I explained why I don’t think the individual mandate will work at a January speech to the Connecticut chapter of the Federalist Society. I included the text of those arguments in a blog post here:
Once you reach 133.01% of FPL, things stop being so clear. At that point your insurance cost is capped at 3% of your income – or .5% higher than the cost of the fine.
Eventually, at 300% of the FPL ($67,050 for a family of four), the amount of income allowed for insurance costs rises to 9.5% or almost four times as much as the fine.
I am not an expert on crime and punishment, but this doesn’t look like what we normally see. Think about insider trading or other white-collar crimes.
For example, imagine someone is convicted of embezzling $100,000 and fined $50,000 while keeping their ill-gotten gains. It just doesn’t make sense.
Crime shouldn’t pay, as they say.
The design of the mandate shows that not having insurance isn’t a crime – because you are not punished for violating this law. As I see it, you are inhibiting the efficiency of the welfare state so you have to pay more of its costs.