Thursday, October 15, 2009

Gaming the Health Care System

David Freddoso of the The Washington Examiner explains how to game the system under the Baucus bill.
As John Lott points out, Baucus's bill forbids insurers from turning you down because of your pre-existing conditions. That means effectively that you're always insured -- whether you pay premiums or not. If you don't mind paying for the occasional emergency, you could simply drop your health insurance, saving thousands of dollars annually, and pay the statutory penalty instead. If you happen to get cancer or get pregnant, you can just buy insurance after it happens.

The penalty under Baucus's bill is low, and it even phases in gradually over the first five years -- $0 in 2013, $200 in 2014, and on up to $750 in 2017 and thereafter.

This is why insurance companies, while supportive of President Obama's efforts generally, are upset about the Baucus bill. They have no problem with state compulsion so long as it works to their benefit, but Baucus's bill would probably increase the number of uninsured Americans by providing obvious financial incentives to game the system.
Who knew? Maybe this really can bring down health care costs for lots of individuals.


OregonGuy said...

As the recession deepens, as more people lose their jobs, more people will be faced with stopping their health insurance payments. This is especially difficult when you have children.

Thankfully, mine are grown.

Small businesses will be looking at the increased costs of their employees, and we take quite a whammy in Oregon. Higher business taxes, higher health care costs under Obamacare, increased energy costs to to Cap & Trade, and don't forget, we proudly have an $8.40 per hour minimum wage rate.

If you have one or two emloyees, get rid of them. The liabilities and costs are simply too high.

If you've a big company, you're going to look to relocate. Find anyplace where the costs and liabilities are lower.

Oregon will not be on the top of anyones' list.

Will I game the system? Sure. We all game the system.

Plan and plan and plan, and then find out people tend to do pretty much whatever it is they want to do.

Scary, innit?

T. D. said...

Well thought out as usual, OG.

As with every other government requirement, the problem is not the individual or business choosing the best legal option. The problem is with lawmakers who try to force people to do something which is against the individual's or business's good.

I don't blame people who use all available options in reducing their tax burden (or any other government requirement). Nor will I for people who find the best way out of this new government burden.

I do find it hypocritical when Hollywood and political elites sneer at those who are upset with higher taxes and yet do everything they can to shelter their own big buck earnings and lifestyles.