The Affordable Care Act (ACA) was sold as legislation that would guarantee every American enjoyed health insurance. Anybody who looked at the methodology would be lead to question the sales pitch though. What the ACA did was require anybody who didn’t have health insurance to pay a fine. As the New York Times has noticed many people are opting to pay the fine rather than health insurance premiums because the former is cheaper:
Mr. Murphy, an engineer in Sulphur Springs, Tex., estimates that under the Affordable Care Act, he will face a penalty of $1,800 for going uninsured in 2016. But in his view, paying that penalty is worth it if he can avoid buying an insurance policy that costs $2,900 or more. All he has to do is stay healthy.
“I don’t see the logic behind that, and I’m just not going to do it,” said Mr. Murphy, 45, who became uninsured in April after leaving a job with health benefits to pursue contract work. “The fine is still going to be cheaper.”
Two years after the Affordable Care Act began requiring most Americans to have health insurance, 10.5 million who are eligible to buy coverage through the law’s new insurance exchanges were still uninsured this fall, according to the Obama administration.
It seems many people are mistaking this for an unintended failure when in fact it was the plan. The ACA, like all legislation, was passed to transfer wealth from the people to the State. The health insurance industry is one of the State’s larger partners. By requiring people to do business with insurance companies the ACA funnels money into the health insurance industry where a portion of it is funneled back to the State (in the form of taxes, lobbying efforts, regulatory compliance fees, etc.).
But some people are too poor to afford health insurance or too stubborn to buy it even when it’s mandated. In order to squeeze money out of those two categories of people the ACA also created a middle tier. You don’t have to buy health insurance but you also won’t be kidnapped and locked in a cage if you’re willing to pay the State a small fee directly. The trick is the fee is lower than buying health insurance but high enough to look favorable compared to being kidnapped and locked in a cage.
Manufacturers have long understood the importance of a middle tier. Apple, for example, prefers you buy the top of the line iPhone but makes lower tiers available because it realizes not everybody can afford or is willing to pay for the top of the line. The difference between the market’s middle tier products and the State’s is the former’s lower tier doesn’t involved armed officers kicking down your door at oh dark thirty, murdering your family dog, and kidnapping you.
So the ACA creates a three tier system. The upper tier is buying health insurance, the middle tier is paying the fine, and the lower tier is being a slave laborer for Federal Prison Industries (also known as UNICOR) for a number of years. It’s a piece of legislation designed specifically for the purpose of extracting more wealth from the public. What may appear to be a failure, the fine being lower than buying health insurance, is in fact part of the design meant to maximum the law’s effectiveness.