How the Obamacare mandate can ruin Obamacare

By Tom Quiner

The Supreme Court said the Obamacare mandate is legal.

The ramifications are serious. Here’s why.

You are required by law to purchase health insurance or be fined. But the fines are far less than the price of the insurance. If you’re healthy, you may choose to forgo health insurance until you need it.

In other words, it makes more economic sense to wait and purchase health insurance when you get sick.

At that point, Obamacare forces the insurance company to cover you. Even more, Obamacare forces insurance companies to charge the same for sick people as healthy people. Once you’re well, you can simply drop your coverage until you get sick again.

Let us summarize the perverse economic incentives at play:

√ It is cheaper to NOT buy insurance if you’re healthy.

√ There’s no incentive to buy insurance UNTIL you get sick.

√ Insurance companies HAVE to cover you, even if you’re sick.

√ Insurance companies HAVE to charge the same premiums to people with terminal cancer as world-class triathlon champions who have never been sick a day in their life.

What will happen? Only sick people will have health insurance. To survive, health insurance companies will have to charge dramatically higher premiums to survive.

The Obamacare objective of lowering the cost of health insurance will have been turned on its head.

The risk of health insurance becoming totally unaffordable is very real, thanks to Obamacare.



  1. illero on November 15, 2012 at 3:50 pm

    So – if you take this to its logical long-term end – everybody only buying insurance to cover periods of sickness – premiums actually rise to the point where it becomes no insurance at all. Rather, it becomes essentially a pay-for-service-as-you-go system. No – worse than that – since insurance companies have to make a profit, it will actually cost more to buy that temporary insurance than to simply pay for the medical services directly.

    • quinersdiner on November 15, 2012 at 3:56 pm

      Well put. This is all a preliminary step to move toward a single payer system.