate pool in some/all? states if you're a smoker; but smoking mitigation is not subject to any co-pay fees or deductible it's 100% covered including some reasonable number of psych eval) or engage in very risky activities. This can't be a life guarantee for the old either. After a certain age, you kinda need to stop looking for problems or you gonna find something and it's pointless to do anything but manage quality of life rather than remaining quantity.

I don't understand how this isn't being talked about as a solution.

It is being talked about but there is significant opposition from those that don't want to raises taxes to the level that would be required to finance such a proposal.

It could end up being a cost savings overall, or at the very least be cost neutral. Most people are paying for health insurance now anyway. If that shifts from a premium paid to your insurer to a tax payed to the government is that really a big deal?

Yes, the federal government taking over 15-20% of the economy would be a big deal.

The mandate -- i.e., forcing healthy people to carry insurance -- is the only way to make the risk balance out. Otherwise, no insurer would stay in the individual market.

One problem on top of the getting it passed part..

Many doctors don't take Medicare. Over a situation where say there are 3 doctors for a specialty in a town... the two better ones do not take it, and the new less good one will take it. So if that flat answer is let everyone take medicare, I think there are some serious quality of care problems.

(I have no better solution though, every angle seems bad).

They would immediately start taking Medicare when nearly all available patients moved to it. They can only afford to not take it now because other customers are available.

This. Plus that's not really different than the situation now. Not every doctor takes my employer offered plan either.

If we hit a point where nearly all people were on Medicare, we'd be bankrupt anyway.

But continuing with your theoretical environment: no, they would consider adding new patients until they had a critical mass and then stop accepting new patients.

> If we hit a point where nearly all people were on Medicare, we'd be bankrupt anyway.

No we wouldn't, we'd be in a much better position and we'd be paying much less for healthcare. Medicare has far less overhead than private insurance and it'd be the logical move to establish a far more effective and cheaper system of socialized medicine.

It's been talked about extensively, but there wasn't enough political will to push it through in 2010, and—as others have pointed out—it would take a comfortable Democratic supermajority in the Senate and House, and a Democratic President to make this happen.

More context: http://www.chicagotribune.com/news/opinion/letters/ct-this-i...

Or, why not just go to a full single-payer system? This would basically be medicare for everyone, but you get rid of the insurance companies which add no value to the system but consume massive amounts of it's resources.

> This would basically be medicare for everyone

Except that Medicare more like ACA with a public default option than true single payer.

Because Republicans hate Medicare too and want to privatize it as their compromise? If they didn't have to compromise, they'd destroy it along with Social Security. But they know full well they'd pay too high a political price, so that's why their policy is to make government programs suck as much as possible so they can keep up the government blame game.

What happens when someone puts it off their whole life and doesn't have money when they need to enroll?

Is that a different case than someone putting off enrolling in health insurance today, with or without the ACA?

I think that's on you. The purpose of the government is not to protect you from making monumentally bad life choices. If the government doesn't bail those people out then that will just strengthen the incentive to sign up when you become eligible.

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