Financing the Health Care Reform Plan

One of the main problems as I see it is this, as illustrated here by a question I asked in a separate thread:

Due to the way the bill is being financed (reliance upon people ‘buying in’ but only offering punitive punishment by way of no tax deduction (where for 90% (just a rough estimate)) people would be making a poor financial decision to buy into the plan until such time that they need it.

People making $50,000/yr would be paying in the neighborhood of $4-5/yr for health insurance, whereas the ‘non tax break’ you get attached punitively is far less. Why would people pay for something that gives them no benefit until, of course, such time that they need dire health care?

So, ultimately less money coming in (by way of less people buying into the program) and more money going out…

What does this scenario do to the overall financing of the bill?

Not knowing when you will need money is precisely the purpose of insurance. What part of that idea is unclear?

The problem isn’t that people are being forced to pay for insurance, it’s that insurance companies generally charge by the month or year or whatever, but the amount of money needed by a person per month/year when they are 65 is six to ten times greater than when they are 25. Insurance really needs to be based on how much you have paid in to-date, rather than how much your current plan is worth. We need to pay in far more than we expect to need all through middle age or we’ve got a system that is going to suddenly massively hiccup when everyone hits 60 and their plan that they’ve signed up for–that’s always been perfectly reasonable–isn’t nearly good enough for their needs, at the same time as they are retiring from work. Perhaps plans do actually plan ahead in their accounting (and I’m simply making a fool of myself), but I fear they don’t.

That is the entire point though.
IF people don’t pay in early (as the tax is supposed to be that incentive) but we are offering the health care to more and more people (the poor), how is the cost going to be what they say it will be?

As it stands now, it would be a poor financial decision to ‘buy in’ early if you are middle class and in general good health. (I suspect this number is pretty big)

WHich is why Obama and so decided the answer was to enslave Americans, forcing them to buy thigns they don’t want. Grand idea!


[Obvious Retort]
I guess GWB enslaved all our grandchildren by forcing them to pay for the Iraq War that they won’t have any choice but to pay for, since GWB borrowed the entire cost of the war.
[/Obvious Retort]

The point of the Obvious Retort isn’t so much to dump on GWB, no matter how much he deserves it, as to make the point that anytime a government spends money without the unanimous consent of the taxpayers who’ll foot the bill, it would constitute ‘slavery’ by such bullshit definitions.

So if you don’t want to be a slave, you might should take up permanent residence in a boat on the high seas.

What do you mean, “Buying into the program?” You mean buying health insurance from private companies? That’s a strange way to phrase it.

If people do not go out and get their own private insurance through the exchanges (as subsidized by tax credits), then people will pay more in penalties. Not as many people will be covered, and the risk for health insurance writ large will be slightly higher than projected, meaning that the cost of health insurance will be slightly greater than projected.

However, if more people are paying penalties, they are not getting tax credits. That means more revenues and less government expenditures, meaning that the government will end up “making” more money, assuming that it is generally healthy people who choose to pay the penalties (and get nothing for that money!) rather than buying health insurance and getting something for their money.

I’m not sure I get you. Is your complaint that the penalty is not big enough, or is it the concept of the penalty or being forced to pay at all?

Let’s say that you don’t force people to pay until it is in their financial interest to do so, and further let’s say that the government won’t make up the difference. They go along fine, until they get old, when the fact that everyone in the country wants to take out of the system more than they put in. The system then goes bankrupt, and pays nobody, the person gets clobbered by high doctors bills without insurance, and goes bankrupt, and eventually without money from elsewhere the system refuses to treat the person and he dies.

Now, if he was really smart, he’d save that money to pay for bills later - but self insurance with a risk pool of size one is incredibly inefficient, since he would need to save enough money to ensure that he doesn’t go broke 90% of the time, say, and so winds up not using that money for more productive things. Plus he has the risk of needing the money before he has the chance to save it. That on the average he comes out behind doesn’t mean that there aren’t cases where a young person is really glad he has insurance.

As for the amount of the penalty, I assume it was set by a combination of statistics and politics.

If they are going to have a penalty at all (if they are going to use it punitively, like they are) then it needs to be equal or greater to what they would be paying for health insurance, no? Otherwise, it is an unwise decision to make until such time that those paying the tax need health insurance (that costs more than they’d pay out of pocket for the insurance itself).

My main problem is this bill ‘expects’ those without insurance to go out and get it (softening the drain of current resources). In my opinion, they won’t because it’d be poor financial planning, especially since they can get it at ANY time with no adverse consequence (since they cannot be denied)

Also, don’t forget that the government will be paying a premium in poor people’s insurance (those that could not afford it before, now can). Increased government costs, not enough gain.

So you are saying the penalty is not big enough. Fair enough, though remember the penalty should not be the cost of insurance, but more or less the cost less the benefits insurance would have paid. Even young people should get checkups every so often.
I don’t consider the penalty punitive, but just an alternate source of revenue for the system. I wouldn’t consider someone choosing to pay the penalty instead of buying insurance as doing anything wrong.

The decline in the deficit forecast indicates to me that this is getting paid for by other revenue sources in the bill. Since poor people get healthcare anyhow, though the cost is buried in higher rates for others, this just makes some existing costs more visible. I suspect clinics are a lot cheaper than ERs, so it might save money also, but that isn’t a fundamental issue.

I’m beginning to think that ye lefty ones don’t have a clue what’s in it. At all. And are now reflexively edefending it even though it actually doesn’t really give you what you want and at a massive cost, at that.

I’m talking about the Individual Mandate, genius. Which, if allowed to stand, will functionally be the end of human freedom in America. If the government can require to you buy insurance, whether you want it or not, you are no longer a citizen but functionally a subject. If allowed to stand, then Congress is our King and God and nothing in the Bill of Rights will matter a tinker’s damn.

It has gotten to the point where the government, in Washington, can now arrest you for growing pot and using it yourself, in your own home, on the grounds that this is “interstate commerce.” It may have gotten to the point where Congress can perhaps now decide not what they willl tax you, but what you will buy and when and how you will buy it, for your personal use, inside your own state lines.

And, as with all such things, in a decade or so this will all be the fault of the dreaded Conservatives.

Oh well. There’s always Policide.

I am not sure that making it illegal to deny insurance for a pre-existing condition includes denying for a current condition.

So, let’s say you decide to pay the penalty and some months later you are in an accident and need knee surgery immediately or will walk with a limp the rest of your life. I do not think you can, at that point, just walk out and get insurance to pay for the knee surgery. You can go get insurance but are still stuck with the knee-surgery bill which will be substantial. Since it is not critical surgery you cannot expect the hospital to just give you one and suck up the cost on their own.

Want to take that chance?

For Emergency medical services you’d be right I suppose but I don’t see them denying that you twisted a bad knee playing basketball (it just so happens to be the same knee you tore up in college and never had fixed), if the doc says you need surgery to fix THIS issue (even though it’s the same issue as 7 yrs ago…) my guess is, you get that surgery and it is paid for under insurance.
Now expand that to Cancer and the multitude of other non-life threatening diseases you ‘suddenly’ contract.

All in all though, I guess we will have to wait and see what shakes out.

Even if only people needing emergency medical services get stung that a chance worth taking?

That’s literally the silliest thing I’ve read all day.

Think of it this way. The government has increased taxes on everyone in the amount of the mandate penalty.
Anyone who has health insurance gets a tax credit equal to the mandate penalty.

Does that quell the chicken-little-histrionics?

What changed? People take that chance all the time, currently. The only BIG difference is that NOW they will be able to go get last minute insurance to cover it.

And here was I thinking that ever since I started working in this fine country, the government had required me to purchase unemployment insurance from them. And it didn’t even give me an option to pick and choose between different unemployment insurance plans based on my own personal needs.

If that didn’t make me functionally a subject, what is it about this that will make me functionally a subject?

Or if that did make me functionally a subject, hasn’t the ship sailed as it is really not possible for something to make a subject into a subject, functionally or indeed any other way.

Not only that, my employer has to buy me insurance from the private market, or face a far more severe tax penalty then the one in the Health Care Reform law.

Let’s not turn this into whether or not the bill is a good plan, constitutional basis or any other argument that doesn’t center on the question asked in the OP, please.

The horror. I bet when you get home tonight they will be trying to quarter soldiers in your home, without your consent.

I think if you have no insurance and get into an accident you will be provided service and then the hospital will do its level best to extract every penny they can out of you.

I do not think you can go get insurance after the fact to pay for your $35,000 emergency room visit from the car accident you were just in. Bill collectors will be knocking on your door for that and no insurance will pay after-the-fact.