Government - Federal
Political Suicide in Pelositown
Chicago flavored Kool-Aid passed around
2010-03-23 07:48:46
Cause and Effect
By my (reasonable, but rough) estimate, there's going to be at least an 80-seat flip in the House this November (GOP +40, Dem -40). Pelosi loses her Speaker's chair, outside chance Reid loses his too (if he even keeps his seat, which isn't looking good for him).
Hope it was worth it.
The plain fact of the matter is that a strong majority opposed this legislation, and it was passed using some of the dirtiest political maneuvers ever to play out before the public, which included multiple instances of outright bribery.
When businesses react by dropping employees from coverage in huge numbers, or dropping numbers of employees to fall below the minimum size to be affected by this legislation, and the insurers react with huge price increases every year to lock in favorable rates, every person who supported this legislation will come to regret it.
The numbers we are talking about come to $15k individual and $20k for a family - if you fall into the $90-120k/yr range (and many middle class families do) this is an economic kick to the nuts. There's no reason to keep coverage in that case unless someone covered is already sick. It makes much more sense to stick that in the bank as your own personal "gap" coverage for the time it takes when something happens to you and you sign up for "insurance".
But what's the plan for when people drop all coverage entirely (until they get sick) and pay for routine care out of pocket? There's nothing left on the positive side of that accounting ledger but the very rich and the penalty for not being insured, which isn't even close to enough to cover the costs for the system to function.
Basically what this law resolves down to is a tax to pay for catastrophic care. Unless you are rich or someone else is paying your way, you will have no coverage at all by the time all provisions fully come into effect.
Unintended Consequences
The only thing worth liking about this legislation is that it is a death sentence for the insurers, crooks and swindlers that they are.
If you are middle class, you will pay the tax, stick the rest in the bank, and pay direct for routine care. If you are stricken severely enough to require expensive care, you will sign up at that moment, and no sooner, because when a policy can be bought at any time that may not exclude pre-existing conditions, the insurance is effective for everyone, already. Congratulations, you are insured right now, by the guarantee that you can buy into a program that covers high expenses, as long as the industry exists.
Is that not what a healthy person buys, when he buys insurance? Why in the world would you buy it now, if it is already given to you for free? You have the catastrophic insurance you need and can negotiate in cash to your doctor for routine care, with no government or insurance company to come in and embezzle from the transaction.
What is reasonable to assume happens moving forward as the provisions take effect? Insurers will be forced raise rates by huge amounts. This in turn will feed a vicious cycle of unaffordability, forcing more healthy policyholders to drop out, in turn forcing higher rates, until the point where there is no way a person would pay for insurance if they were not already in need of very expensive care. At this point the government will be forced itself to turn the insurers into GSEs or government agencies, this business model is not viable in a marketplace.
This situation results in the sick paying their own way through the government/insurer, subsidized by assessments against those who are not "insured", with everyone else going directly to doctors of their own choosing, paying full price. This could cause doctors to leave the government/insurer system and go private, to provide routine care; and possibly for the government to be forced to import medical staff to fulfill its promises.
These certainly are interesting times.
