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Why I Will Drop Health Insurance If The Senate Bill Is Passed (& how this will destroy healthcare)

From Tim Andrews on Tuesday, December 22, 2009 5:01 PM
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If the current Senate healthcare bill passes, I – and millions of other Americans – will drop our health insurance the day it comes into law. And for this reason, it will ultimately destroy America’s health care industry.

Let it not be forgotten that the radical-ideological attack on free-market healthcare that underpins so-called healthcare “reform” by Obama-Pelosi-Reid was always a two step attack. First, destroy free market insurance. Second, set up a government-run program to fill the void.
 
Removal of the public option in the Senate bill delays step two, but the destruction of private health insurance means a government-run plan will almost become inevitable.
Why? Let me explain.
 
There are two key parts to the proposed legislation:
1)The individual mandate which means that if you choose not to receive insurance, you will have to pay an income surtax, (generally) maxing out at 2% of income (you can view a schedule of how much this will be here)
2)Non-denial of coverage for pre-existing conditions. This means that if you have no insurance, and contract an illness, you must be given coverage.
 
So. What would any rational person do?

The answer is simple. They would not insure themselves, and pay the tax for non-insurance. Why? Because this tax would be considerably less than most family or individual insurance plans. According to the AHIP Center for Policy Analysis, nationwide, annual premiums averaged $2,985 for single coverage and $6,328 for family plans in mid-2009. As such, paying the fine would be more worth it for individuals making less than $149,250 and families making less than $316,400 (which would cover about 99% of all households in the United States). This is not considering employee-provided healthcare, where premiums are considerably higher!
 
As such therefore, it would be in the interests of most rational Americans to not be insured, and as soon as they contract a serious illness, however, they would instantly sign up for insurance, and the law would force them to be covered. And have all their expenses paid for, even though they did not contribute anything to the insurance plan prior to contracting the illness. Then, as soon as their illness is cured, they would once again drop the insurance, having paid for only a fraction of the potentially hundreds of thousands of dollars treatment would cost.
 
The result? The individual free-rides off others and premiums skyrocket. As more and more people realize they can do this, the pool of paying insurance customers will dwindle, and costs will skyrocket even further. So fewer people will sign up for coverage, and ultimately, insurance companies will go bankrupt. The end result? Politicians will don shining armor and ride out to ‘save’ the people, with government run-healthcare, thereby “solving” a problem they created in the first place.
 
So do not be fooled by the rhetoric. This bill will destroy healthcare, and will lead to government run healthcare within a decade. There is no other explanation possible.

Permalink | Email | Print | Tags: HEALTHCARE, Federal

Comments

Bingo! The whole purpose of insurance is to insure against risk. If you take away all the risk by guaranteeing coverage for everybody, you take away the need for insurance. But logic will get you nowhere with these Democrats.
>> moneyjihad.wordpress.com Tuesday, December 22, 2009 9:02 PM Report Comment

I am all for destroying private health care because, private health care destroyed American medicine! America is the only country that believes it is acceptable to privatize public service such as health care. What's next? Privatizing schools, police, and fire departments too?
>> Sean Thompson Wednesday, December 23, 2009 4:15 PM Report Comment

Unless I'm completely mistaken, there is a flaw in your logic. True, the new plan would force coverage of pre-existing conditions, etc. But what about catastrophic coverage? Someone could deny insurance and pay the tax, but if they got into a serious car accident, for instance, and went to the emergency room (and were making $149,000 a year, so they actually could pay their bills), then they would be stuck with the tab. The pre-existing conditions part is to make sure insurance companies will cover someone who already has a serious illness, not to guarantee converage to assholes who think they don't need insurance until they do.
>> JLS Thursday, December 24, 2009 1:10 AM Report Comment

I never understood untill I heard it said to me, the belief that health care should be considered a public service such as the police and the fire department. nice to know that we wi no longer require more than a high school diploma, a few weeks at a training academy and a whole lot of bravery to become a physcian. come on wake up if insurance is opened across state borders nationwide and limits put on lawsuits (tort reform) all will be much more affordable and we can go on from there, However the lawyers and insurance companys will never allow that! Further if his is "a good thing" why are ALL federal employees exempt???
>> troy b carlson Thursday, December 24, 2009 11:30 PM Report Comment

@JLS, In the case of a car accident, the lack of insurance coverage is not a hinderance. Currently, anyone brought into an emergency room will receive care regardless of ability to pay. The Emergency Medical Treatment and Active Labor Act of 1986 provides for this.
>> Mike C. Sunday, December 27, 2009 7:24 PM Report Comment

@Sean Thompson, private health care did not destroy American medicine. You might have a case for the current health insurance provisions and the regulations that govern it, but American medicine has always been a service, governed by ability to pay. Sorry if you don't like that, too bad. As other countries have found, health care is extremely expensive if you intend to provide it to everyone without limits on costs or procedures. Because of this, most countries limit care, either through extensive waiting periods for expensive treatments (hoping you die first), limitations on expensive therapies (see UK's NICE) and limited medical innovations, technological or otherwise.
>> Mike C. Sunday, December 27, 2009 7:28 PM Report Comment

@Mike C., Yes I am aware of that. My point is that, this theoretical person who makes $149,000 a year and dropped his insurance because it is cheaper for him to pay the 2% tax as opposed to the premiums, has the ability to pay. And, if he dropped his insurance and got into a catastrophic accident, he would be stuck with a huge bill instead of simply paying his premiums in the first place. Therefore, it does not make sense to drop your insurance for the reasons laid out here. And, the cost of treating the uninsured is not free, and we all help pay for it. So why not get everyone covered so the rest of us aren't paying for someone's lack of insurance?
>> JLS Sunday, December 27, 2009 7:35 PM Report Comment

@JLS, so what do you propose that ensures everyone is insured? And how will it be enforced?
>> Mike C. Monday, December 28, 2009 9:25 AM Report Comment

@Mike C., I'm not going to pretend I have the answers to these problems, and perhaps I should not have made that last statement, as it is beyond the scope of my original point.
>> JLS Monday, December 28, 2009 9:43 AM Report Comment

Paying off my student loan, one credit card, utilities, paying for a condo, car payment, house and car insurance, phone, internet, makes it almost impossible to pay for a $389.90 a month health insurance. I am making about 42,000 grand a year decent job aa typical american call center. I am relativly health young 25 year old and I gotta pay 300+ The most I ever go to a doc is for a bad cold, broken arm, minor stuff. Yet the so called FREE-F'in-MARKET insurance company has the cojones to charge me that much! Sure the government will do a great job of messing our health care up, but at this point I see the Govn't as the lesser of two evils.
>> Chris G Tuesday, January 5, 2010 4:15 PM Report Comment

Chris G. Where do you live? If you live in a state like New York with community rating, you get hosed by the state insurance commission, not the insurance company. You may wish to further your knowledge about how the states regulate insurance within their borders and prevent YOU from shopping out of state for individual coverage. You can also use www.ehealthinsurance.com to get price quotes for your area. I did it for a 25 year old where I live in Virginia (lowest $66 a month), versus New York (lowest $176 a month, then jumped radically higher).
>> Mike C. Tuesday, January 5, 2010 5:00 PM Report Comment

As an addendum, community rating is extremely onerous. It basically means everyone pays the same amount for the same coverage, regardless of age, health problems or current state of health. So, young people like you get hammered. The individual states vary widely on minimum coverages to be provided by insurers selling in their state, thus the wildly differing premium costs between states and the reason you cannot shop across state lines for individual policies.
>> Mike C. Tuesday, January 5, 2010 5:04 PM Report Comment

now you have made my point, the inability to shop nationwide for insurance. this coupled with no tort reform (suit limits etc...)are the primary cause of the problem. fix this then take another look!
>> tbc Wednesday, January 6, 2010 1:39 PM Report Comment

re Chris G., you and many like you, (I guess the recently educated and wanting the best of everything as your reward) need to remember that if the priority is the insurance first you may not get the condo,car, cell phone etc... you want. you may have to lower your standards, and also the standards of health care you want too! competition breeds success,
>> tbc Wednesday, January 6, 2010 1:48 PM Report Comment

If this bill passes can i cancel my wife family insurance thru her company or what should I do?
>> Brian Wednesday, January 6, 2010 5:10 PM Report Comment

Thank God Brown won...If I wanted to live in France, I would move there. I've been reading many comments on other articles on this issue. It's funny the number of young people that weigh in on this without educating themselves first. Obama has many young Americans following him because they think it's cool and they are being different. I even read a nineteen year old girl quoting Michael Moore. Educate yourselves and understand how this bill will affect your pocket book before taking sides. Make your own judgement without the influence of others who are as uneducated as you.
>> Josh Wednesday, January 20, 2010 10:03 AM Report Comment

There seems to be a lot of misconceptions about the "buying insurance across state lines" talking point. The reason insurance premiums vary so widely from state to state is that each state regulates insurers differently. All buying across state lines would do is undercut State Law at the federal level (10th Amendment?), while ultimately providing us with NO options as every insurer would simply incorporate in the state with the loosest regulations. That scenario is by far much more of a nightmare than free riders manipulating the system because their isn't a strong enough mandate.
>> Paul D Tuesday, February 2, 2010 10:15 AM Report Comment

@PaulD, what do you base your assumption that no options would be the result. Please be specific about a similar product that can be bought without regard to what state one resides in and has resulted in no options for the consumer. I live in a state with looser regulations than say New York and have plenty of options from high deductible / low premium to no deductible / high premiums (for the same coverage). You're correct about the 10th Amendment, however, Congress has already decided the Interstate Commerce Clause allows them to mandate everyone in every state must purchase health insurance in both versions of "reform".
>> Mike C. Tuesday, February 2, 2010 6:14 PM Report Comment

Great idea. That way when you or a family member needs emergency life saving medical treatment you can tell the EMT to wait while you call and get some insurance. I'm sure that the surgery will also wait and the hospital won't bill you until after your covered. My son had surgery 10 days after he was born, and the bill came to $90,000 -- all but $6000 covered by group health insurance.
>> ammdb Friday, April 9, 2010 3:04 PM Report Comment

Stop i hopping from leave to leave of issues like insurance,pro life or not,pro race or religion or against,pro war or pro what ever BS. Concentrate on what is rotten and insane here. Fixing financial system and power leading core in USA will almost spontaneously fix an trickle up in all areas
>> david Friday, August 6, 2010 3:20 PM Report Comment

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