June 10, 2009

The Coming Healthcare Monster

Justin Katz

It isn't difficult to predict the effects of this. On one side:

A first-ever tax on employer-provided health benefits also figures prominently among options under consideration in Congress, but Obama campaigned against that last year and its inclusion in the bill would require him to reverse course. ...

... Private companies would be barred from denying coverage or charging higher premiums because of pre-existing conditions.

Both bills would require individuals to purchase insurance if they could afford it, with waivers available in hardship cases. The Senate measure provides for an unspecified penalty for anyone refusing to obey the so-called mandate, and House Democrats are considering a similar approach. ...

... the House approach would require employers to purchase insurance for their workers or pay a penalty. ...

To cut down on the ranks of the uninsured, the Senate bill stipulates that children up to the age of 26 could remain on their parents' insurance policies.

And filling in the other:

Individuals would be able to purchase insurance from new exchanges operated by the states or federal government. ...

On a hotly contested issue, the emerging House plan would give individuals the option of buying insurance provided by the federal government.

The president's assertion that the healthcare plan will be "revenue neutral" is an Orwellian kind of insulting. The tax on employer health benefits and all these penalties (paid to whom?) for failure to provide or to procure mean that the plan is — by design — not "revenue neutral" for anybody but the regime in Washington. Apart from the direct confiscation of money, they will lead to decreases in pay (as employers compensate for the greater cost of benefits) and increases in the price of goods and services (as companies try to make up for costs of producing them).

Moreover, the inability of insurance companies to adjust prices to account for pre-existing conditions and the ability of young adults to remain on parents' plans to the age of twenty-six are only two predictable ways in which this legislation will drive up the cost of insurance. Since the aforementioned penalties will hardly keep up with inflation, an increasing number of companies will opt to pay them rather than to provide the benefit, and an increasing number of individuals will have no plausible option but government care. So, the government program will grow, and if it remains "revenue neutral" by desire or by fiscal reality, price controls will be ramped up and rationing will begin. If it does not remain "revenue neutral," it will drive Americans into the ground.

Those who've pined for government healthcare are going to get a good look at it within the next decade, and I doubt they'll like what they see... at least when they find themselves needing to rely on it.

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>>Both bills would require individuals to purchase insurance if they could afford it

>the House approach would require employers to purchase insurance for their workers or pay a penalty

If it walks like a tax, and quacks like a tax ....

Posted by: Tom W at June 10, 2009 8:55 AM
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