Posted on 10/14/2009 5:26:43 AM PDT by Kaslin
Will a young, healthy, childless individual or couple buy health insurance costing 7.5 percent of their income as required by Obama's health legislation? Not until they get sick. Then, they can always buy the insurance -- and the Obama bill requires the insurance companies to give it to them. And, if the premiums come to more than 7.5 percent of their income because they are now sick, no problem. Obama will subsidize it.
Instead, young, healthy, childless people will likely opt to pay the $1,000 fine (a.k.a., slap on the wrist) mandated in the bill. After all, even if they make as little as $50,000 a year, the fine is a lot cheaper than 7.5 percent of their income (or $3,500 a year)!
So ... these young households will not contribute to the coffers of any health insurance company until they are sick and need the coverage. By then, their costs will come to vastly more than their premiums.
Who will subsidize the difference? We will.
The insurance industry estimates that the bill will drive up premiums for the average family by $1,700 a year. By the time the bill takes effect in 2013, it estimates that the average annual family health insurance premiums (now $12,300) will rise to $17,200 if the Obama bill is passed, but only to $15,500 if it is defeated.
And who do you think the voters will blame for the hike in their premium? The Democrats who passed the bill.
Supporters of the bill are quick to counter that greater efficiency, etc. will hold down premiums. But they have little to answer the argument that, without higher fines, the young and healthy will not consent to pay an arm and a leg for insurance they don't need.
Any lingering motivation to pay the premiums will disappear once the Obama bill requires insurance companies to cover them when they do, finally, limp in the door, desperately in need of insurance. Why pay now when you can always pay later? And, with a government subsidy, you gain nothing by paying for all those years when you don't need insurance.
So Obama's program turns out not to be one to spread insurance and thus spread the risk of costly illness, but one to make people pay 7.5 percent of their incomes once they get sick, with the government picking up their remaining premium and the health insurance customers paying for the medical expenses. Some deal!
So tote up the cost of this bill on the middle class:
-- $1,700 more in insurance premiums for the average family.
-- Medical devices like wheelchairs and hearing aids get taxed.
-- Those who are sick must pay an average of about $600 more a year in income taxes because the bill raises the threshold for deducting medical expenses from 7.5 percent of income to 10 percent.
-- A $404 billion cut in Medicare.
-- Ending the subsidized Medicare Advantage insurance for costs over and above Medicare. Without Medicare Advantage, the elderly can only augment Medicare by buying Medigap coverage for which no subsidy is available and whose premiums are higher (offered, conveniently enough, by Obama's buddies at the AARP).
-- No importation of Canadian medicines and no competitive bidding to hold down prescription drug costs (Obama's deal to get Pharma's support and advertising dollars).
-- A shortage of medical personnel and equipment as 30 million new patients are added without any expansion of the population of doctors and nurses. This shortage will make rationing inevitable, even if it shortens life expectancies among the elderly.
And, all of this assumes that the House bill, which imposes a 4.5 percent payroll tax (which will discourage new employment), does not pass -- and that the cost estimates of this program prove realistic. Despite the Congressional Budget Office's concurrence, one can't help noticing that Massachusetts' program was estimated to cost $200 million in 2005 and now costs $700 million!
This health care bill is, indeed, Obama's first tax on the middle class.
“Supporters of the bill are quick to counter that greater efficiency, etc. will hold down premiums”
Since when has “government involvement” and “efficiency” EVER been a pair?
“And who do you think the voters will blame for the hike in their premium? The Democrats who passed the bill.”
....no they won’t...this guy is still stuck in the 80s....there’s been a sea change with the make up of the electorate since then....people like you and me might blame the the Democrats but that they don’t care...they know they can get the votes they need to stay in power from the inner cities.
I don’t want government run health care, but the warning that with this plan, the cost of health insurance will go up $1700/year per family is not exactly a convincing argument.
Our health insurance (Blue Cross) is going UP $1200/year already.
Too many people are getting health care at reduced or no cost (Medicare and Medicaid) and that’s driving the cost up for everybody who pays their own way.
DH is almost old enough for Medicare, but I have quite a few years to go yet for that. I’m healthy (PTL) so I would definitely consider foregoing insurance and paying the fine. Our income has taken a big dive with the failed economy and health insurance is a big bite right off the top of our income as we pay for it ourselves.
I heard on the tube last evening that health insurance will be subsidized for those making less than 66K...is that true?
If it is, there is an article in Forbes that covers this phenonomen: why work for more money when the net effect is you actually “earn” less when you take into consideration the benefit programs you are denied access to because you are an achiever.
A good example: a local radio talk news show asked its listeners last week, beginning at 7AM whether they thought OZero deserved to win the Nobel. Until about 9AM, it was almost 100% negative. That began to change around 9AM and the negative calls declined quite a bit. Why? IMO, up till 9 or so, most people who work were on their way to work, that’s why. No need for the bums to get up early.
Vince
Yep, my United Healthcare went up $100 in 2009 and is scheduled to go up another $115 in 2010.
I still can't afford "free" health care.
You have just explained communism.
Exactly. Do the math. If your health insurance costs $12K-$15K a year, you'd have to earn that much in excess of $66K just to break even. So why not just cap your earnings below $66K and take the subsidy? You bet we would. Our house and cars are paid off and we have no debt, so we could get by on $66K, unless inflation goes through the roof.
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