Health Care Bill to Insure More People Encourages More People to Not be Insured

Economist Arnold Kling lays out the simple incentive argument for expecting the health care bill to lead to more, not fewer, uninsured Americans in the health care market:

As of now, a rational individual would not choose to obtain health insurance, and a rational new business would not offer health insurance. In both cases, that is because the legislation has made it illegal for health insurers to discriminate against people on the basis of health status. So the cost of obtaining health insurance while you are healthy will stay high--in fact, market forces should send it higher--while the cost of remaining uninsured has dropped dramatically.

Is it time to bet that there will be more Americans uninsured two years from now than there are today? Or will the law produce results that are consistent with intentions, regardless of incentives?

Some interesting stuff in the comments thread complicating the analysis, including conflicting reports on what effect, in the real world, being insured has on the base price that gets charged for medical services.

Comments

[Almanian]

STUUUUUUUUUUUUUUUUUUUUUUUUUUUUUPAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAK!

[Forrest Gump]

Stupid is as Stupak does.

[Nick]

I'm healthy but I don't dare drop my insurance right now assuming I'll be able to get on a plan whenever I want. I never underestimate the government to fuck me. I'm not about to start now.

[Would u like a straw to grasp]

"So the cost of obtaining health insurance while you are healthy will stay high--in fact, market forces should send it higher--while the cost of remaining uninsured has dropped dramatically." Completely ignores the reality of rates when you show up at a doctors or hospital without insurance.

[John Thacker]

And you completely ignore the last sentence of the post here, and the discussion in the comments, straw-grasper.

But I suppose you enjoy wallowing in ignorance.

[Would u like a straw to grasp]

I read it and can't believe anyone would print this piece of shit. I have an idea for the next topic at Reason: HCR will make men grow tits.

[PM770]

drink?

[John Thacker]

Then you would see people arguing that point back and forth in a reasonable manner. But you prefer grasping at straws, as your nickname implies.

[Would u like a straw to grasp]

John, my nickname is a reflection of the lack of substance in the story. Reasonable is not a pre-requisite of posting on Reason. Otherwise, my ass would have been thrown out of here long ago;-)

[You would be]

greatly missed.

[D E Materialization]

I've been checking for unusual energy patterns around here; meanwhile, I am going to clothe myself;-)

[Nice one;]

Very clever 🙂

[D E Materialization]

Speaking of clever, how? Remember,I'm incognito

[Thank you!]

I finally got a compliment:-) I spotted a diamond in the rough.

[D E Materialization]

You already know you're clever; therefore, I'm just a second opinion.

[One that]

matters.

[D E Materialization]

chimera

[Thanks]

noted 🙁

[ignis fatuus]

smile or else

[Ad libitum]

🙂

[ignis fatuus]

following your posts and making observations.

[John Thacker]

And the last comment in the post, and the comment in the link post, discussed the very substance you're complaining about.

So all I can see is that you're complaining about your own lack of reading comprehension, or complaining that Brian didn't excerpt the entire post plus comments. Sounds like a personal problem to me, Straw.

[yonemoto]

you know the least you could do is spell "you" correctly.

[MRK]

Since you cannot be denied for pre-existing conditions, its perfectly rational, and better use of your money, to pay the fine for not having insurance until you need it. Then buy yourself insurance as soon as you get sick. Drop the insurance again when you get better.

[Suki]

'And those insurance better not be charging expensive rates either!'

Should bring heart surgery down to the price of a good rack of ribs 😉

[West Coaster]

The reality of (lower) rates when one offers to pay in cash, thereby allowing the medical provider to *not* have to fill out all of the insurance forms, etc.?

[ChrisH]

What's your experience been? I've seen some "buyers club" effect of health insurance, where the cost is capped by the insurer. I've also seen places that expect people paying out of pocket, and they discount. I believe Walmart's clinics are (relatively!) cheap and don't do insurance.

I suspect there will be more "cash only" service for (what I suspect will be) the increasing number of scofflaws. David Friedman was curious (some months ago -- before HCR passed) whether the market might produce pure "buyers clubs" that negotiate rates but don't pay them.

[R C Dean]

Completely ignores the reality of rates when you show up at a doctors or hospital without insurance.

Way to miss the point, would u.

The point being that, for health people, the incentive structure will be* drastically skewed toward being uninsured.

And, for people who get sick, they aren't going to make more than a handful of visits to the doctor before their new insurance cuts in and picks up the tab.

Even for that first visit, while you are waiting for your no-preexisting-conditions policy to clear, you are a cash customer, and thus able to negotiate some pretty decent rates. Trust me - I work for a large physician clinic they give very nice discounts for customers who actually pay cash.

*in 2014, of course, when the new rules go into effect

[Would u like a straw to grasp]

"The point being that, for health people, the incentive structure will be* drastically skewed toward being uninsured." Reason #1 why they are mandating insurance for everyone.

"And, for people who get sick, they aren't going to make more than a handful of visits to the doctor before their new insurance cuts in and picks up the tab." Does not apply to hospital emergencies and seriously ill people.
Cash discounts do not always work. Some physicians are contractually unable to accommodate.

[prolefeed]

Cash discounts do not always work. Some physicians are contractually unable to accommodate.

Then one would not do business with those physicians, yeah?

I call bullshit, though. Whoever holds the contract is gonna be willing to negotiate to get a cash paying patient who won't force them to incur all the paperwork costs insurance companies make them do.

Somewhere, there is a real person in charge of administering those contracts, and one of their higher-ups will be rational and have the authority to negotiate changes.

I speak from experience -- when I was an underwriter, I WAS the one who had the authority to make those change, subject to having to kick big enough decisions upstairs for review and approval.

[Would u like a straw to grasp]

You don't always have a choice of physicians. Yes it is true, not bullshit. "I was an underwriter", when?

[prolefeed]

"I was an underwriter", when?

Late 80s to mid 90s. I could dust off my resume to give my exact date, but if you still think I'm BSing you about my work experience after reading my comments, then nothing I say would convince you.

[prolefeed]

You don't always have a choice of physicians.

Really? They drag in chains to a doctor's office and force medical procedures upon you without your consent?

It may be more expensive to go to the provider of your choice than you want to pay, especially if your insurance doesn't cover that provider, but we're not yet at the point Canada has reached where it is illegal to seek private care outside the national health plan.

[Would u like a straw to grasp]

"Late 80s to mid 90s" Whoa pony, rules change and so does business practices. You don't need to dust anything off. Providers on plans and limited specialists are factors in lack of choice.

[Andrew D]

Unless you're the PM, of course. Then you can come to the US for surgery because you don't want to screw around with your own health.

[Accidentally on Purpose]

The acronym PM denotes Prime Minister. The jackass you specified is one of the Canadian Provincial Premiers.

[R C Dean]

Does not apply to hospital emergencies and seriously ill people.

Why doesn't it apply to seriously ill people? No more pre-existing conditions, remember?

And, running the numbers, it is still more rational to forego insurance and take the bet that you won't end up in the emergency room.

[Would u like a straw to grasp]

Rc, if you don't have insurance, you pay. Wtf, do you need this is legal language?

[NAL]

Yes, you pay, but the fine is much lower than the cost of insurance, hence it's financially smart to not buy insurance until you need it (and they can't reject you when you need it).

[Would u like a straw to grasp]

Nal, think it through. You will pay the fine and....and....and...the medical costs you incurred.

[domoarrigato]

why? are you sure youve thought it through? if you get seriously sick, you can call up the government hotline, buy the government option from the exchange and same day walk into a hostpital and get treated while insured. what part of this aren't you getting?

[Would u like a straw to grasp]

and those that are transported unconscious can send telekinetic messages to the government hotline. The bonus is that they don't have to wait. Genius!

[groylent scene]

For the year where you get sick. But, for all the other years, you are saving the difference between the fine and the cost of premiums. Overall, it might be worth it to go without insurance. If nothing else, it might seem like a pretty good idea when you're young and struggling.

[Ronnie Gipper]

"Reason #1 why they are mandating insurance for everyone."

Yes, but the fine for not carrying insurance will likely be less than the price of insurance, especially as more people figure this out and dump their insurance. That's the point of this story, and a very simple fact of economics. The Big Fucking Deal incentivizes dropping insurance and picking it up on an as-needed basis. Hence, more people are likely to be uninsured.

[Would u like a straw to grasp]

Ronnie Gipper, You blew it. Now they know the top secret libertarian plan. Give back your secret decoder ring!

[prolefeed]

If they're good at negotiating, an uninsured person can obtain the same prices an insurer extracts from hospitals and doctors.

But, yes, if you suck at negotiating, the base rates charged tend to be WAY higher than the prices insurers get.

[Would u like a straw to grasp]

WAY higher that leads to bankruptcy/financial ruin

[prolefeed]

The probability of you running up charges that lead to bankruptcy for any given person in any given year are pretty slim.

But, yes, rational people with lots of financial resources they could lose would want insurance to avoid that happening.

Someone worried about getting kicked out on the street for not paying their rent would rationally have more urgent priorities for their money than buying health insurance. Immediate, guaranteed ruin takes precedence over a small probability of ruin at a later date.

[Would u like a straw to grasp]

"But, yes, rational people with lots of financial resources they could lose would want insurance to avoid that happening." Prolofeed,this scenario would apply to anyone who holds a mortgage. Hospitals already know who can and cannot pay and redistribute the costs accordingly.

[Hazel Meade]

Hospitals already know who can and cannot pay and redistribute the costs accordingly.

So do car dealers.
If the dealer looks are your credit report and gathers that you can afford to pay more, he's going to try to drive the price up.

Also ... you act like physicians voluntarily charging richer people more and giving discounts to poorer people is some sort of horrible failing of the market, which forces the government to intervene, to ... give discounts to poor people.

WTF?

[Would u like a straw to grasp]

Hazel, I think rates should be published on the internet and the AMA should lose control of coding. I don't think rich people should have to pay a more, nor the middle class.

[John Thacker]

I think rates should be published on the internet and the AMA should lose control of coding.

Oh good, I think most of us here feel that the AMA has too much power as well. Glad to know we've found some common ground.

[prolefeed]

I believe Straw is advocating taking power from the AMA and giving it to the federal government, which doesn't strike me as being common ground material.

[John Thacker]

Well, let's ask Straw.

Hey Straw, would you be okay with the government legalizing medical transactions between consenting adults, in order to break the power of the AMA and encourage prices to be posted online?

[prolefeed]

Straw -- that's because you're a statist fuck.

No offense.

[SkepticalTexan]

For once, I agree with the straw man.

[Would u like a straw to grasp]

We don't need the AMA. They no longer serve a useful purpose.

[John Thacker]

We don't need the AMA. They no longer serve a useful purpose.

So you are against licensing doctors and only letting those who have graduated from accredited medical schools practice? Because that's what the AMA does.

We'll make a libertarian out of you yet, straw. That, or you'll go on being ignorant and contradicting yourself, either way's cool.

[Would u like a straw to grasp]

"We'll make a libertarian out of you"
I'd rather weigh the same as a duck

[Would u like a straw to grasp]

Staw mam, Texan

[Hazel Meade]

Doctors aren't generally greedy assholes. Most of them are willing to accomodate you if you're in financial trouble. Some will do basically pro-bono work. It's a good thing we don't have a physician shortage like Canada.

[Would u like a straw to grasp]

"Doctors aren't generally greedy assholes." Hazel, you amuse me:-)

[prolefeed]

"Doctors aren't generally greedy assholes." Hazel, you amuse me:-)

I know doctors, Straw. I'm married to one, and know the local physician community very well.

You don't know what the fuck you're talking about.

And, "it's not from the benevolence of the butcher and baker" etc."

[ChrisH]

good thing we don't have a physician shortage like Canada

Patience, patience, my dear.

[John Thacker]

Some will do basically pro-bono work.

Pro bono health care for the elderly massively declined after Medicare came in. Once the government makes it its job, people stop doing private charity.

[political operative]

Probably more psychology to it than that -- if someone appeals to your sense of pity, and you believe the sob story and are altruistic, you might lower your price or eliminate it (or at least only try to recoup your costs).

Whereas if someone (say, Medicare) just acts as though they're engaging in normal trade with you, but makes an insultingly low offer, you're emotionally inclined to punish them by refusing to trade at all. Unfortunate that the fallout is on the people Medicare represents instead of the agency itself.

[Hazel Meade]

Good point. You see doctors refusing to take medicare patients entirely these days. Whereas before, they might do the operation for free or at a steep discount if the patient couldn't afford it.

[?]

Completely ignores the reality of rates when you show up at a doctors or hospital without insurance.

That information isn't available until well after you showed up, so it doesn't matter.

Try asking a doctor how much something costs before he does it to you. They'll have no fucking idea, and they'll put the secret "wackjob" mark on your chart.

[Hazel Meade]

As well he should considering most patients have no fucking reason to know how much anything costs, since someone else is paying for it.

[Would u like a straw to grasp]

"That information isn't available until well after you showed up, so it doesn't matter."

http://www.dailyfinance.com/st.....d/1510279/

What does it say on your chart bitch?

[ChrisH]

Hey cowboy, if that's how you talk to women, you're gonna have a hard time getting any to grasp your straw.

[Would u like a straw to grasp]

Don't have one

[ChrisH]

Oh, so sorry, Mr. Bobbit.

[Would u like a straw to grasp]

She still doesn't have a fan club. Great business idea. Thanks.

[Hazel Meade]

Wow ... uninsured people getting cheap, pre-negotiated rates for surgery.

CLEARLY this proves that uninsured people are exploited and the government must step in to pre-negotiate their rates for them.

[jj]

Great SITE for documentaries check it out, knowledge is power

http://freeviewdocumentaries.com

[The Gobbler]

I love the documentary of you getting ass-raped by a bunch of butch dyke bikers with three-foot strap-ons.

[De Mocrat]

a rational individual

I have no idea what you mean by these words.

But can't you just feel the love in the bill!

[Suki]

It's all about the love and the caring.

[ChrisH]

Question for the great legal minds here at HnR (hang on... I just snorted coffee out my nose...) -- OK: Is the No Denying For Pre-Existing Conditions rule in effect right now? If not, when does that kick in? Is there a penalty before 2014?

I'm planning my future insurance purchases -- or lack thereof.

It sounds like the Dems assumed that everyone would just play nice. Turns out, I'm not nice. And, I'm not playing.

[kinnath]

You get to buy insurance or pay a fine for several years before the no-pre-existing-conditions protection kicks in.

There are many site provide detailed analysis of the new law of the land. Just look a little.

[ChrisH]

I find that most of the info currently posted is along the lines of "here's what the wonderful health care bill is supposed to work" and very little of "here's how to game the system" -- which is what I'm interested in.

If you could give links to "many site provide detailed analysis" that would be much appreciated.

[SkepticalTexan]

Well, they aren't all about the wonderfulness of HCR. There are also articles about how the bill failed to incorporate the pre-existing conditions ban for children until 2014.

[Would u like a straw to grasp]

SkepticalTexan,

WITHIN THE FIRST YEAR OF ENACTMENT

*Insurance companies will be barred from dropping people from coverage when they get sick. Lifetime coverage limits will be eliminated and annual limits are to be restricted.

*Insurers will be barred from excluding children for coverage because of pre-existing conditions.

[John Thacker]

That was intended, but they wrote it wrong. They'll have to fix it.

[Would u like a straw to grasp]

cite please

[Would u like a straw to grasp]

http://www.reuters.com/article.....KD20100319

[Would u like a straw to grasp]

Crap. http://www.reuters.com
Factbox: Healthcare bill would provide immediate benefits
Fri Mar 19, 2010

[aliasm]

http://finance.yahoo.com/news/.....0&.v=1

Gap in health care law's protection for children

[Would u like a straw to grasp]

"Late Tuesday, the administration said Health and Human Services Secretary Kathleen Sebelius would try to resolve the situation by issuing new regulations. The Obama administration interprets the law to mean that kids can't be denied coverage, as the president has said repeatedly.
'To ensure that there is no ambiguity on this point, the secretary of HHS is preparing to issue regulations next month making it clear that the term 'pre-existing exclusion' applies to both a child's access to a plan and his or her benefits once he or she is in the plan for all plans newly sold in this country six months from today,' HHS spokesman Nick Papas said." Sounds like they are fixing this issue.

[Hank]

Per the comments at econlog:

I agree with Joey Donuts. Three years ago I was visiting my brother. He had just had a very throrough check up (with insurance). We are close in age and I thought I better do the same considering family members dropping like flies. I hadn't any insurance. He paid a healthy $400 a month for his crappy policy. I paid less for the exam: office visit, blood work, ekg, etc.

People who are "comfortable" not having insurance for whatever reason: super rich, super poor, don't give a shit, young and invincible, will not get insurance. They will pay the fine.

Then when Goldman Sachs shorts the insurance companies in 7 years, President Pelosi will declare a national emergency and everyone living in a tent (with solar panels) will have medicare.

[Hazel Meade]

My bet is that a significant percantage of young invincibles will get the cheapest legal coverage they are permitted.

But that will not be enough to stop rates from rising.

If the D's are still in power, they will respond by upping the mandatory minimums. More people will drop coverage.

The fines *might* go up. Or else the D's will attempt a move to single payer.

I doubt that will be feasible, given that the D's OWN the current system and will be blamed for the skyrocketing rates.

[prolefeed]

As a former health insurance underwriter, I'm not inclined to drop health insurance coverage after seeing how a sudden catastrophic event -- heart attack, stroke, etc. -- can run up hundreds of thousands of dollars in costs before you could obtain coverage under these looser underwriting standards.

But, yes, loosening underwriting standards like this will cause a big increase in premiums, which will cause people to drop coverage.

Brian D. is right -- the likely result of this legislation will be fewer people covered by insurance, at least unless or until the mandate to buy coverage kicks in AND the fines get high enough.

[Hank]

By this point, the fine will have to be 10K. Best to have madatory sentences akin to crack. More jobs for prison union members. Win win.

[SkepticalTexan]

You get free health care in prison. It's a RIGHT!

[ChrisH]

But... you can get insurance just for accidents or sudden medical events like heart attack and stroke. I don't know how the numbers trade off, but a bigger market may open for that.

[SkepticalTexan]

I think HCR bans such policies.

See Section 2713, which begins "(a) IN GENERAL. - A group health plan and a health insurance isuer offering group or individual health insurance coverage shall, at a minimum provide and shall not impose any cost sharing requirements for ..." and then proceeds to list all the items associated with preventive care.

[ChrisH]

I'm not talking about health insurance. Aflac (for instance) has a policy that pays out for heart attack or stroke -- not to cover the health cost, but to cover other expenses.

OK, I'm paying for my ER visit with "my own cash" from my right pocket, and... hey, look! Aflac put all this other money in my left pocket.

Now, maybe these are outlawed, too, but I haven't heard that, yet. And, of course, you have to be ready to pay for your own medical expenses as you go. But I've always had the highest possible deductible insurance, and I get the impression you do, as well (with an HSA). So no big changes there.

Plus, I think this would be hard to crack down on, because you could still buy such insurance from the Cayman Islands or something -- deposited in your Cayman account, if the feds start to crack down.

Maybe I'm just dreaming, but this seems like it's going to be easy to exploit this law in ways not intended. It's not just a bad law, it's a bad law with an idiotic implementation.

[domoarrigato]

When (not if) we get the public option - there will be no underwriting. The government will take your name, social security number, and email you a health insurance card 5 minutes later. If you dont believe the bureaucrats who will run this wont make it that easy, you dont understand how the government works.

[That Chick from OH]

I think you mean 5 MONTHS later.

[aliasm]

In my experience, nothing the goverment ever does is "easy."

My trips to the DMV, SSA, Post office (not goverment, but still), courthouse, are never examples of "easy."

[prolefeed]

Shorter comment -- from the perspective of an insurance underwriter, this bill is chock full of stupid.

[SkepticalTexan]

Yes, it is destined to fail. But that's the whole idea: the Dems will then advance the idea that markets don't work and they just have to socialize health care, period.

FAILURE IS SUCCESS.

[Mike Laursen]

I guess that's the "bright" side of all of this. Liberals live in a fantasy world. They're going to get a lesson in reality, that some might pay attention to. Too bad the rest of us have to be involved.

[R C Dean]

Shorter comment -- from the perspective of an insurance underwriter a sentient being, this bill is chock full of stupid.

[sage]

Oops. Went crazy with the strikethrough pen?

[R C Dean]

Yeah, I Deaned the HTML. Bite me.

[Hazel Meade]

I currently have a cheap high-deductible plan that gives me discounts.

Under the whole "If you like your current plan, you can keep your current plan" concept, I intend to keep it as long as possible, since I doubt it would be legal on the exchanges.

[Dave Young]

Something that the article neglects to mention is that Health Insurance; particularly on the Individual Market, is really "Asset Insurance". People who choose to go without have, what I have heard refered to as "Chapter 7" insurance.

The decision to buy insurance, when you don't have it from your employer is almost always motivated by a realization that you now really do have enough to worry about losing. I doubt this legislation is going to change this.

[ChrisH]

My understanding is exactly 180 degrees the other way (but I'm REALLY open to being edumacated about where I'm wrong).

I think I'm in the demographic you describe. I own a house; I have assets. I'm in the (sucky!) individual market. All this time I have been careful to always keep on insurance, because heaven forbid a family member gets really sick and everything goes down the tubes. (OK, I'm actually concerned FIRST about family member's recovery, but we're on the economic side of things here.)

My thinking was "for gawd's sake have insurance now, because once anyone's sick it will be TOO LATE!"

Ha! That's chump thinkin'. Now the Congress tells me IT'S NEVER TOO LATE. I have that No-Pre-Existing option that I can cash in as needed. If I get that cancer diagnosis (for which I'll have to pay out of pocket), I'll be on my cell phone on my way out of the doctor's office, ordering me up some non-discriminatory insurance.

How are any of my assets at risk?

[aliasm]

He's saying that's the current state of things. Obviously after the "guaranteed issue" regulations go into effect this will change.

[SkepticalTexan]

I've reviewed many articles on the topic to determine how HCR affects me, a self-employed individual. It seems like HCR will pretty well eliminate the high-deductible HSA plan I now find least bad and force me to buy a low-deductible plan that provides preventive services without a deductible. Coupled with the ban on "pre-existing conditions", the premium will likely skyrocket beyond anything I can afford or cost-justify. I anticipate that I'll be dropping coverage on 1/1/11.

Thanks Obama. Thanks Pelosi. Thanks Stupak.

And, thanks to all Democrats who created a RIGHT to health care that actually means the OBLIGATION to purchase government-approved health insurance.

RIGHTS ARE OBLIGATIONS - the new slogan of AmSoc.

[aliasm]

Given the tiered implemetation of this bill, I don't think you'll be dropping insurance as soon as you expect.

[SkepticalTexan]

You're probably right, but who can estimate what a high-deductible HSA plan will cost next year?

[you know who]

so whats the solution to affordable HC and eliminating pre-existing conditions?

[ChrisH]

I know that years of my parents drumming this whole "responsibility" thing into my head has ruined my ability to adopt the new worldview, but why on earth should pre-exsting conditions be eliminated?

You can't (yet!) buy car insurance AFTER you have an accident. The way to avoid being without insurance with a pre-existing condition is to BUY... INSURANCE... BEFOREHAND... AND... KEEP... UP... YOUR... PAYMENTS.

Now, I'm totally sympathetic to people who have children with expensive defects. I'm sympathetic to cases where people have burned through their coverage because of extreme cases. But the Everybody Gets A Pony law never solves the problem.

If you didn't get insurance "pre-" getting the condition, why the hell did you expect health care to be affordable?

In the last two years I have learned that actually paying your mortgage is for chumps. Now, I'm learning that paying to be prepared for illness is also for chumps. Why do I keep falling into this "responsibility trap"?

[Ebeneezer Scrooge]

tee-hee. yer a doof,that's why.

better get with the new program boy, before you're broke.

just couldn't resist you know. it's clear you didn't get the big "we love the world and mother earth (more) (i mean too)" socialism message.

[Ebeneezer Scrooge]

and don't forget that genetically modified stem cells are fine and good. but genetically modified food crops are horrible horrible horrible.

and they're gonna make it so you can live longer 'cause you got health care. but they'll make you live like a middle ages peasant because DAMMIT you have to keep your carbon foot print DOWN boy.

don't forget that they love you, and mother earth (more) (i mean too).

[John Thacker]

The way to avoid being without insurance with a pre-existing condition is to BUY... INSURANCE... BEFOREHAND... AND... KEEP... UP... YOUR... PAYMENTS.

To be fair, the tax bias towards employer provided coverage does complicate this.

[John Thacker]

The way to avoid being without insurance with a pre-existing condition is to BUY... INSURANCE... BEFOREHAND... AND... KEEP... UP... YOUR... PAYMENTS.

To be fair, the tax bias towards employer provided coverage does complicate this.

[Hazel Meade]

Yes. My sympathies are entirely with people who have lost employer based coverage and can't get insured now. But ai beleive the correct thing to do is hold the original insurance company responsible.

[joeindenver]

HSA for everyone (who choose to buy insurance) dropping employer provided health care benefits (they don't offer group car insurance so why should there be group health insurance) and create a secondary re-insurance pool (nationwide) for pre-existing conditions that everyone buys into. This secondary pool would then provide coverage for those conditions deemed worthy of consideration and your insurer could pass though those claims to that pool when/if necessary. For the short term it may require a few more bucks to start it, but longer term, it should take care of itself. You'd use this pool if you changed insurers, perhaps because of a move or you simply wanted to switch carriers (think switching auto insurance - simple, no???). Because everyone buying insurance is in the re-insurance pool the pre-existing condition issue largely goes away long term and you and your provider are free to engage in business as you like it. As I said, with HSAs for everyone (who choose to buy insurance) costs for many things will fall as the whole back office of your typical doctor's practice is newly unemployed.

As an aside, I'd love to see the typical costs of running a typical general practice against, say, a plastic surgery practice. The former taking all kinds of insurance, the latter, running more or less as a cash and carry business (with the exceptional insurance patient due to accident or some other incident where a third-party makes the person "whole" again). Or, perhaps better, find those general practices where they don't take insurance at all and I'll bet, on the whole, the cash and carry provider does just a good of job for less out of pocket than the insurance based practice would, once all costs were considered. Clearly the "optional" health care providers are doing a good business and have provided advancements in technology and lowering out of pocket costs unlike nearly all of traditional medicine which has largely lost touch with any kind of market force.

[James Ard]

The Insurance companies and the government have ruined health care by conspiring to mandate coverage for everything. 4% margins on all health services as opposed to just catastrophic care has made them tons of money. But the third party payer problem explodes costs. Eliminate the mandates and get the insurance companies out of expected services.

[joeindenver]

Just got a little brief from my insurance broker and this little tidbit just made me laugh, and then cry...

"Plans cannot have eligibility rules based on hourly versus salaried workers, or otherwise favor higher-paid persons over other full-time employees. (Reverse discrimination is allowed, of course.)..."

Seems Congress exempted most of itself from such coverage limitations. Wonder how my providing the wimpy (and only plan available) to my out-of-state employee will change my policy under this rule.

[Kongbucks]

"Seems Congress exempted most of itself from such coverage limitations."

I see an obvious way for Republicans to fix things after November -- just make everyone who's constitutionally eligible a member of Congress!

[Ted S.]

Not that you were being serious, but the Constitution limits the size of the House of Representatives to one member for every 30,000 people.

[joeindenver]

More interesting contradictions:

Obama has specifically stated "you can keep your current plan" except you can't...

"Plan changes are required for most group health plans... Beginning in 2014... The federal government will establish the terms and conditions of a qualifying health plan, setting the rules on what benefits or conditions are covered, limited, or excluded, as well as deductibles, cost-sharing, and coverage amounts. Deductibles cannot be "unreasonable." An out-of-pocket maximum will be determined, set at a level to prevent bankruptcy. The plan must cover preventive care, mental health, and dental and vision for children, as well as maternity care, prescription drugs, laboratory charges, emergency room visits, and hospitalization."

But... "The law specifically states the right to keep existing coverage, but that provision's meaning is unclear, especially in light of the mandated benefit package." Which will, um, change the insurance you have. In my case, dramatically, as I don't carry dental or vision due to their vastly increased cost and minor benefit. So it looks like I'll be paying at least 30% more in premiums by June 2014 at a minimum based on my current schedule.

My bet is that within 2 years I will be paying something close to twice as much as I was last year when I switched to a 10K HSA policy. My premiums went from $1300.00/month (family) to $505.00/month. If the HSAs are eliminated (not really sure at this point if they will be allowed to exist beyond 2014) then there will be no way for me to afford the $2000.00/month fee it is going to be (adding vision, dental, mental health care, guaranteed issue, costs of children until age 26, plan reporting requirements, etc. won't bring the cost down any...). If this comes to pass, this will put my insurance cost at more than my mortgage. Really? I think I won't be the only one saying "no" to insurance as a monthly expense, especially if it can be had "on the spot" as it is implied. Meaning, if you apply the day you need it, you're covered.

I like my HSA plan - but from the looks of it, I won't be able to keep it as the "minimum" plan seems to ban HSAs outright. Although there is ambiguity. As my broker typed: "Additional analysis is needed to confirm Congressional intent."