Major Shift on Health Care Reform?

Is a major shift in Health Care legislation direction afoot? 

Over the past couple of weeks, Health Care legislation has moved down the list of today’s top stories.  
Thanks, in part, the Health and Human Services “Gag Order” prohibiting insurance companies from telling their members that the $124 billion cut in financing will lead to a reduction of benefits,  for the lack of recent discourse.   It’s not allowed.   ( If you didn’t know about that you are encouraged to see the ABC news story link)

After ABC’s Stephanopoulos took on President Obama’s definition of the word “tax” on his Sunday Morning News Program, the Senate Democrats have modified one of the key components of the Baucus bill lowering the “tax/not a tax penalty for not having insurance from a maximum of $3900 to $1500-ish (depends of the report).    Aside from the estimated $30 billion in New Taxes, It appears that the reactive consequences of the bill are now being considered.

For purposes of Illustration, I will use Chicago area pricing, and assume 0% inflation.  

·         Currently a 28 year old male, non smoker,  can get a $500 deductible 80/20 health plan from Blue Cross with a $20 copay and Rx card for $ 223.31

·         A 28 year old female, same situation, without maternity would pay $292.00

·         If that Female wants maternity coverage, her cost would be $642.98

Under the new law, Males and female would be charged the same price and maternity would be mandated coverage.   Thus under the new bill, all 28 year olds, would pay $433.15.   This nets out to be a 94% increase for males, and 48% for females over current rates.   

While you might argue that the cost for maternity would come down with more people in the pool, the question remains “why would anyone buy insurance?”.   There won’t be a larger pool.  

Under the new law, an individual would have guarantee issue, no pre-ex clause, access to insurance.   An individual could choose to pay a “tax/no tax” penalty of $500-$750 per year and then,  IF they needed insurance, buy coverage at the hospital.    Reasonable people will not buy insurance.   There is no reason too.   Get it only if you need it, and then you have guaranteed access with no pre-ex clause.   Wow!  That’s Great, huh?  

Under the bill, the only people with insurance will be the poor and those over age 65 on Medicare.   Currently those that have the means, who are uninsured, are viewed as practicing bad behavior.   Under the new law, you would be practicing foolish behavior to have insurance.   It appears that Washington is beginning to recognize that consquence.

So who wins here?   Apple, of Course !   200 million new apps to auto-enroll you in insurance if you need it.   There’s an App for that!